US Aid to Israel: Questioned on Both the Left and the Right

Believe it or not, outside of Capitol Hill, America’s $3 billion per year of military aid to Israel actually gets discussed.

On the left, the discussion of aid to Israel is one of several major dividing lines over what are seen as “acceptable” peace groups (J Street, Americans for Peace Now, Churches for Middle East Peace, et al) and those that are not (Jewish Voice for Peace, the US Campaign to End the Occupation). Of course, “acceptable” in this case is decided by the centrist part of the “pro-Israel” contingent, which is doing harm to Israel and Israelis daily, but that’s a matter for another time.

The latter groups call for the US to withhold aid to Israel until it ends its occupation and complies with international law. There are other calls to end aid to Israel which are starker and more hostile to Israel. But in the past year, I have heard more and more activist groups, including some who are sympathetic to Israeli fears and concerns, considering working on campaigns to stop American military aid to Israel.

Indeed, some prominent mainstream voices are starting to weigh in on this issue. Whether one supports ending or threatening aid to Israel or not, the fact that it is being discussed more openly should be welcome in any free society.

There are also those on the right who have long advocated for an end to US aid to Israel. These calls have come more from pundits and individuals than from groups, and are based on entirely different considerations from any of the rather wide spectrum of views mentioned above.

The notion is that, contrary to the view of peace groups, the aid the US gives Israel already constrains its actions and Israel would be better off without the aid but with the freedom to act without US interference.

This notion was most prominently promoted in the “Clean Break” paper. This was an advisory paper prepared for Benjamin Netanyahu in 1996, during Bibi’s first term as Prime Minister by an advisory group of neoconservatives led by Assistant Secretary of Defense Richard Perle. The group consisted of prominent American and Israeli neocons.

While Clean Break recommended only that Israel stop receiving economic aid, not military, this was only a first step. The paper stipulates: “Military aid is separated for the moment until adequate arrangements can be made to ensure that Israel will not encounter supply problems in the means to defend itself.” Indeed, Israel was, over the next decade, weaned off of economic aid, though military aid was increased to compensate. George W. Bush’s final boost of aid fully replaced the $1.2 billion per year of economic with an equal amount of military aid, bringing the total annual aid up to $3 billion.

Now, Yarden Gazit, an analyst for the Jerusalem Institute for Market Studies (JIMS), adds further fuel to this argument. In his study, he asserts that US military aid actually costs Israel money. His arguments, mostly not very strong, are below, with my comments in bold italics:

• US aid comes in a bundle with aid to Egypt, Jordan and other countries. Egypt receives from the US two thirds of the sum granted to Israel. But according to JIMS, every dollar granted to Egypt requires Israel to spend between 1.6 and 2.1 dollars to maintain the balance of power. As a result, every dollar granted to Israel costs Israel between 1.06 and 1.39 dollars. [MP: Hard not to notice that this is an Israeli obsession with a military edge over countries with which it has been at peace for years]
• The US requires that 75% of the grant be spent in the US. This causes Israel to buy defense products at a high price, sometimes even products Israel may not need. [MP: Gazit fails to note that this is actually a break the US gives Israel and no one else. All other recipients of Foreign Military Financing (FMF) money are required to spend 100% of that money in the US]
• According to JIMS, the Defense Ministry purchases US products even though Israeli industry is capable of producing cheaper products, which better fit the IDF’s demands. JIMS estimates the direct loss faced by Israeli industry at $600-750 million per year. The Defense Ministry often requires Israeli companies to purchase expensive raw materials in the US in order to use up available grant money. This raises the cost of the final products sold by Israeli industry and hurts its competitiveness in Israel and on the world market [MP: This is Gazit’s best point, which I will address presently]
• Since the Israeli army purchases so much in the US, some locally produced defense products are not used by Israel’s own army. This hurts Israeli industry’s reputation on the international market and may cause a loss of sales [MP: This is speculation on Gazit’s part, and given that tiny little Israel is the world’s eighth biggest arms exporter, it seems not to be a realistic concern]
• The industry loses valuable potential contracts because of US-imposed restrictions on Israeli defense exports. [MP: For example, the Bush Administration became incensed and scuttled the 2005 deal where Israel tried to sell advanced drones to China, who might then use the drones against Taiwan, a US ally, and potentially endanger US forces there as well.]

The more fundamental point that really underlies Gazit’s argument, and is quite valid, is that in countries like both Israel and the US whose military and industry have an intimate, virtually melded relationship, military research and development and subsequent manufacturing and sale are a central cog driving the civilian economy. Therefore, getting money which Israel then spends back in the US probably does prevent some private sector growth in Israel. Whether this is enough to offset the gains from the 25% of military aid Israel can spend domestically as well as the benefits the private sector gets from various joint projects (the famed Merkava tank, for example, was underwritten by the US) is not clear, at least not to me.

So, Gazit does have a point as regards the loss of some fuel from the military for the Israeli economy. But I doubt anyone would seriously contend that economic considerations alone would lead Israel to abandon US aid.

Why? Because the aid itself is the tangible foundation of the US-Israel “special relationship.” I once posed the question of how Israel would survive without US aid to a veteran senior American diplomat, a friend of mine who worked for years in Israel. His response was that if Israel did not wish to comply with US conditions for such aid, they would refuse it and get by just fine.

