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With U.S. budget cuts looming, could aid to Israel be next?

Israel’s ‘security assistance’ comes from the same pot of money as economic aid. With the White House promising cuts to that part of the federal budget, could we see a surprise reduction in Israel’s share?

U.S. Secretary of Defense Jim Mattis meets with Israeli Defense Minister Avigdor Liberman at the Pentagon, March 7, 2017. (DOD photo by U.S. Air Force Staff Sgt. Jette Carr)

U.S. Secretary of Defense Jim Mattis meets with Israeli Defense Minister Avigdor Liberman at the Pentagon, March 7, 2017. (DOD photo by U.S. Air Force Staff Sgt. Jette Carr)

Recent White House statements hint at a massive increase in U.S. military spending and a corresponding cut in the country’s foreign aid, a prospect that has prompted more than 120 top generals, among them former CIA director Gen. David Petraeus, to sign a letter urging members of Congress against the move.

At issue is the so-called 150 Account, the line item in the federal budget tied to “international affairs” — a $50 billion appropriation covering everything from consular services to disaster relief to funding for international organizations like UNICEF. (You can find the entire 2017 budget request here.)

Seldom mentioned in the debate over foreign assistance, however, is the last item in the 150 Account, “Foreign Military Financing,” which alone represents more than 10 percent of the account’s total. And of that, more than half — $3.1 billion — is set aside for Israel.

With all the talk of significant cuts to the 150 Account, some are wondering whether a proportional reduction in U.S. aid to Israel is also in the offing. Despite vows by lawmakers that dramatic cuts to the foreign assistance budget would be “dead on arrival,” The Jerusalem Post, in a December report, cited a senior Israeli military officer who expressed concern over whether the new U.S. administration could backtrack on earlier commitments.

The answer might come down to a legal distinction.

U.S. commitments to Israel, according to the budget’s notes, were set “in accordance with” a Memorandum of Understanding signed in 2007, at the tail end of then-President George W. Bush’s second term. A similar 10-year agreement, inked last September by the outgoing administration of Barack Obama, is to take effect in 2018 and would boost the annual aid amount to $3.8 billion.

In both cases, the “understandings” do not rise to the level of law, and since the combined amount pledged by each prior president is to be allocated annually, the White House must “request” Israel’s allotment each year as part of the 150 Account (for more background on recent U.S. aid to Israel, see this Obama White House factsheet).

In other words, the current White House could conceivably propose cuts to that allotment.

The budget request is due to be announced this Thursday, according to a report yesterday in The Washington Post. By all accounts, it will include “historic” reductions in federal spending, including for foreign assistance. And though much of the analysis leading up to the announcement has centered on its ideological underpinnings — what the chief White House strategist called the “deconstruction of the administrative state” — earlier statements by the administration suggest that it could seek to scale back financial support for Israel.

As a candidate, the new president suggested that several traditional U.S. allies, including Israel, could afford to bankroll their own military spending. And despite vows to move the U.S. embassy to Jerusalem, the White House has instead voiced its disapproval of recent Israeli plans to increase construction on occupied Palestinian land.

‘I’d like to see you hold back on settlements for a little bit. We’ll work something out,’ Donald Trump tells Benjamin Netanyahu at a White House press conference, February 15, 2017. (Avi Ohayon/GPO)

‘I’d like to see you hold back on settlements for a little bit. We’ll work something out,’ Donald Trump tells Benjamin Netanyahu at a White House press conference, February 15, 2017. (Avi Ohayon/GPO)

None of this dilutes the fact that the administration has also named a settlement proponent as its ambassador to Israel, but even that counts as mere posturing when measured against the billions in aid promised by previous administrations. Maintaining that amount, particularly given the trade-offs in other critical government functions, could not only compromise the current administration’s ideological bent, it could, paradoxically, threaten Israel.

As one former AIPAC lobbyist wrote last week:

Leaving Israel untouched amid the expected slashing, particularly for hunger and other humanitarian needs, will only heighten resentment toward the Jewish state, with its strong economy and high standard of living, at the expense of needier and more vulnerable countries.

Even if the administration proposes cuts, the question is whether Congress, which must approve all appropriations, would object. Here, the common wisdom about Congressional support for Israel may give way to the same “America first” populism that helped Republicans sweep both chambers in the last election. A massive aid transfer to Israel might not sit well with these members’ constituents, and proposed cuts could conceivably pass without the usual objections from Israel’s conservative American backers.

If all of this seems far-fetched, it’s worth remembering that Benjamin Netanyahu himself saw it coming. It was he, after all, who told a joint session of the U.S. Congress, way back in July of 1996, that he would “lay the foundation for [Israel’s] total self-reliance.”

“In the next four years,” he declared before then-President Bill Clinton, “we will begin the long-term process of gradually reducing the level of your generous economic assistance to Israel.”

Although Netanyahu was technically true to his word, U.S. assistance to Israel never actually waned. Barely 18 months after his Capitol Hill pledge, he had directed his finance minister to begin “phasing out America’s $1.2 billion in economic aid to Israel,” but that money didn’t make it back to the U.S. Treasury. Instead, it was re-directed to Foreign Military Financing, where the combined total of aid to Israel became the basis for the first 10-year arrangement with the United States. Worth $21.3 billion, it was, according to an AIPAC factsheet, meant to “increase security assistance to Israel while phasing out economic aid.”

But with Israel’s “security assistance” coming from the same pot of money as U.S. economic aid, the question is whether Netanyahu’s 1996 strategy could backfire. We’ll know more once the draft budget goes public.

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    1. i_like_ike52

      Almost all the aid money is spent in the US, creating many jobs for American workers. However ending the aid would ba a blessing for Israel, returning at least some of those jobs to Israel, and reducing the psychological dependence many Israelis have on the US, and giving Israel more flexibility in the world marketplac, for example enabling Israel to buy from Airbus instead of being forced to buy from Boeing.

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