U.S. Aid to Israel Now Exceeds $90 Billion

By Richard H. Curtiss

For many years the American media reported that “Israel receives $1.2 billion in economic aid,” or that “Israel receives $1.8 billion in military aid.” But the two figures were seldom combined to give the true total of at least $3 billion in U.S. foreign aid to Israel every year.

Most Americans have caught on to that media deception by now. But starting this summer, as Congress puts together a new budget for fiscal year 2000 (which begins Oct. 1, 1999), taxpayers who ask their congressional representatives what they are doing about aid to Israel are going to hear a new mantra: “We’re cutting it.” They may even hear that “We’re reducing Israel’s economic aid every year for 10 years until it’s phased out entirely.”

That is true. Israel is slated to take an annual $120 million cut in economic aid in FY 2000 and every year thereafter for nine years until there is no more foreign economic aid for Israel.

Starting at the same time, however, U.S. military aid to Israel is slated to increase every year by $60 million. So in 10 years U.S. military aid to Israel will increase to a total of $2.4 billion annually, which does not count extras from the Pentagon’s budget.

Therefore the scheduled reduction of total annual foreign aid to Israel is only $60 million annually, a decrease of 2 percent per year. In 10 years the total reduction in Israel’s foreign aid will be only 20 percent.

That will leave Israel, with a population smaller than Hong Kong’s, as still the largest recipient of U.S. foreign aid, by far. It receives more than a third of U.S. bilateral foreign aid. And when U.S. foreign aid to Israel, and to Egypt for keeping the peace with Israel, are combined, they are more than half of total bilateral U.S. foreign aid world-wide.

Other U.S. foreign aid recipients all are developing nations which either make their military bases available to the U.S., are key members of international alliances in which the U.S. participates, or have recently suffered some crippling blow of nature such as earthquakes, floods or droughts.

Israel does not fit those criteria. Its 1997 per capita gross national product is $16,180. That puts it on a par with Ireland and well above Spain. Other than Israel, for many years no country with a comparable per capita GNP has received American foreign aid.

In fact, from 1949 through 1997, the total of U.S. aid to all of the countries of sub-Saharan Africa and Latin America and the Caribbean combined was $64,127,500,000—considerably less than the $71,077,600,000 Israel received in the same 1949 through 1997 time period. According to the Population Reference Bureau of Washington, DC, in mid-1999 the sub-Saharan and Latin American and Caribbean countries have a combined population of 1.142 billion people, while Israel’s mid-1999 population is 6.1 million people.

Over the next three years Israel’s direct foreign aid total increased to $80,097,600,000. But that’s not the whole story. In fiscal years 1993, 1996 and 1997 reporters for the Washington Report on Middle East Affairs found extra items for Israel buried in the budgets of the Pentagon and other federal agencies that increased annual U.S. aid to Israel by an average of 12.2 percent. It is conservative to assume that such a 12.2 percent hidden increase has prevailed over all of the years Israel has received U.S. foreign aid, adding $9,771,907,000 to the total.

And that’s not all. Israel receives its annual foreign aid appropriation during the first month of each fiscal year, instead of in quarterly installments as do other foreign aid recipients. That has enabled Israel to earn another $1.947 billion in interest from advance payments.

Therefore, as of Oct. 31, 1999 the Israeli government will have received $91,816,507,200 in U.S. aid from fiscal year 1949 through fiscal year 2000. That’s the number you should write down. It does not include an additional $10 billion in loan guarantees collected by Israel, since the ultimate cost to the U.S. of those loan guarantees to Israel cannot be estimated.

That’s a cumulative total of $15,051.98 in U.S. taxpayer assistance for every man, woman and child in Israel, still not counting the loan guarantees.

Generous as it is, that’s considerably less than the actual cost to U.S. taxpayers. Since until very recently the U.S. ran an annual national budget deficit, every dollar of aid the U.S. gives Israel has had to be raised through U.S. government borrowing. It would be educational to calculate what the U.S. has paid in interest over the past 50 years on the more than $91 billion it borrowed to give to Israel. Undoubtedly it would show that by now the cost to U.S. taxpayers has been well over double the actual amount received by the government of Israel.

There are many other costs of Israel to U.S. taxpayers. They include most or all of the nearly $50 billion in U.S. foreign aid provided to Egypt since it made peace with Israel in 1979. Ever since then, Egypt has received two-thirds of whatever amount the U.S. gives Israel each year.

Costs of Israel also include deductions from their U.S. income taxes by American Jewish and other friends of Israel who donate about one billion dollars annually to tax-exempt U.S. organizations which pass these donations on to affiliated Israeli groups.

There also have been immense political, military and commercial costs to the U.S. for consistently supporting Israel in all of its disputes with the Palestinians and all of its Arab neighbors. Because Congress has never tied U.S. aid to Israel to Israeli performance at the peace table, this immense outlay by U.S. taxpayers actually hinders the peace process by encouraging Israeli intransigence.

Direct U.S. taxpayer aid to Israel now amounts to $75,260 for every Israeli family of five. It would be interesting to know how many American families of five have received as much help from the U.S. government as do the families of everyone who chooses to become a citizen of Israel.

Richard H. Curtiss is the executive editor of the Washington Report on Middle East Affairs.

SIDEBAR

Benefits to Israel of U.S. Aid Since 1949

(As of Oct. 31, 1999)

Foreign Aid Grants and Loans $80,097,600,000

Other U.S. Aid (12.2 % of Foreign Aid) 9,771,907,000

Interest to Israel from Advanced Pymts. 1,947,000,000

Grand Total $91,816,507,200

Total Benefits per Israeli $15,052