Foreign Aid Cuts Possible, Baker Says : White House: Reductions to Israel and Egypt linked to lowering aid across the board.

The Bush Administration would go along with cuts to the two largest recipients of U.S. foreign aid--Israel and Egypt--if it were part of a broader, across-the-board reduction in aid to other friendly countries, Secretary of State James A. Baker III told Congress today.

“We’re willing to stand up and be counted” on such a cut in aid if Congress allowed the Administration more flexibility to use the limited money where it is most needed, Baker said.

Responding to a question by Rep. David R. Obey (D-Wis.), chairman of the House Appropriations subcommittee on foreign operations, Baker said Administration support would “depend on whether we do it in a non-discriminatory manner.”

In recent travels in the Middle East, Baker said, he has not found any significant reduction in the threat to peace. But he added: “At the same time, we must find a way to respond to changes in Eastern Europe, in Panama and in Nicaragua.”

Baker said he did not want to see a repetition of the current year’s budget crunch, in which some friendly countries that expected U.S. aid got little or nothing because 90% of the aid budget was already earmarked by Congress for certain other recipients.

“We ought not to be hidebound by what’s been done over the past 10 years,” Baker said.

His comments marked the first time the Administration has specifically said it could accept cuts to Israel and Egypt, which get the largest slice of U.S. aid as a result of their participation in the Camp David, Md., Middle East peace accord a decade ago.

Israel is receiving a total of $3 billion this year and Egypt $2.1 billion, out of a roughly $10-billion overall budget for bilateral aid. The Administration has asked Congress for the same amounts for both countries next year.

Earlier this year, Senate Minority Leader Bob Dole (R-Kan.) proposed cutting 5% from the top five aid recipients to create more money in the budget for emerging democracies and other needs.

The Administration denied planting the idea with Dole at the time, but expressed agreement with its goal of increased flexibility in distributing aid money.

Baker also said the United States has done all it can to advance the Middle East peace process and now needs a positive response from Israel.

“We’re coming very close to the time when we will know one way or the other whether we’re going to have a chance of succeeding,” he told the subcommittee.

“We’ve really done pretty much all we can do, we think, from our end and we are awaiting a response from the Israeli government,” he said.