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Thursday 20 October 2011

United States needs to reevaluate its assistance to Israel

United States needs to reevaluate its assistance to Israel

By Walter Pincus, Published: October 17 
As the country reviews its spending on defense and foreign 
assistance, it is time to examine the funding the United States provides to Israel.
Let me put it another way: Nine days ago, the Israeli cabinet 
reacted to months of demonstrations against the high cost of living 
there and agreed to raise taxes on corporations and people with high 
incomes ($130,000 a year). It also approved cutting more than $850 
million, or about 5 percent, from its roughly $16 billion defense budget in each of the next two years. 

If Israel can reduce its defense spending because of its 
domestic economic problems, shouldn’t the United States — which must cut military costs because of its major budget deficit — consider reducing 
its aid to Israel?
First, a review of what the American taxpayer provides to Israel.
In late March 2003, just days after the invasion of Iraq, President George W. Bush requested the approval of $4.7 billion in military assistance 
for more than 20 countries that had contributed to the conflict or the 
broader fight against terrorism. Israel, Jordan, Egypt, Afghanistan, 
Pakistan and Turkey were on that list.
A major share of the money, $1 billion, went to Israel, “on top of the $2.7 billion regular fiscal 
year 2003 assistance and $9 billion in economic loans guaranteed by the 
U.S. government over the next three years,” according to a 2003 study by the Congressional Research Service (CRS).
Then in 2007, the Bush 
administration worked out an agreement to raise the annual military aid 
grant, which had grown to $2.5 billion, incrementally over the next 10 
years. This year, it has reached just over $3 billion. That is almost 
half of all such military assistance that Washington gives out each year and represents about 18 percent of the Israeli defense budget.
In addition, the military funding for Israel is handled differently than 
it is for other countries. Israel’s $3 billion is put almost immediately into an interest-bearing account with the Federal Reserve Bank. The 
interest, collected by Israel on its military aid balance, is used to 
pay down debt from earlier Israeli non-guaranteed loans from the United 
Another unique aspect of the assistance package is that 
about 25 percent of it can be used to buy arms from Israeli companies. 
No other country has that privilege, according to a September 2010 CRS 
The U.S. purchases subsidize the Israeli arms business, 
but Washington maintains a veto over sales of Israeli weapons that may 
contain U.S. technology.
Look for a minute at the bizarre formula that has become an element of U.S.-Israel military aid, the so-called 
qualitative military edge (QME). Enshrined in congressional legislation, it requires certification that any proposed arms sale to any other 
country in the Middle East “will not adversely affect Israel’s 
qualitative military edge over military threats to Israel.”
2009 meetings with defense officials in Israel, Undersecretary of State 
Ellen Tauscher “reiterated the United States’ strong commitment” to the 
formula and “expressed appreciation” for Israel’s willingness to work 
with newly created “QME working groups,” according to a cable of her 
meetings that was released by WikiLeaks.The formula has an obvious problem. Because some neighboring 
countries, such as Saudi Arabia and Egypt, are U.S. allies but also 
considered threats by Israel, arms provided to them automatically mean 
that better weapons must go to Israel. The result is a U.S.-generated 
arms race.
For example, the threat to both countries from Iran led the 
Saudis in 2010 to begin negotiations to purchase advanced F-15 fighters. In turn, Israel — using $2.75 billion in American military assistance — has been allowed to buy 20 of the new F-35 fifth-generation stealth 
fighters being developed by the United States and eight other nations. Another military program, called U.S. War Reserves Stocks for 
Allies, begun in the 1980s, allows the United States to store arms and 
equipment on Israeli bases for use in wartime. In the 1990s, the 
arrangement was expanded to allow Israel to use the weapons, but only 
with U.S. permission. During the 2006 war against Hezbollah in Lebanon, 
the United States gave permission for Israel to use stored cluster 
artillery shells to counter rocket attacks. The use drew international 
complaints because the rockets struck civilian rather than military 
The initial limit was $100 million worth of stored 
missiles, armored vehicles and artillery munitions, but that has 
increased over time. It reached $800 million in 2010, $1 billion this 
year and by 2012, it is expected to grow to $1.2 billion.
the mid-1990s, the United States and Israel have been co-developing 
missile defense systems designed to meet threats from short-range 
rockets as well as longer-range ballistic missiles. All of the systems 
involved have gained support from Congress, which frequently earmarks 
additional funding for Israeli weaponry. 
For example, the House 
and the Senate added $129.6 million to the $106.1 million the Obama 
administration had in the fiscal 2012 budget for these programs. In the 
2011 bill, Congress added $205 million for the Iron Dome system, which 
defends against short-range rockets and mortars. That was on top of 
$200 million the administration sought for the U.S. contribution to 
other cooperative missile-defense systems.
Among reductions now 
being discussed in Israel is a delay in purchasing more Iron Dome 
systems beyond those to be paid for by the United States’ $205 million. 
In addition, the Israeli military may freeze its spending on other 
missile defense systems, the very ones for which Congress approved 
additional funding this year.
The question for the Obama 
administration, Congress and, in the end, perhaps the American public, 
is: Given present economic problems, should the United States supply the money to make up for reductions the Israelis are making in their own 
defense budget?

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