The Strategic Functions of U.S. Aid to Israel

The United States aid relationship with Israel is unlike any other in the world, or indeed, like any in history. In sheer volume, the amount of aid is the most generous foreign aid program ever between any two countries, totaling $77.726 billion through fiscal year 1996.Foot note 2_1 No country has ever received as much Congressionally-mandated aid as has Israel, including South Vietnam. Indeed, Israel receives more U.S. aid per capita annually than the total annual GNP per capita of several Arab states, including Egypt, Mauritania, Sudan, Yemen and Morocco.Foot note 2_2 What is perhaps even more unusual is that Israel, like its benefactor, is an advanced, industrialized, technologically-sophisticated country, as well as a major arms exporter.

This paper examines the nature and extent of U.S. foreign aid to Israel, the strategic roots of such a policy, how the relationship has been affected by the changing world order, the aid policy of the Clinton Administration, its military component, its impact on Israel, the debate within both Israel and the United States, and the impact of aid on the Middle East peace process.

The Nature of U.S. Aid

U.S. aid to Israel began in the early 1950s with small grants and expanded modestly over the next decade to include Export-Import Bank loans, Food for Peace aid and general economic loans. Military loans began only after the 1967. These were replaced by grants exclusively in 1985. U.S. economic aid increased greatly in subsequent years and grants replaced loans for economic assistance in 1981. In recent years, the annual U.S. subsidy for Israel has remained at approximately $3 billion in military and economic grants, in addition to more than $500 million from other parts of the budget or off-budget.Foot note 2_3 Unlike most U.S. recipients of economic aid, which are required to use the bulk of the money for specific projects, such as buying certain U.S. agricultural surpluses or finished goods, most U.S. aid to Israel goes directly into the government’s treasury to use as they will. In every other country, officials of the U.S. Agency for International Development officials oversee the actual programs, either administered directly, through non-governmental organizations, or under co-sponsorship with a government agency. Since 1971, however, Israel has been the exception: the U.S. government sets the funding level and these become simply cash transfers to the Israeli government.Foot note 2_4
Since 1992, the U.S. has loaned Israel an additional $2 billion annually. Congressional researchers have disclosed that between 1974 and 1989, $16.4 billion in U.S. military loans were converted to grants and that this was the understanding from the beginning. Indeed, all past U.S. loans to Israel have eventually been forgiven by Congress, which has undoubtedly helped Israel’s often-touted claim that they have never defaulted on a U.S. government loan. U.S. policy since 1984 has been that economic assistance to Israel must equal or exceed Israel’s annual debt repayment to the United States.

Unlike other countries, which receive aid in quarterly installments, aid to Israel since 1982 has been given in a lump sum at the beginning of the fiscal year, leaving the U.S. government to borrow from future revenues. Israel even lends some of this money back through U.S. treasury bills and collects the additional interest. This special arrangement costs the U.S. government approximately $50 million each year.Foot note 2_5

In addition, there is the more than $1.5 billion in private U.S. funds which go to Israel annually, in the form of $1 billion in private tax deductible donations and $500 million in Israeli bonds.Foot note 2_6 The ability of Americans to make what amounts to tax-deductible contributions to a foreign government, made possible through a number of Jewish charities, does not exist with any other country. Nor do these figures include short and long-term commercial loans from U.S. banks, which have been as high as $1 billion annually in recent years.Foot note 2_7

The total U.S. aid to Israel is approximately one-third of the foreign aid budget, even though Israel consists of just .001% of the world’s population, and already has one of the world’s higher per capita incomes. Indeed, Israel’s GNP is higher than the combined GNP of Egypt, Lebanon, Syria, Jordan, the West Bank and Gaza. With a per capita income about $14,000, Israel ranks as the sixteenth wealthiest country in the world; Israelis enjoy a higher per capita than oil-rich Saudi Arabia and are only slightly less well-off than most Western European countries. AID does not even carry the pretense that economic aid to Israel is development assistance, instead utilizing the term «economic support funding.»Foot note 2_8 Given Israel’s relative prosperity, U.S. aid to Israel is becoming increasingly controversial. Indeed, as Yossi Bellen, deputy foreign minister of Israel and a Knesset member, told the Women’s International Zionist organization in 1994, «If our economic situation is better than in many of your countries, how can we go on asking for your charity?»Foot note 2_9

