U.S. Military Aid and the Israel/Palestine Conflict

The U.S. provides Israel $10.2 million* in military aid each day,
while it gives the Palestinians $0** in military aid.

“Since the October War in 1973, Washington has provided Israel with a level of support dwarfing the amounts provided to any other state. It has been the largest annual recipient of direct U.S. economic and military assistance since 1976 and the largest total recipient since World War ll. Total direct U.S. aid to Israel amounts to well over $140 billion in 2003 dollars. Israel receives about $3 billion in direct foreign assistance each year, which is roughly one-fifth of America's entire foreign aid budget. In per capita terms, the United States gives each Israeli a direct subsidy worth about $500 per year. This largesse is especially striking when one realizes that Israel is now a wealthy industrial state with a per capita income roughly equal to South Korea or Spain.”

- John J. Mearsheimer and Stephen M. Walt
"The Israel Lobby and U.S. Foreign Policy"

*Source: The Congressional Research Service's report "U.S. Foreign Aid to Israel," written by Jeremy M. Sharp, Specialist in Middle Eastern Affairs, dated June 10, 2015.

Read our memo on the new 10-year $38 billion aid package to Israel just signed by President Obama.

According to the report, the Obama Administration gave Israel $3.1 billion for Fiscal Year 2015 in direct bilateral military aid (also referred to as Foreign Military Financing or FMF). The U.S. government also gave $619.8 million for "joint" U.S.-Israel missile defense programs (designed to protect Israeli territory from potential outside threats), bringing total military aid to Israel to $3.7 billion per year.

Put another way, American taxpayers give Israel $10.2 million per day (in 2015).

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Over the last 20 years, the U.S. has been slowly phasing out economic aid to Israel and gradually replacing it with increased military aid. In 2007, the Bush Administration and the Israeli government agreed to a 10-year, $30 billion military aid package for FY 2009 through FY 2018.

There is also the strong possibility that annual aid to Israel will increase in the future: "At times, there have been reports indicating U.S.-Israeli discussions over a possible future ten year aid deal beyond FY 2018. Israeli media sources have said that the United States and Israel have held 'preliminary' discussions over future military assistance with Israel seeking between $4.2 billion and $4.5 billion in annual FMF."

As predicted, in November 2015, media reported that Israeli Prime Minister Benjamin Netanyahu was asking the American taxpayer to increase aid to Israel to $5 billion a year.

In August 2016, numerous outlets reported that President Obama was getting ready to sign a new 10-year agreement to provide Israel with $3.7 billion per year (a substantial increase over the current $3.1 billion) beginning in 2018. The agreement has not yet been finalized.

Israel is by far the largest recipient of U.S. foreign military aid (see how other nations compare). According to the CRS report, the President's request for Israel for FY 2015 will encompass approximately 53% of total U.S. foreign military financing worldwide. The report continues, "[a]nnual FMF grants to Israel represent 20% of the overall Israeli defense budget. Israel has the highest percentage in the world of defense expenditure as a percentage of Gross Domestic Product (5.6%)."

Contrary to ordinary U.S. policy, Israel has been and continues to be allowed to use approximately 26% of U.S. military aid to purchase equipment from Israeli manufacturers. According to CRS, “no other recipient of U.S. military assistance has been granted this benefit.”

Thanks in part to this indirect U.S. subsidy, Israel’s arms industry has become one of the strongest in the world. Between 2001 and 2008, Israel was the 7th largest arms supplier to the world, selling $9.9 billion worth of equipment. And it continues to grow stronger. In 2015, Israel sold $5.7 billion in military goods to other countries.

The former assistant Secretary of Defense from 2007 to 2009 asked, "How inexplicable is it that we are competing against the Israelis in the Indian defense procurement market at the same time we are subsidizing the Israeli defense industry?"

A U.S. government source estimates that Israel is using approximately $1.2 billion each year (38.7% of the aid it receives from the U.S.) to "directly support its domestic budget rather than to build on its arsenal of advanced US equipment."

The United States also contributes funds for a joint U.S.-Israeli Missile Defense Program designed to thwart short-range missiles and rockets fired by non-state actors (such as Hamas and Hezbollah) as well as mid- and longer-range ballistic missiles (this refers to Iran and/or Syria's arsenals). Arrow II, Arrow III, David's Sling, and Iron Dome refer to different projects under the umbrella of this Missile Defense program. In 2015, the U.S. spent $619.8 million on these programs and plans to spend between $280 and $601 million in 2017 (depending on Congressional approval).

By all accounts the United States has given more money to Israel than to any other country. The Congressional Research Service’s conservative estimate of total cumulative US aid to Israel (not adjusted for inflation) from 1949 through 2015 is $124.3 billion.

An October 2013 Washington Report article “A Conservative Estimate of Total Direct U.S. Aid to Israel: $130 Billion,” by Shirl McArthur, puts the cumulative total even higher.

According to McArthur, “[T]he indirect or consequential costs to the American taxpayer as a result of Washington’s blind support for Israel exceed by many times the amount of direct U.S. aid to Israel. Some of these ‘indirect or consequential’ costs would include the costs to U.S. manufacturers of the Arab boycott, the costs to U.S. companies and consumers of the Arab oil embargo and consequent soaring oil prices as a result of U.S. support for Israel in the 1973 war, and the costs of U.S. unilateral economic sanctions on Iran, Iraq, Libya and Syria. (For a discussion of these larger costs, see ‘The Costs to American Taxpayers of the Israeli-Palestinian Conflict: $3 Trillion,’ by the late Thomas R. Stauffer, June 2003 Washington Report, p. 20.)”


**Source: The Congressional Research Service's Report “U.S. Foreign Aid to the Palestinians”, written by Jim Zanotti, Analyst in Middle Eastern Affairs, dated July 3, 2014.

According to the report, the U.S. government has never provided Palestinians with military aid. "The Department of Defense Appropriations Act, 2015 (H.R. 4870), which passed the House in June 2014, contained provisions that would prohibit funds made available by the act from being obligated to the PA (§10033) or from being used to transfer weapons to the PA (§10024)." Aid to Palestinians is largely designated for the policing of their own people as well as for humanitarian and development needs. Such funds are only authorized once Congress has received proof that they will be used for "non-lethal assistance." Congress requested $441 million in aid for FY 2015.

The U.S. Agency for International Development (USAID) has provided the Palestinian people with some indirect economic assistance through funds distributed to U.S.-based NGOs operating in the West Bank and Gaza. According to the CRS report, "Funds are allocated in this program for projects in sectors such as humanitarian assistance, economic development, democratic reform, improving water access and other infrastructure, health care, education, and vocational training." The program is subject to a vetting process and to yearly audits...

The United States also provides funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), "which provides food, shelter, medical care, and education for many of the original refugees from the 1947-1949 Arab-Israeli war and their families—now comprising approximately 4.8 million Palestinians in Jordan, Syria, Lebanon, the West Bank, and Gaza." The amount allocated by the U.S. government for FY 2014 was $250.9 million. (Learn more about Palestinian refugees.)

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Additional Resources

Congressional Research Service:
U.S. Aid to Israel

Congressional Research Service:
U.S. Aid to the Palestinians

Book – Fallen Pillars: US Policy towards Palestine and Israel since 1945

Palestine Monitor Fact Sheet on US Aid

Times of London Graphic on US Aid

Arms Transfers to Israel: 1993 to Present

U.S. Agency for International Development (USAID)

Jewish Virtual Library on US Aid

Organizations

Council for the National Interest

US Campaign to End the Israeli Occupation

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