House and Senate Panels Approve First Installment of Panama Aid

Congressional committees, moving with lightning speed, gave initial approval Tuesday to the first installment of the Bush Administration’s $1-billion aid package for Panama, with plans to send the measure to the President for his signature as early as next week.

In separate actions, the House Foreign Affairs and Senate Foreign Relations committees approved identical proposals providing $500 million to help rebuild public works and $42 million in emergency “humanitarian” aid.

The Administration said it would submit legislation later this month for another $500 million worth of medium-term loan guarantees and trade benefits for Panama.

The prompt action Tuesday confirmed that Congress is ready and willing to speed enactment of the aid package without excessive partisan wrangling over content or which party ought to receive the credit. The full House is to take up the aid measure today. The Senate will act later this week.

In testimony before the House panel Tuesday, Bernard Aronson, assistant secretary of state for inter-American affairs, said: “Risking doing too little, too late far outweighs the risk of acting too generously and too hurriedly.”

The proposed $42 million in humanitarian aid would help people whose homes or businesses were damaged during the pre-Christmas invasion by U.S. forces and the looting that followed.

The $500 million will finance major public works projects designed to create jobs and rebuild roads and will inject new cash into Panama’s once-flourishing banking system, which was strangled by economic sanctions imposed by the United States in March, 1988.

About $125 million will be used to help bring Panama up to date in its payments to the World Bank and the Inter-American Development Bank, a prerequisite to the country’s obtaining further loans from those institutions.

The $500 million worth of medium-term help that the Administration will request later ranges from restoration of duty-free status for Panamanian exports to revival of Panama’s allocation under the U.S. sugar-import program.

One possible snag in speeding the aid package through Congress is the growing dispute over Panama’s refusal to revamp its banking laws to prevent the laundering of drug money.

U.S. officials have said that much of the reason that Panama flourished as an international banking center before 1988 was that a large part of its banking business came from drug barons. The country historically has had protective banking secrecy laws.