Texas Jewish Post (Fort Worth, Tex.), Vol. 41, No. 45, Ed. 1 Thursday, November 5, 1987 Page: 2 of 20
twenty pages : ill. ; page 16 x 12 in. Scanned from physical pages.View a full description of this newspaper.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
TEXAS JEWISH POST THURSDAY, NOVEMBER 5, 7987
The Cutting Edge —~
BY EDWIN BLACK
Background
Surrounding
Senator Chiles
Influence On
Israel's U.S.
Debt
WASHINGTON - Washington cir-
cles are buzzing over whether Sen-
ator Lawton Chiles (D-FL), powerful
chairman of the Budget Committee, is
really supporting the Israeli debt
reform initiative, or preparing to
"subtly procedure it to death." The
measure would refinance as much as
half of Israel's $11 billion high in-
terest debt to the US Treasury by
transferring it to the private securities
market. The debt was incurred pur-
chasing military equipment when
rates ranged from eleven to fourteen
percent. Jerusalem could save from
$100 to $200 million per year by
paying the lower private sector in-
terest currently available, much in
the same way an individual could
save money re-financing a home. But
to succeed, investors would need a
US government guarantee against
default covering ninety to one hun-
dred percent of the debt securities.
Therein lies the conflict.
A variety of Administration and
Capitol Hill sources claim that Chiles
and his staffers are advocating figures
as low as seventy percent "to quietly
kill the initiative even as they claim
they're in favor." And a respected
military insider's report, Defense
News, citing a Budget Committee
source, asserts "Chiles will insist that
the US guarantee be dropped to 'sub-
stantially lower than 90 percent'
before he signs on to the plan."
Moreover, Douglas Olin, Chiles'
chief Budget Committee analyst on
international affairs, confirms, "We
are looking at numbers across the
board." In mid-October, Olin and
Chiles met in the senator's office to
discuss eighty percent, comparing
Export-Import Bank guarantees which
are also eighty percent. Olin is even
J working with a seventy percent ap-
proach, "but only as an illustration."
Chiles himself isn't saying what his
final decision will be — except to rule
out the hundred percent figure ad-
vocated by Israel's friends in Wash-
ington. A spokesman for the Amer-
ican-lsrael Political Affairs Commit-
tee states, "Sen. Chiles has been sup-
portive on foreign aid for Israel. . .and
we are working together to solve the
debt problem." Sen. Chiles, however,
suggests in an interview, "I think
Israel, because of her creditwor-
thiness, could obtain very good inter-
est rates even if they had guarantees
of no more than forty or fifty per-
cent."
Yet a New York banking source in-
sists, "This program can be done
safely at ninety percent. Eighty and
seventy? Absolutely not — with the
hell that's happening on Wall Street. I
think the Budget Committee knows
that."
"We have been trying
to solve the Foreign
Military Sales problem for two
years . . . Chiles has been a
major roadblock in the past.
Hopefully, he will modify his
position and support
gram. Indeed, Sen. Daniel Inouye (D-
Hawaii), an originator of the idea,
declares in a telephone interview,
"Figures discussed (with Chiles) were
ninety to ninety-five percent," adding
that the final figure will be "ninety
percent, I can almost guarantee it."
"I think Israel, because
of her creditworthiness,
could obtain very good
interest rates even
if they had guarantees of
no more than forty or
fifty percent."
"Someone (in the private
sector) is always willing
to lend money to someone who
can't repay the debt.". I if they
can come to the US
when the debtor defaults
and collect 7 00 percent.
This program, to avoid
such abuse, needs
shared risk — real
world market forces as
a braking mechanism."
— Douglas Olin
the proposal for no
less than ninety percent
in guarantees.'
The tough talking Senator from
south Florida has been riding a recent
wave of election campaign publicity
declaring himself in favor of the idea.
Although he has refused to commit to
the all important percentage of
guarantee, or reveal any details,
sources close to Chiles insist that, in
the end, he will not undercut the pro-
The conflict arises amid charges
that the current Chiles' position is
only the latest in the senator's con-
tinuing obstruction of Israeli debt
reform. "We have been trying to solve
the Foreign Military Sales problem for
two years," explains one Senator on
the Budget Committee who insisted
his name not be used, adding. "Chiles
has been a major roadblock in the
past. Hopefully, he will modify his
position and support the proposal for
no less than ninety percent in guaran-
tees."