He was right. In the short term, it would certainly be a hit on the Israeli economy. They would, undoubtedly, divert money from other places (probably social services, and you can bet your boots the settlements will still get their shekels) to make up for the loss. It would be about 10.7 billion shekels from a budget of 313.3 billion (that’s the 2009 figure). But in the long term, the infusion of additional military funds into the economy would generate enough growth to make up for the loss. This really serves to mitigate the power a threat to US aid would represent.

But that isn’t really the issue.  The annual military aid is a symbol, because it is untouchable on Capitol Hill. Despite the massive economic crisis in America, where all sorts of departments are facing major budget cuts, a country that did as well as any in the world of escaping the global economic meltdown of 2008, with a per capita GDP that easily places it among the more well-to-do countries in the world receives more foreign aid by far than any other country except Iraq (and that only due to the fact that we invaded and occupied Iraq so we have to maintain its government and military despite scant local resources).

If that aid is suddenly vulnerable, groups like AIPAC fear, it would undermine the “unshakable” special relationship between the US and Israel. Consider the conclusion of AIPAC’s Raphael Danziger: “The reduction or elimination of U.S. aid to Israel would undercut the vital U.S.-Israel relationship and thereby make it more difficult to achieve U.S. objectives of over four decades standing. Because aid to Israel contributes to stability in a key region full of real threats to U.S. security, it is hard to see a place where U.S. foreign assistance fulfills its mission more or is better spent.”

This is really why AIPAC and other groups are worried; they are concerned that Israel will no longer get preferential treatment. And, if that should happen, it would have no one to blame but itself. As has become so evident in the past year, Israel takes the special relationship with the the US for granted and believes it is so special that they can spit in America’s face with no fear of repercussion. And, thus far, thank to their allies on the Hill they’ve been right.

But some in the Israel establishment recognize the danger and are trying to urge their leadership to start treating the Americans with more respect (my thanks to Ori Nir of Americans for Peace Now for pointing me to this piece). Shimon Stein of the Israeli Institute for National Security Studies (INSS) concludes that “…as a nation lacking alternatives in terms of strategic alliances, Israel must do its utmost to preserve the support of the United States, its only ally.” Clearly, Stein believes, as most serious analysts do, that the constraints the US puts on Israeli behavior, which are hardly very strict, are well worth it for the benefit of having the world’s only superpower protecting Israel, militarily, diplomatically and politically.

So much for the right-wing argument, but what about the left wing one?

I’m going to divert here just address one point that peace groups sometimes bring up: that is the argument that “we don’t have good schools, adequate health care and other social services so why do we give $3 billion a year to Israel?” The argument is faulty because A. that $3 billion is a drop in the ocean of the US budget and B. if anyone seriously believes that the money wouldn’t go right back into the same corporate coffers it is going into now, they’re not just hopelessly naïve, they’re comatose.

Having said that, it is important to note that the “special relationship” has done no good and much harm to both Israel and the US.

I fully support a US foreign policy that makes each and every Israeli more secure. But flooding the Middle East with weapons and protecting Israel from the international community’s reaction to 43.5 years of occupation, expanding settlements, the inhuman siege of Gaza, the detentions of thousands of Palestinians without trial, and so many other daily crimes of the occupation only makes Israel less secure and, as I’ve pointed out previously, reduces to just about nil Israel’s incentive to make the sacrifices and take the risks for peace.

No, what is needed is a solid relationship of allies that is based on mutual interests and cooperation, as the US has with many other countries. If the US gives, it should expect something in return.

So, on that basis, it is not unwise for progressive groups to bring up the question of US aid to Israel, particularly its being unconditional and closed to debate. The discussion itself might serve to begin a process of normalizing the relationship between the US and Israel.

Such a program would have to be very clear in its goal, and that is to raise debate. There is no chance in the foreseeable future that aid to Israel would be changed in any way. For one thing, the US has given Israel a commitment that lasts almost to the end of this decade. For another, since halting aid to Israel also means halting it to Egypt and Jordan, and will also make it nearly impossible for the US to get any sort of arms sales to any Middle eastern country through Congress, it would mean a serious realignment of US policy in the region that is much broader than just the question of the Palestinians.

Finally, any threat to US aid to Israel would probably bring a major intensification of lobbying, not just from the usual sectors, but from the much more powerful military contractors. Lockheed-Martin, Northrup-Grumman, Boeing and other major defense contractors do not want to see this spigot (which includes money much broader than the $4.5 billion or so that Israel, Jordan and Egypt get annually) stopped or even slightly congested.

So the chance of success in affecting aid to Israel is nil, but this should not be the goal anyway. The chance to begin to create an Israel-American relationship that is more conducive to peace and to lasting, rather than momentary, regional stability in the Mideast is very real.

If the long-term sights can be set on just opening the debate, using the question of the utility and logic of continuing the $3 billion per year aid to Israel as a lever, it can succeed. Such a program will, inevitably, attract many who are unremittingly hostile to Israel. But, like the BDS movement which now has many liberal Israelis and pro-Israel diaspora Jews involved in promoting boycotts of settlement products, theaters and universities, if those of us who want to see a better future for Israel help to drive it, especially from the beginning, it can bring about a positive change in the politics around the entire conflict.