Washington Report on Middle East Affairs, November 2008, pages 10-11

Congress Watch

A Conservative Estimate of Total Direct U.S. Aid to Israel: Almost $114 Billion

By Shirl McArthur

As with previous Washington Report estimates of U.S. aid to Israel, this analysis is based on the annual CRS report, U.S. Foreign Aid to Israel, which uses available and verifiable numbers, primarily from the foreign operations appropriations bills. Although the CRS report does include such things as the old food for peace program, the $1.2 billion from the Wye agreement, the $1 billion in FMF included in the FY ’03 Emergency Supplemental appropriations bill, the subsidy for “refugee resettlement,” and money from the ASHA account, it does not include money from the DOD and other agencies. Nor does it include estimated interest on the early disbursement of aid.

The January 2008 CRS report on aid to Israel shows a total of $101.1908 billion through FY ’07. Table 1, on the previous page, is drawn from the summary table of that report, plus $2.4238 billion from the FY ’08 omnibus appropriations bill and estimates for ASHA and “other” amounts in FY ’08, for a total of $103.6147 billion through FY ’08.

To that has been added $10.2407 billion, as detailed below, for a grand total of $113.8554 billion.

Estimated Amounts Not Included in Table 1: $10.2407 Billion

Defense Department Funds: $7.694 Billion. For previous estimates, a search going back several years was able to identify $6.794 billion from the DOD to Israel through FY ”˜06. Adding $450 million from the FY ’07 DOD appropriations and $450 million from the ’08 appropriations gives a total of $7.694 billion. (The FY ’08 appropriations bill earmarks $155.6 million for Israel. However, AIPAC’s Web site reported that the total for earmarked and non-earmarked programs was $450 million—and who would know better than the Israel lobby itself?)

The military aid from the DOD budget is mostly for specific projects. The largest items have been the canceled Lavi attack fighter project, the completed Merkava tank, the ongoing Arrow anti-missile missile project, and several other anti-missile systems, most recently the “David’s Sling” short-range missile defense system. Haaretz reported in June that a senior U.S. defense official has said the U.S. will support and help Israel’s development of the advanced Arrow 3 designed to intercept advanced ballistic missiles. The fact that the U.S. military was not interested in the Lavi or the Merkava for its own use and has said the same thing about the Arrow and the other anti-missile projects would seem to jettison the argument that these are “joint defense projects.” The FY ”˜01 appropriations bill also gave Israel a grant of $700 million worth of military equipment, to be drawn down from stocks in Western Europe, and the FY ’05 defense appropriations bill includes a provision authorizing the DOD to transfer an unspecified amount of “surplus” military items from inventory to Israel. In addition, since 1988 Israel has been designated a “major non-NATO ally,” giving it access to U.S. weapons systems at lower prices, and preferential treatment in bidding for U.S. defense contracts.

Interest: $2.089 Billion. Israel receives its U.S. economic and military aid in a lump sum within one month of the new fiscal year or the passage of the appropriations act. Applying one-half of the prevailing interest rate to the aid for each year (on the assumption that the aid monies are drawn down over the course of the year), the July 2006 estimate arrived at a total of $1.991 billion through FY ’06. To that, using an interest rate of 4 percent, is added $50 million for FY ’07 and $48 million for FY ’08, for a cumulative total of $2.089 billion through FY ’08.

Other Grants and Endowments: $457.7 Million. The July 2006 report included $456.7 million in U.S. grants and endowments to U.S.-Israeli scientific and business cooperation organizations. The two largest are the BIRD (Israel-U.S. Binational Research & Development) Foundation and the BARD (Binational Agriculture and Research and Development) Fund. While these are mostly self-sustaining, the BARD Fund gets about $500,000 a year from the Agriculture Department. Adding $0.5 million for each of FY ’07 and ”˜08 to the ’06 total gives a new total of $0.457.7 billion.

For the convenience of those who wish to look up more details, citations for the foreign aid and DOD appropriations bills for the past five years are given in Table 2 above.

Shirl McArthur, a retired U.S. foreign service officer, is a consultant based in the Washington, DC area.