Key Senator Urges Bold New Aid Plan to Help Yeltsin : Russia: Leahy suggests cutting assistance for Israel and Egypt to cover part of the cost.

An influential senator, reflecting growing congressional alarm over faltering democratic reforms in the former Soviet Union, called Thursday for a bold new aid program to help Russian President Boris N. Yeltsin and suggested cutting aid to Israel and Egypt to help pay for it.

Warning that “time is running out” for Yeltsin, Sen. Patrick J. Leahy (D-Vt.) called on the Clinton Administration to provide $1 billion in assistance to the former Soviet states next year--significantly more than the White House is considering.

But Leahy, chairman of the Senate subcommittee that appropriates foreign aid, also said in a Senate speech that the Russian aid program must be restructured. The goal, he said, should be to replace commercial loans that the Russians cannot repay with a new package of grants and other aid to meet both short- and long-term needs.

Because this year’s $14-billion foreign aid budget is almost certain to be cut, Leahy suggested “ruthlessly slashing U.S. security assistance to other parts of the world and other parts of the foreign aid program” to pay for the package.

In his speech, he stopped short of specifically mentioning Israel and Egypt, which together receive more than a third of all American foreign aid, but he said in a separate interview that such a move must be considered.

“You have to ask yourself, ‘Where do America’s real security interests lie today?’ ” Leahy said, adding that even the Middle East has been eclipsed by the need to keep anarchy and totalitarianism from returning to the part of the world still armed with more than 20,000 nuclear missiles.

The Administration already is considering asking Congress for $700 million in aid for the former Soviet republics next year--a 70% increase over the $417 million that Congress appropriated for the current fiscal year.

But as concern for Yeltsin deepens, support is growing on Capitol Hill to do even more--provided it can be accomplished within the limits of a shrinking foreign aid budget that is certain to come under pressure for more cuts this year.

Echoing warnings by other influential lawmakers, including Sens. Sam Nunn (D-Ga.) and Richard G. Lugar (R-Ind.), Leahy said that, if the former Soviet Union reverts to totalitarianism, the price for the American taxpayer will be far higher than the cost of assisting its transition to democracy.

If Yeltsin is deposed, he said, not only will American taxpayers “end up holding a $4-billion bag of debt”--the amount of loans to Russia that the United States already has guaranteed through the Agriculture Department’s Commodity Credit Corp.--but also the cost of reverting to a Cold War military posture will add at least $100 billion a year to the defense budget.

But, Leahy added, extending loan guarantees to Russia, which already has defaulted on $435 million in Agriculture Department loans, is not the answer.

As an alternative, he proposed a new, two-stage approach to combine short-term food aid and other assistance with longer-term commercial, technical and humanitarian grants “tightly linked to economic reforms” and coordinated with assistance provided by other Western donors and multinational organizations.

“We must urgently develop bold and imaginative strategies,” in concert with Japan and Western Europe, to help the former Soviet states or accept “the far greater costs of failing to build a lasting democracy in Russia,” Leahy said.

Other lawmakers agreed that more should be done to help the former Soviet states but acknowledged that it will be hard to do that without touching the largest and, until now, most sacrosanct component of the American foreign aid program--the $3 billion a year in economic and military assistance to Israel and the $2.1 billion to Egypt.

Any attempt to cut aid to those two countries is sure to draw stiff resistance from Israel’s supporters in Congress and could prove equally difficult, lawmakers also conceded.

But it is also clear from their private comments that the pendulum in aid debate is swinging slowly in that direction. “When it really comes down to it,” said Lugar, the current levels of “support for Israel and Egypt are going to be the major factors in the debate over reforming foreign aid.”

Where the Aid Goes

Here is a look at U.S. foreign aid in fiscal year 1993, which ends in October. U.S. foreign aid: $14.17 billion Total U.S. spending, foreign and domestic: $1.5 trillion Foreign aid as percentage of total budget: 0.66%

MAJOR RECIPIENTS Israel: $3 billion Eygpt: $2.1 billion Turkey: $129 million Former Soviet republics: $417 million Eastern Europe: $400 million El Salvador: $110 million