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  • USIEA Team

Military Assistance

Updated: Aug 31, 2023

Israel Update – Week of August 6, 2023

Military Assistance: In 2016, the U.S. and Israel signed a Memorandum of Understanding (MOU). Building upon previous U.S.-Israel MOUs, the first of which was signed in 1974, the U.S. promised 10 years of military assistance to Israel, totaling $38 billion. Israel would receive $3.8 billion each year, where $500 million of that sum is earmarked for missile defense – David’s Sling, Iron Dome and the Arrow family. Representing an $8 billion increase of U.S. military aid since the last MOU in 2007, this commitment reflects the costs of sophisticated military technology deemed necessary for Israel to retain a qualitative military edge in a highly tumultuous and unstable neighborhood. It includes provision for military aircraft, missile defense and continuing cooperative defense research and development. By virtue of this MOU, Israel remains the leading recipient of U.S. foreign military assistance in the world. The MOU went into effect in 2018 and will run until 2028.

Before proceeding any further, two points should be mentioned.

  1. For many years, U.S. economic aid, in the form of Economic Support Fund (ESF) grants, helped subsidize a lackluster Israeli economy, but since the rapid expansion of Israel’s high-tech sector and overall economy in the 1990s (sparked partially by U.S.-Israeli scientific cooperation), Israel has become one of the world’s most dynamic economies (as of 2022, Israel’s Gross Domestic Product per capita ranks 14th worldwide). Israel and the U.S. agreed to gradually phase out economic grant aid to Israel. In FY2008, Israel stopped receiving ESF altogether.

  2. The U.S. notes the importance of making funding resources available to finance the purchase of U.S. military goods and services in the U.S. Both sides agreed that the amount of grants available for Off Shore Procurement (OSP) – funds spent in Israel – should be gradually phased out such that by FY2028, all military assistance funding will be spent in the U.S. on things like F-35 fighter jets, M-4 rifles, and JDAM guided bombs.

On July 17, 2023, an article appeared in Tablet Magazine called “End U.S. Aid to Israel.” The article was written by Jacob Siegel and Liel Liebowitz, two of the magazine’s senior editors. The article posits that the congressional blowback, whether justified or not, that Israel receives as a result of receiving U.S. military assistance is not justified by the money that Israel receives. “Nearly all military aid to Israel – other than loan guarantees, which cost Washington nothing – consists of credits that go directly from the Pentagon to U.S. weapons manufacturers. In return, American payouts undermine Israel’s domestic defense industry, weaken its economy, and compromise the country’s autonomy—giving Washington veto power over everything from Israeli weapons sales to diplomatic and military strategy.” In short, the aid Israel receives does not justify the price Israel pays to receive it. The authors take a deep dive into the mathematics of Off Shore Procurement and assert that the price that the local defense industries end up paying is too high – Israel doesn’t need the aid anymore. The article closes on a hopeful note: “Ending aid would not mean the end of the U.S.-Israeli military alliance, intelligence sharing, trade, or any mutual affinity between the countries. Rather, it would allow both sides to see what each is getting in return for what. In the words of retired IDF Major General Gershon Hacohen: ‘Once we are not economically dependent on them, the partnership can flourish on its own merits.’”

Rebuttal articles were soon to come. The first wave of articles appeared in Tablet Magazine, about ten days after the Siegel-Leibowitz article was published. Dennis Ross, former special Middle East coordinator under President Bill Clinton, wrote an article called “The Wrong Message at the Wrong Time.” Congressman Ritchie Torres (D-NY) wrote an article called “Ending Aid Won’t Stop the Demonization of Israel.” The most forceful rebuttal, called “Dead Wrong,” was written by Senator Ted Cruz (R-TX). Cruz first states that Siegel and Liebowitz are not wrong in their assertion that the U.S. benefits from military assistance at least as much as Israel does:

“We get back at least 10 times more than what we send. It would take us uncountable billions to recreate some of the military advances and intelligence capabilities that the Israelis provide to us.”

Cruz also agrees with the assertion that certain congressmen share a certain hostility towards Israel: “They are pathologically obsessed with undermining Israel’s security and the U.S.-Israel relationship.” Nevertheless, says Cruz, the Tablet Editors are not reading the tea leaves correctly: “It still nevertheless underestimates the breadth, depth, and – most importantly – the mechanics of how the Biden administration has been undermining Israel’s security and the U.S.-Israel alliance. An enormous amount of how the Biden administration attacks Israel has nothing to do with aid or even pressure. If all military aid was immediately ended, the anti-Israel zealots in the administration wouldn’t miss a beat.” Cruz brings no less than ten examples of how the Biden Administration has “pursued a campaign against Israel that is granular, whole-of-government, and often conducted in secret.” He believes that none of these policies would be hampered by reducing military aid to Israel. Cruz concludes that eliminating military aid to Israel at this time would incur unnecessary risks:

“The obvious, straightforward solution is to continue to provide the military assistance that our Israeli allies need to protect their security and ours – and at the same time, fight to stop the Biden administration’s reckless anti-Israel policies.”

