Sen. Byrd Backs Aid Cuts to Big Recipients : Foreign policy: Democrat praises Dole for launching debate on levels of assistance.

Senate Appropriations Committee Chairman Robert C. Byrd (D-W. Va.) lent Democratic support Wednesday to a proposal by Senate Republican leader Bob Dole (R-Kan.) to reduce the amount of U.S. foreign aid allocated to major recipients such as Israel and Egypt.

Byrd took issue with some aspects of Dole’s much-criticized proposal, which would cut all earmarked aid by 5% and reallocate the money to help meet the needs of budding democracies in Eastern Europe and the post-invasion government of Panama.

But warning that a budget-conscious Congress is not going to bake a bigger “foreign aid pie” next year, Byrd praised Dole’s courage for launching a controversial but long overdue debate over the appropriate level of financial assistance to other nations.

The former Senate Democratic leader, who as appropriations chairman will help determine how foreign aid is sliced in 1991, offered an alternative proposal certain to generate even more controversy--cuts of 10% to 20% for the “largest” recipients of earmarked aid.

“Rather than an across-the-board reduction, it may be wiser to look at each country on its merits. Some countries, certainly the largest of our historic aid recipients, can probably take cuts substantially larger than 5%,” Byrd said, adding that “somewhere between 10% and 20%” would be more realistic.

Byrd did not single out Israel or other major aid recipients, and he suggested that some countries for which Congress currently earmarks aid could be exempted.

But, girding for the criticism that is sure to follow, aides indicated privately that the senator was referring to the “big five” recipients--Israel, Egypt, Pakistan, Turkey and the Philippines--that account for more than half of the $15-billion total U.S. aid budget.

“You can look at the list” of the largest aid recipients “and draw your own conclusions,” one Byrd staffer said.

Israel, which will receive about $3 billion in military and economic assistance this year, and Egypt, which will receive about $2 billion, lead the list of U.S. aid recipients.

Arguing that overall foreign aid is “not going to grow as a result of the so-called peace dividend” and should not expand “out of proportion to our domestic programs,” Byrd said increasing aid to Eastern Europe and Panama depends on a rearrangement of existing resources.

Byrd’s proposal was quickly criticized by other Democrats, who disputed his contention that the peace dividend--money that could be siphoned from the defense budget now that the Warsaw Pact military threat seems to be receding--could not be used to expand foreign aid.

“Some additional resources could well come from the kind of resources we have been devoting to the defense of Western Europe,” said House Speaker Thomas S. Foley (D-Wash.).

Cutting aid to Israel could send “the wrong kind of signal” to Iran and radical Arab states in the Middle East, said Rep. Henry A. Waxman (D-Los Angeles).

“If the Syrians, Iranians and Libyans read that signal to mean the United States did not stand by Israel’s survival, we would be forced to look at a new set of realities that would be far more costly, not only to our national treasury but to our national interests,” Waxman said.

Legislators in both the House and the Senate said the chances of either the Dole or the Byrd proposals winning widespread support are virtually nil, especially in a congressional election year.

Privately, many lawmakers acknowledge that they share the Administration’s frustration that much of the foreign aid budget is bound by commitments to a handful of countries and cannot be used as effectively as it should to shape events and aid U.S. interests in a changing world.