US Aid to Israel: Impact on America

Buying Power of $30 Billion

What’s the impact of giving Israel more than $3 billion every year for 10 years on the average American? What could that money buy here at home?

  • Saved Detroit from bankruptcy: In July 2013, the city of Detroit’s deficit was $380 million, a drop in a $3 billion bucket. Even the city’s $18 million short- and long-term debt is less than our cumulative $30 billion payout to Israel.
  • Supply homes to working families: $30 billon would build more than 40,000 new homes for working families in the Washington DC area. (US Campaign to End the Israeli Occupation)
  • Provide job training: $30 billion could train nearly 5 million Americans in green job technology. (US Campaign to End the Israeli Occupation)
  • Save school programs. Just one-third of this year’s payout to Israel – or $1 billion – would balance the education budget for two years for the entire state of Kansas, according to Topeka-Capital Journal. Or, just a fraction -- $304 million – could have been used to rehire the nearly 4,000 Philadelphia School District staff members that were laid off in 2013. (Non Profit Quarterly, October 2013)
  • Allow more students to go to college: Again, roughly a third of our annual payout to Israel – or $1.4 billion – would make up the projected budget shortfall in the federal Pell Grant loan program in 2015. (Inside Higher Education, Feb. 7, 2013)

Israel has been and continues to be the largest recipient of US foreign aid since World War II. To date, The American taxpayers have provided Israel $118 billion (in non-inflation adjusted dollars.)

In addition to Foreign Military Financing, Israel receives loan guarantees, refugee resettlement aid, Department of Defense grants, and free or reduced cost weaponry and arms.

In 2007, the US agreed to a 10-year, $30 billion military aid package for Israel, running from FY2009-FY2018.

In 2013, Israel received $3.1 billion in Foreign Military Financing, plus hundreds of millions of dollars for various missile defense systems. For FY2014, the Obama administration has requested $3.1 billion in FMF, $15 million in migration and refugee assistance (to help Jews from around the world migrate and become citizens of Israel), $220 million from the US Department of Defense, plus hundreds of millions for the Iron Dome Missile Defense System and other defense programs.

The total aid package to Israel, excluding loan guarantees and free and reduced cost weaponry, comes to $3.5 billion in 2014.


US foreign aid to Israel is controversial because Israel receives perks and benefits not available to other recipients of US foreign aid. For instance, it receives its pay-out in one lump sum at the beginning of the fiscal year and then uses the interest accrued on that amount to pay down its non-guaranteed debt to US agencies, which amounted to $455 million in 2013. All other foreign aid recipients receive their payments in increments throughout the year.

Israel frequently violates the US Arms Export Act and the 1952 Mutual Defense Agreement by using American taxpayers’ money to purchase arms that are used for purposes other than “legitimate self-defense,” according to a Congressional Research Services report. In other words, using US-made armaments or those purchased with American money for massive operations against the Palestinian people, such as the 2008/2009 assault on Gaza that killed more than 1,400 Palestinians, including at least 355 children, is illegal under American law.

US money has helped Israel to become a powerhouse weapons manufacturer and exporter; which has helped it to establish a thriving and growing economy. In 2010, Israel was admitted to the Organizations for Economic Cooperation and Development, an organization that accepts members only from developed countries. Because of this, a 2011 internal report by the US State Department’s Office of Inspector General recommended loan guarantees to Israel be terminated.

“Planning should begin now for [the program’s] orderly termination. … Israel has been admitted to the Organization for Economic Cooperation and Development, an indication that it is now a modern, self-sufficient economy capable of supporting its citizens as an industrialized country,” the report said, according to a July 28, 2011 Haaretz article.

Despite this, an Israel-friendly Congress granted a three-year extension of loan guarantees in 2012.

Sequestration and American Austerity Programs

Due To Congress’ inability to pass a budget in FY2013, sequestration – or automatic budget cuts – kicked in in March 2013.

Cuts were across the board, although some programs were exempted.

Affected programs included:

  • Head Start – 57,000 children were kicked out of the preschool program.
  • Public housing subsidies.
  • Veterans’ benefits.
  • Special education. (Washington Post, March 1, 2013)

Though Israel stood to lose $155 million in FMF, it actually received more money last year because President Obama asked for and Congress approved a $200 million-increase to the Iron Dome Missile Defense program, according to Israeli media.

Sequestration will continue through 2021, but beginning this year, Israel may be exempted for future cuts, according to the Congressional Research Service.

More information:

US Foreign Aid to Israel, Congressional Research Service, April 11, 2013
US Campaign to End the Israeli Occupation

AMP 03/2014