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Saturday, October 1, 2016

Memorandum on the New 10-Year $38 billion U.S. Aid Package to Israel

[Source] Starting in 2019, the U.S. will give Israel $38 billion over the next 10 years – $3.8 billion per year, which is $10.41 million per day.

This is in line with previous years. Last year the U.S. gave Israel $3.7 billion – about $10.14 per day. In other words, the new aid package amounts to an increase of around $27 million per year.

Israel has long received more U.S. money than any other country. Some earlier disbursements were even larger when considered in today’s dollars.

This aid to Israel amounts to more than half of all direct military aid the United States provides worldwide.

The new agreement will slowly phase out a unique Israeli privilege: Israel’s exception to the requirement that all U.S. military aid be used on American goods and services (40% of military aid to Israel is currently exempted). This special exemption is supposed to end by the seventh year.

It is expected that Israel and Israeli companies will work to get around this potential loss of revenue in a number of ways:
  • forming “partnerships” with American companies;
  • increasing the practice of requiring that some of the systems Israel purchases from American companies include Israeli-made components;
  • increasing the amount of materiel and other goods in general that the U.S. purchases from Israel, already far from negligible.

Under the agreement Israel promises not to not ask for additional money; however, this promise includes loopholes:

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