I agree that the use of the term “Israel Firster” is a bad choice of words. The conspiracy theory that American Jews have dual loyalty is just that, a conspiracy theory and must be refuted in the strongest possible way.
However, this incident is a perfect example of a more pressing problem with the way the debate plays out over Israel in the American Jewish community and in American politics. Rather than engage directly over whether or not American and/or Israeli policies are actually advancing American and Israeli interests, an ill-chosen word or phrase is used to delegitimize a critic or in this case an entire institution. The real question we should be debating is not the use of the term "Israel Firster" but the underlying questions being raised by CAP and others over the direction of American foreign policy – how best to achieve a two-state solution and how to prevent Iran from attaining a nuclear weapon without going to war.
Disagreements over substantive issues should be engaged with substantive arguments and shouldn't be sidestepped with debates over word choice.
One final and important point: American Jews and communal leaders should not overreach with charges of anti-Semitism in incidents like this. When real anti-Semitism actually rears its ugly head, people will be far less likely to listen.