U.S. Lawmakers See Big Challenge in Rebuilding : Foreign aid: Part of the assistance budget may need to be reallocated to give Panama higher priority.

Members of Congress on Thursday hailed the apprehension of Manuel A. Noriega as a key victory in the war against drugs, but they cautioned that the United States now faces an even tougher challenge in rebuilding Panama’s shattered government and crippled economy.

Senate Minority Leader Bob Dole (R-Kan.) said that part of next year’s foreign aid budget--already stretched thin by commitments to Egypt, Israel and Eastern Europe--may need to be reallocated to give Panama a higher priority.

Asked if he was suggesting a reduction in assistance to Israel and Egypt, the two largest single recipients of U.S. aid, Dole replied, “I am suggesting that we only have so much.”

Senate Armed Services Committee Chairman Sam Nunn (D-Ga.), who returned Wednesday from a 36-hour visit to Panama, said the country will require “hundreds of millions of dollars” in assistance over the long run--a commitment that he suggested the United States could not meet alone.

“No one should think that the key to (Panama’s) economic recovery will be U.S. aid, although that will be part of it,” Nunn said.

Asked if he had discussed Panama’s aid expectations with the new government of President Guillermo Endara, Nunn replied:

“We did not get any dollar amount from the Endara government, but they made it plain they are expecting American aid. They made it plain they have big economic problems. But they also made it plain they are going to ask other nations, not just us.”

At the request of House Speaker Thomas S. Foley (D-Wash.), a bipartisan delegation of key House committee members led by Majority Leader Richard A. Gephardt (D-Mo.) left for Panama on Thursday to discuss future economic and political needs with U.S. and Panamanian officials.

“These meetings will help us answer key questions . . . including the length of the U.S. military occupation, the means available to us to support the democratization of Panama (and) the requirements for U.S. private and public sector assistance to rebuild the Panamanian economy,” Gephardt told reporters before the delegation’s departure from Andrews Air Force Base outside Washington.

Dole, noting that Bush’s military intervention to oust Noriega enjoyed “broad bipartisan support,” said that the White House “had not put a dollar figure on aid to Panama yet.”

But he added that both the Bush Administration and Congress, which recovenes Jan. 23, will need to “take a look at reallocating some of our priorities in foreign assistance . . . to address economic problems in Panama as well as in Poland.”

The minority leader suggested that one way around the politically thorny question of what to cut would be to give the Administration “more flexibility” in allocating foreign aid by earmarking less of it in Congress.

Some lawmakers indicated that the responsibility the United States assumed for Panama when it invaded last month may now be greater and more complex than many at first had assumed.

Noting that Noriega and his military aides controlled virtually every important aspect of Panamanian life, Nunn said, “It is hard for people in this country to understand the pervasiveness of Noriega and the Panama Defense Forces.”

Panama, Nunn said, is entering “a nation-building phase” in which Washington will need to help Endara create a democratic government, reform a mismanaged economy and clean up the widespread corruption of the Noriega regime.

Despite these reservations, senators and congress members were unanimous in offering bipartisan praise for the Administration’s handling of the Panama crisis.

“I commend President Bush and all U.S. officials who played a role in making certain that Noriega was brought to the U.S.,” said Senate Majority Leader George J. Mitchell (D-Me.).

Sen. Edward M. Kennedy (D-Mass.) called Noriega’s apprehension a “triumph for justice,” while Rep. Jim Courter (R-N.J.) said that it sends a message “to the narco-terrorists and drug kingpins of the Third World . . . (that) the United States will not allow criminals who poison our children sanctuary anywhere in the world.”

Mitchell and other Democrats added that it now is important to lower U.S. military visibility in Panama and remove the rest of its combat troops as quickly as possible.

Nunn said that disengagement is crucial to the Endara government’s efforts to establish its own credibility and legitimacy. He called for a two-phase replacement of U.S. combat forces over the next few weeks--first by military personnel trained in civilian management and later by State Department and civilian experts.

The risk of maintaining a high U.S. profile in Panama, Nunn said, is that as time goes on, Panamanians who now blame their economic problems on Noriega “are going to start blaming them on the United States” if there is no visible progress in solving them.