Stopping the pile of cash America pays to Israel every year isn’t a new idea. In fact, it comes up every few years, from both friends and foes of Israel, but surprisingly mostly from friends. There is a reason for this–actually six reasons.
I won’t try to retread all the reasons that policy experts have already covered, but I will settle on the most obvious and compelling, which is Israel doesn’t need it. The word “need” I’m defining as if the United States didn’t give Israel $3.1 (starting in 2018, $3.8) billion in military aid, known as Foreign Military Financing (FMF) each year, it would purchase everything it needs to defend the State of Israel without that cash.
Israel can pay its own way
Israel’s military budget is somewhere north of $16 billion ($15.9 billion in 2014), which is about 5.3 percent of its GDP (which is around $300 billion). With 8.5 million Israelis, that’s about $1,882 for each man, woman and child to pay for Israel’s existential defense. By comparison, the United States $600 billion defense budget costs us about $1,714 per capita. American FMF pays for about $365 per capita of Israel’s budget. Hence, Israel can afford to pay for itself.
No sizable change in Israel’s defense posture would result if there were no 10-year $3.8 billion in aid. The main thing that MOU provides is a sense of stability, for both American and Israeli defense companies, but mostly American. In reality, the aid is welfare for companies like Boeing, Ratheon, and Lockheed-Martin, to the tune of $1.475 billion.
It’s American corporate welfare
The current MOU gives Israel up to $775 million to spend in Israel. The new MOU takes that back to the U.S., and adds another $700 million to the pot.
Furthermore, the last MOU, which elapses in late 2018, allowed Israel to spend a quarter of the sum on purchases from the Israeli defense industry (the rest needed to be spent in the US). According to the new deal, this arrangement will fade out in a few years, dealing a heavy blow to the local arms industry. Netanyahu initially refused to agree to this clause but eventually folded.
There are other benefits the U.S. derives from its Israeli FMF. Israel develops and sells some of the most advanced weapons systems in the world, and forcing Israel to spend 23 percent or more of its defense budget in America degrades its negotiating position dealing with American defense contractors.
Raytheon won the contract to produce Tamir missiles for Israel’s Iron Dome missile defense system. That system was developed by Israeli firm Rafael Advanced Defense Systems. That contact was for $149 million, plus some technology licensing. Raytheon intends to sell the system to the Defense Department and other nations. If you cut through all the “press release” happy talk, essentially you see Raytheon muscling in on Rafael’s work.
I’m sure that Israel is happy to have American money, and American expertise, to help develop and produce these purely defensive weapons. In fact, it was President Obama who authorized $275 million to ramp up the project when Israel faced a rocket saturation and attrition scenario from Hamas and Hizbollah. But American defense industries, and the Pentagon, are always licking their chops at the latest Israeli innovation. Be assured that there’s a healthy heaping of self-interest in our military “handouts.”
Israeli industry and innovation suffer
Locking Israel to the teat of the American defense industry isn’t the best thing in the world for Israel. The new MOU will make Israeli industry suffer as jobs move to America. That may satisfy President-elect Donald Trump’s “make them pay” America First strategy, but it doesn’t put Israeli interests in the best long-term position.
There’s a very strong argument that Israel is actually the only military aid recipient in the world that really does pay for what it gets, with a dividend.
For every dollar Israel gets we spend a dollar to balance it
The secondary argument for ending Israeli FMF is that it’s the yardstick by which many other countries are measured for their own aid. Egypt received $1.3 billion in FMF, which is inexorably tied to Israel (generally 1/3rd of what Israel gets). Egypt also received $156-odd million in other aid, with no dividends other than making nice to them. Jordan got just over $1 billion, most of it classified as “Economic Support Fund” (ESF) to deal with Syrian refugees, and $300 million in FMF.
Overall, the U.S. spent over $7 billion this year in the Middle East, because for every dollar Israel gets, we have to spend a dollar somewhere else to balance it, lest claims of “unfair.” Cutting Israel’s aid hurts Israel’s potential enemies more than it hurts Israel.
The U.S. gives away more than Germany’s entire defense budget
Lastly, the way the U.S. throws cash out the window is shockingly irrational. If you ever want your eyes to fall out of your head, read the State Department’s Congressional Budget Justification – Foreign Operations. Pakistan got $890 million (population 182 million in 2013), while India, with 1.2 billion souls living there, received $87 million. Both are nuclear powers.
The pillowheads at Foggy Bottom who write the justifications come up with all kinds of policy reasons to hand out the cash, but it’s really just what they call in New Orleans “walking around money.” America pays to play at the table, because we’re afraid Russia or China will if we don’t. So what if they do? Our defense budget is nearly triple that of the second biggest spender, China. Russia spends a paltry $66 billion.
Saudi Arabia is the third biggest defense spender in the world, outspending Israel by a factor of 550 percent. UAE spends more than Israel by some accounts. The gulf states are far more fearful of a nuclear Iran or an Iraqi collapse than they are of Israel, but Israel is tied to America.
I hate to say this, but in many ways, Donald Trump is correct: The U.S. government has become the world’s chump, handing out $37 billion to other countries every year in direct aid, economic aid, military aid and all manner of contingency operations. This does not include money paid by the DOD to maintain foreign bases, house our troops, or conduct military operations. We hand out more than the entire defense budget of Germany.
Israel needs a partner, not a mommy
There are many ways America can support Israel. Most of them are unwritten–as in the social and cultural bonds between the two countries. Another way is by stick and carrot diplomacy. If Israel’s enemies know that America will intercede and punish anyone who attacks her, they won’t be so quick to take advantage.
For the last eight years, we’ve stood back and watched Israel take punishing rocket attacks, and even took the extraordinarily stupid and insulting step of stopping flights to Tel Aviv as if it were a war zone. Israel needs its back covered by America. But Israel doesn’t really need to be tethered by the apron strings of American taxpayer’s cash, and also forced to share its military technology with us as a precondition–with the added burden of spending the money here in the U.S.
Once he is sworn in, President-elect Trump doesn’t have to abide by Obama’s MOU. He can renegotiate it. He can even eliminate it and let Israel lobby Congress for specific programs. The Israelis may even prefer that. And while he’s at it, he can go a long way toward cutting the billions we throw away to balance what we give Israel and get America out of the “walking around money” business.
In the end, Israel needs a partner and an ally, not a nanny and a mother. That’s the best reason I have for stopping the annual handout.