Last week, the discussion spilled over from Tablet Magazine to the rest of the blogosphere. On August 9, 2023, Jon Tobin, editor-in-chief of JNS (Jewish News Syndicate), wrote an article called “This is not the moment to end US aid to Israel.” Tobin takes a different path than Cruz, a path that is considerably less overtly antagonistic towards the Biden Administration. Tobin links the opposition to military aid to the opposition to Israel’s government: “The burgeoning movement to go ahead with it is rooted in contempt for Israel’s democratically elected government and the majority of its citizens, and as a way to exert pressure on the Jewish state and downgrade the long-term and crucial alliance.”

While Tobin believes that there is long-term merit to cessation of the funding, now is not the time to do so as it sends the wrong message. “For it to happen in the context of the debate over judicial reform in Israel in which critics of Prime Minister Benjamin Netanyahu are falsely labeling coalition members as opponents of democracy and would-be authoritarians would lend credence to these libels. Nor should it be carried out at a time when doing so would buttress the campaign of hate against Israelis who are Mizrachi, nationalist or religious being waged by mainstream pundits.” Tobin correctly congratulates Netanyahu for weaning Israel off of EMF. He was the Minister of Finance in the mid 2000s, and his policies replaced socialism with free-market economics. Netanyahu made a promise to Congress that he would wean Israel off of EMF, and he kept his promise. Military aid, on the other hand, was another story. It was a necessary evil that enabled Israel to keep its Qualitative Military Edge (QME) over its adversaries.

After putting the extent of the aid in perspective, Tobin reverts back to his original argument, that now is not the time. “The anti-Israel left, including groups like J Street, have supported limits or conditions placed on aid so as to hamstring the Jewish state’s efforts to fight terrorists and force it to make concessions to Palestinians who do not want peace. They have now been joined by more mainstream figures… who support a severing of ties because of their hatred for Netanyahu and his government.”

He concludes emphatically: “Cutting these ties in the context of the debate about judicial reform and the efforts to topple Netanyahu would be perceived as the first step towards ending the alliance with the United States rather than a move towards a healthier relationship. Israel’s friends must reject this linkage. It would be better to wait until a moment, like that of 1996, when Netanyahu can end the aid as an indication of the Jewish state’s economic, military and political strength, as opposed to a retreat away from a relationship with Washington that remains key to Israel’s future.” Cutting military assistance at this time makes it look like the U.S. is using the purse string as a whip against Israel’s legally elected government.

Not to be outdone, Yaakov Katz, Chief Editor of Israel’s most widely-read English news site, the Jerusalem Post, aired his views in an article titled “America’s best investment in Israel is continuing military aid.” Referring back to the original Siegel-Leibowitz article, Katz disagrees that the U.S. has “veto power over everything from Israeli weapons sales to diplomatic and military strategy.” Israel does what it wants over the objections of the U.S. State Department, as the recent passage of the first stage of Judicial Reform will attest.

Then, Katz asks another question: Assuming that Israel stops receiving U.S. aid, does anyone think it will stop purchasing American aircraft? “Do they want Israel to buy MiG fighter jets from Russia, J-20s from China, or fourth-generation Eurofighter Typhoons (older models than American-made F-35 that Israel operates) from Airbus? Or maybe they think that Israel is going to magically develop and manufacture its own stealth fighter jet? While I think Israel can definitely do it, such a project will take years and almost certainly turn into a waste of time and resources.” Katz also looks at the effects of a potential shutdown of U.S. military support on Israel’s adversaries: “If US military support ends, what does that show Iran, Hezbollah, and Hamas? What will they think, those who already start every day plotting ways to weaken and hurt Israel? Will it make them believe that Israel is stronger as a result and now more independent, or will it make them think that there is a problem in the U.S-Israel relationship – which they can now take advantage of to further harm Israel?” Katz touches upon shared values and shared interests and then concludes:

“The current situation might not be perfect, but it is the best way to advance American and Israeli interests in an increasingly volatile Middle East.”

Four different articles with four different viewpoints. One viewpoint that is glaringly missing is the viewpoint of the person in the Israeli Defense Industry. How much of what has been said above is true and how much is hyperbole? How does U.S. funding influence the ways that Israeli defense contractors do business? How would their business change if the U.S. were to shut the faucet? I deal with these questions every day, and I’ll be discussing them right here next week.

Wishing you a quiet week,

Ari Sacher

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