U.S. aid to Israel, as envisioned in discussions at the White House and State Department during Israeli Prime Minister Shimon Peres' current visit, would build on a program that is already the largest U.S. effort for any country and is larger than many U.S. domestic aid programs.
Aid to Israel in the current 1985 fiscal year will total $2.6 billion ($1.4 billion in military aid plus $1.2 in billion economic aid), according to legislation in its final stage of passage on Capitol Hill.
The total is about the same as in the previous year, but with the important difference that for the first time, the package is made up of grants from the U.S. Treasury instead of including large loans that must be repaid with interest at near-commercial rates.
Egypt, with an aid program this year of just under $2 billion, also all in grants for the first time, is second to Israel as a recipient of U.S. assistance.
U.S. assistance to Egypt, whose population is more than 10 times Israel's 4 million, has been kept close to that to Israel since Egypt participated in the 1978 Camp David peace accords.
All other countries are far behind as recipients of U.S. aid. No. 3 is Turkey, which is expected to receive $875 million this year, nearly two-thirds in loans. The most controversial program has been military aid to El Salvador, which is expected to be $126 million when approved by Congress, about one-twentieth of the sum being voted for Israel.
Congressional sources said they expected an aid request from Israel of $700 million to $1 billion per year in additional funds, perhaps on a multiyear basis, to shore up the Jewish state's troubled economy. This very large increase would have substantial U.S. budgetary impact, especially because of the expectation that this, like the current assistance program, would be requested as a grant rather than loans.
President Reagan, who pledged yesterday "to cooperate the best way we can" in helping the Israeli economy, told the Jewish service organization B'nai B'rith last month that he had "markedly increased" U.S. economic assistance to Israel in the past four years.
Aid for Israel in fiscal years 1981 to 1984, Reagan said, totaled nearly 9.5 billion, "more than has been provided by any previous administration over a comparable period of time."
He also took credit for "restructuring" the assistance by making it entirely in grants.
The $2.6 billion slated for Israel this year is less than one-third of 1 percent of the entire U.S. budget of $930 billion. However, it surpasses many U.S. domestic programs' outlays.
According to the Office of Management and Budget, the $2.6 billion is six times the sum Reagan proposed to spend on U.S. energy conservation this year, more than twice the slated amount for domestic consumer and occupational health and safety programs, and about the same as the combined worldwide spending of the State Department and the Peace Corps plus all U.S. contributions to the United Nations and its agencies.