[Congressional Record Volume 144, Number 15 (Wednesday, February 25, 1998)]
[Senate]
[Page S1002]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


   REPORT ON THE LOAN GUARANTEES TO ISRAEL PROGRAM--MESSAGE FROM THE 
                            PRESIDENT--PM 99

  The PRESIDING OFFICER laid before the Senate the following message 
from the President of the United States, together with an accompanying 
report; which was referred to the Committee on Foreign Relations.

To the Congress of the United States:
  The attached report to the Congress on the Loan Guarantees to Israel 
Program was completed on December 31, 1997. Since then there have been 
several key, positive economic developments in Israel that I wanted to 
communicate to the Congress.
  The Israeli Knesset passed its 1998 budget on January 5. The final 
budget adhered to the deficit target of 2.4 percent of gross domestic 
product (GDP) set by the Israeli Cabinet in August 1997, and 
established a spending target of 46.3 percent of GDP (down from 47.3 
percent in 1997), without resorting to additional taxes. Furthermore, 
due partially to the mid-year spending cuts discussed in the report, 
the Government of Israel overperformed the 1997 deficit target of 2.8 
percent of GDP by a significant margin; the 1997 budget deficit came in 
at 2.4 percent of GDP. These events demonstrate the commitment of the 
Israeli government to fiscal consolidation and reform.
  Second, the Israeli consumer price index (CPI) for 1997 rose by only 
7 percent, at the bottom of the 7-10 percent 1997 target range and a 
28-year low. This indicates that the battle being waged by the Bank of 
Israel and the Israeli government against persistent inflation is 
succeeding. The Israeli Ministry of Finance is reportedly considering 
lowering the 1998 inflation target (currently set at 7-10 percent) in 
order to consolidate the strong inflation performance registered in 
1997.
  This information will be included in the 1998 report to the Congress 
on the Loan Guarantees to Israel Program.
                                                  William J. Clinton.  
  The White House, February 24, 1998.

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