But Sen. Inouye strongly undercut
any criticism of Chiles. "Lawton
Chiles is not a roadblock — major or
minor," assures Sen. Inouye. "Con-
sidering that he has the responsibility
for the whole budget, he has been
candidly in support of measures that
would alleviate Israel's debt
problem." Sen. Inouye, often con-
sidered one of Israel's most important
friends in Congress, adds, "At no time
did I ever hear Sen. Chiles suggest or
have anyone on his staff discuss with
me going below ninety percent
(guarantee)."
Chiles himself confirms in an inter-
view that he is worried about setting a
precedent for other nations. "We can
make a strong guarantee for Israel,"
he argues, "but we can't get into a
box and do it for less creditworthy na-
tions."
Chiles' analyst Olin explains why
providing Israel with only a ninety
percent loan would help float the
debt re-financing for the Jewish State,
but avoid "abuse" in re-financing
other nations' debt, such as Turkey or
Egypt. "Someone (in the private sec-
tor) is always willing to lend money to
someone who can't repay the debt,"
says Olin, "if they can come to the US
when the debtoudefaults and collect
100 percent. Thrs program, to avoid
such abuse, needs shared risk — real
world market forces as a braking
mechanism."
But as of this writing, Chiles still
declines to provide details about
structuring the privatization of
Israel's debt. One Chiles staff mem-
ber declined eight consecutive re-
quests to discuss the issue. Yet Olin
insists, "It is not fair to say that Sen.
Chiles wants to lower the (guarantee)
rate to prevent the program from
happening. Lawton Chiles does not
double deal. He is a friend of Israel."
Chiles himself sums up his position
this way: "I offered to help. If I get
my socks knocked off for that, so be
it."
• • •
F.dwin Black's weekly syndicated column is
published by Jewish newspapers in 50 cities
throughout the United States and Canada.
Quality Services Draw Families -
Create Jewish Community Action
"American Jews have
changed their basic
mode of interaction
with Jewish organi-
zations," says Dr.
Cary A. Tobin, Director
of the Cohen Center for
Modern Jewish Studies
at Brandeis University.
"Rather than behaving
like participants who
join, support and main-
tain membership in
Jewish institutions out
of loyalty to the Jewish
community, American
Jews today act like con-
sumers, shopping for
specific services which
can be provided by
Jewish communal in-
stitutions."
Dr. Tobin, an expert
in demographic studies
of American Jewish
communities, asserts
that the potential
market for Jewish ser-
vices is quite large.
"Most American Jews
prefer services offered
under Jewish auspices,"
says Dr. Tobin. "Studies
in Baltimore, MD, Wor-
cester, MA, and
Rochester, NY, SHOW
THAT THE GREAT
MAJORITY OF Jews
strongly prefer Jewish
sponsored day and
1 • q 1 ■
preschool, dating ser-
vices and singles pro-
gramming, and housing
for the elderly." Despite
this preference, Jewish
individuals will not
utilize services simply
because they have Jew-
ish sponsorship. As
discriminating service
.. h ) t /1
consumers. Dr. Tobin
cautions, today's Jews
demand high quality
services, an attrac^e
physical plant, con-
venient location, and
competitive costs. Con-
temporary Jews are not
likely to maintain
membership in the
sponsoring institution if
the programming of-
fered no longer meets
their needs, if the
quality of the services
or the physical plant is
not up to par, if the fees
seems too expensive or
too far away.
"It is important to
mnmOTMWw
reach clients of all types
— not just the
economically depressed
and not just the af-
fluent," says Dr. Tobin.
"If Jewish institutions
do not provide high
quality programs, they
will find themselves
serving only those
groups that cannot af-
ford to purchase ser-
vices elsewhere. The net
result will be severe
financial strain, both
because of the need for
heavy subsidies and
because of the loss of
full-paying clients and
See Quality Page 17
(M
il>i -ji iim: -jm.i
WWW
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Newspaper.
Wisch, J. A. & Wisch, Rene. Texas Jewish Post (Fort Worth, Tex.), Vol. 41, No. 45, Ed. 1 Thursday, November 5, 1987, newspaper, November 5, 1987; Fort Worth, Texas. (https://texashistory.unt.edu/ark:/67531/metapth753843/m1/2/: accessed July 4, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; .