Israel Costs U.S. Annually More Than Bosnia Reconstruction Will Cost Entire World

By Richard H. Curtiss

Foreign ministers and foreign aid officials representing 52 countries met in London Dec. 9 to consider what the Washington Post called "the gargantuan task...of planning the reconstruction of Bosnia, starting essentially from scratch on...a three-to-five-year mission of incalculable costs, complexities and uncertainties." Total cost was estimated at between $5 billion and $6 billion. The World Bank and other international financial institutions are expected to pick up $3 billion of this and the European Union suggests that European countries pay $2 billion and the United States pay the remaining $1 billion. The Clinton administration has pledged only $600 million, however, because, as a State Department official pointed out at the London meeting, "Bosnia is in Europe and we think the Europeans should lead here."

Funding for the giant task, one of the most important multinational economic efforts in Europe since the end of the Marshall Plan, probably will continue to preoccupy the finance ministers of the Western world for some time to come. Yet the total bill for all participants will amount to less than the annual $6.321 billion the U.S. government provides in grants and loan guarantees to Israel (see box on this page), a country with a population of, at most, 5.5 million people who have not been engaged in a major war since Israel's 1982 invasion of Lebanon almost 14 years ago.

What in the world do the Israelis do with all that money? They receive more aid every two years than the total of $11 billion the U.S. spent over a period of many years on the entire Marshall Plan to rehabilitate the economies of both the European and the Asian countries devastated in World War II.

The grants and loan guarantees to Israel are on such a vast scale that it is almost obscene to discuss U.S. government expenditures and budget cuts in any other field while keeping aid to Israel "off the table." But both Republicans and Democrats in Congress have agreed to do exactly that.

In fact, the scope of aid to Israel can only be compared to some historic relief programs after great natural disasters. For example, with 19 tropical storms and hurricanes, 1995 was the second busiest Atlantic hurricane season in history, trailing only the year 1935 which had 21 such storms. The total bill for insured property damage attributed to these 1995 storms in the United States, the Virgin Islands and Puerto Rico combined was $3.35 billion. This means that the cost of Israel to U.S. taxpayers in 1995 was almost twice the cost of damages from the second worst hurricane season on record to owners of homes and businesses from Maine to Florida and including U.S. Caribbean territories.

U.S. Grants to Israel in FY 1993
(in billions)

From FY '93 foreign aid budget

$3.000

From other parts of FY '93 budget or off budget

1.271

Total 1993 grants

$4.271

Interest paid by U.S. on money borrowed for 1993 grants to Israel (paid during first month of fiscal year rather than on a quarterly basis as with all other foreign aid recipients)

.050

U.S. loan guarantees for Israel for FY 1993

2.000

Total 1993 grants, interest, and loan guarantees

$6.321

A closer parallel is the similarity in aid to Israel and the cost of the devastating Jan. 17, 1994 earthquake centered in the Los Angeles suburb of Northridge, which did an estimated $7 billion in damage throughout heavily populated Los Angeles county and adjacent areas. The difference is that instead of being just a one-time disaster, the annual bill to U.S. taxpayers for grants and loan guarantees to Israel has remained at this total ever since fiscal year 1993, and it appears that it will remain at this or an even higher level for 1996.

The need for congressional support for the deployment of U.S. ground troops to Bosnia in accordance with the Dayton agreement put the administration of President Bill Clinton into a dilemma. Congress had given him a $243 billion defense bill for 1996. That was $7 billion more than he had requested and he had planned to veto the bill and then try to negotiate a deal with Republicans to shift some of the money to housing, the environment, education and other top-priority Democratic programs he feels will be not be adequately funded under the Republican "Contract With America" budget.

Given the need to use some of the $7 billion to fund U.S. peacekeepers in Bosnia, however, Clinton decided to sign the bill and look for money for his domestic programs elsewhere. Diversion of taxpayer aid to Israel for a year could have solved the problem for both sides if Congress had not taken it off the table.

By contrast, there was heavy Republican criticism when the General Accounting Office revealed Nov. 9 that the Clinton administration had spent $13.4 million preparing its doomed health care initiative and another $433,966 defending a lawsuit that challenged the secrecy in which first lady Hillary Rodham Clinton and her collaborators had assembled the plan. Rep. William F. Clinger Jr. (R-PA) said he was "shocked to learn two years after the fact that nearly $14 million in taxpayer funds was spent by the White House on the President's Health Care Task Force."

His constituents might be even more shocked if they realized that the administration's expenditure was the equivalent of less than a day's aid to Israel, which amounts to $17,317,808 a day, seven days a week, 365 days a year. The cost of defending the lawsuit, therefore, was the equivalent of only 36 minutes worth of aid to Israel. Somehow very few members of Congress have found time to mention in public how shocked they are about this open-ended Israeli lien on the U.S. treasury.

One of the most potent lobbies on Capitol Hill is the tobacco lobby. It has spent $16.7 million over the past decade on campaign contributions to congressional candidates. However, that's less than a single day's worth of U.S. aid to Israel. It's no wonder that while tobacco's clout with Congress is slipping, the Israel lobby's is increasing. The 116 deceptively named pro-Israel political action committees (PACs) donated $21,518,883 to congressional candidates in the 10 years from 1980 to 1990.

How much of this came from U.S. taxpayer aid to Israel recycled back through Israel's lawyers, lobbies and support groups to lobby Congress for more aid to Israel? Money being fungible, there's no way to know. But this vast sum, amounting to far more than that spent by the tobacco lobby, is less than two days worth of U.S. taxpayer aid to Israel. In short, the Israelis have money to corrupt Congress in their favor, and plenty to spare. History proves it's a remarkably profitable investment for the Israelis, so long as U.S. taxpayers don't catch on.

While Congress keeps aid to Israel "off the table" and a compliant U.S. mainstream media keeps the entire subject off the national agenda, it appears the Israelis have very little to worry about. According to Israeli media, their per capita income now is very close to that of the United States, and may soon surpass American per capita income.

At that time will Israel start an aid program for Americans? Don't bet on it. To date Israel has never repaid a U.S. government loan. All eventually are forgiven by Congress. When, after 10 years, the first repayments are due on the $2 billion borrowed annually by the Israeli government on the strength of U.S. loan guarantees, what will happen?

Israel's American apologists say, "don't worry, Israel has never defaulted on a U.S. government loan," not mentioning why. In fact no one in Israel expects ever to repay any of that money so long as the mainstream U.S. media keep their part of the bargain—which is to hear no evil, see no evil and speak no evil about Israel, and its staggering cost to American taxpayers.

Richard H. Curtiss is the executive editor of the Washington Report.