The Roots of U.S. Aid Policy

The U.S. commitment to Israel has often been articulated by American officials in moral terms, even presenting the issue as a case of a democracy battling for its very survival. Yet, were this actually the primary motivation for the U.S. aid program, U.S. aid to Israel would have been highest in the early years of the existence of the Jewish state, when its democratic institutions were strongest and its strategic situation most vulnerable, and would have declined as its military power grew dramatically and its repression against Palestinians in the occupied territories increased. Instead, the trend has been in just the opposite direction: major U.S. military and economic aid did not begin until after the 1967 War. Indeed, 99% of U.S. military assistance to Israel since its establishment came only after Israel proved itself to be far stronger than any combination of Arab armies and after Israeli occupation forces became the rulers of a large Palestinian population.
In the hypothetical event that all U.S. aid to Israel were immediately cut off, it would be many years before Israel would be under significantly greater military threat than it is today. Israel has both a major domestic arms industry and an existing military force far more capable and powerful than any conceivable combination of opposing forces. While a cutoff of economic support may force Israel to negotiate a settlement with the Palestinians which would end the expensive patchwork of Israeli control and subsidization of settlements, thereby increasing the likelihood of Palestinian statehood alongside Israel, there would be no question of Israel’s survival being at risk militarily in the foreseeable future.

One of the most fundamental principles in the theory of international relations is that the most stable military relationship between adversaries (besides disarmament) is strategic parity. Such a relationship provides an effective deterrent for both sides against the other launching a pre-emptive attack. If the United States was concerned simply with Israel’s security, the U.S. would be dedicated to maintaining Israeli defenses to the point where they would be approximately equal to any combination of Arab armed forces. Instead, leaders of both American political parties have called not for the U.S. to help maintain a military balance between Israel and its neighbors, but for insuring qualitative Israeli military superiority.Foot note 2_10 When Israel was less dominant militarily, there was no such consensus for U.S. backing of Israel. The continued high levels of U.S. aid to Israel does not likely come out of concern for Israel’s survival. One explanation may come from a desire for Israel to continue its political dominion of the Palestinians and its military dominance of the region.

Indeed, the primary reason for the direction of U.S. policy is the role Israel plays for the United States. Israel has successfully prevented victories by radical nationalist movements in Lebanon, Jordan, and Yemen, as well as in Palestine. They have kept Syria, for many years an ally of the Soviet Union, in check. Their air force is predominant throughout the region. Israel’s frequent wars have provided battlefield testing for American arms, often against Soviet weapons. They have been a conduit for U.S. arms to regimes and movements too unpopular in the United States for openly granting direct military assistance, such as South Africa, Iran, Guatemala, and the Nicaraguan Contras. Israeli military advisors have assisted the Contras, the Salvadoran junta, and other movements and governments backed by the United States. The Mossad has cooperated with the CIA and other U.S. intelligence services in intelligence gathering and covert operations. Israel has missiles capable of reaching the former Soviet Union and has cooperated with the U.S. military-industrial complex with research and development for new jet fighters, anti-missile defense systems, and even the Strategic Defense Initiative, a relationship which is expected to continue.Foot note 2_11 As one Israeli analyst described it during the Iran-Contra scandal, «It’s like Israel has become just another federal agency, one that’s convenient to use when you want something done quietly.»Foot note 2_12

The pattern of U.S. aid to Israel is revealing. Immediately following Israel’s spectacular victory in the 1967 war, when it demonstrated its military superiority in the region, U.S. aid shot up by 450%. Part of this increase, according to the New York Times, was apparently related to Israel’s willingness to provide the U.S. with examples of new Soviet weapons captured during the war.Foot note 2_13 Following the 1970-71 civil war in Jordan, when Israel’s potential to curb revolutionary movements outside its borders became apparent, aid increased another sevenfold. After attacking Arab armies in the 1973 War were successfully countered by the largest U.S. airlift in history, with Israel demonstrating its power to defeat surprisingly strong Soviet-supplied forces, military aid increased by another 800%. These increases paralleled the British decision to withdraw its forces from «east of the Suez,» which also led to the massive arms sales and logistical cooperation with the Shah’s Iran, a key component of the Nixon Doctrine.Foot note 2_14

Aid quadrupled again in 1979 soon after the fall of the Shah, the election of the right-wing Likud government, and the ratification of the Camp David Treaty. Aid increased yet again soon after the 1982 Israeli invasion of Lebanon. In 1983 and 1984, when the United States and Israel signed memoranda of understanding on strategic cooperation and military planning and conducted their first joint naval and air military exercises, Israel was rewarded by an additional $1.5 billion in economic aid, as well as another half million dollars for the development of a new jet fighter.Foot note 2_15 During and immediately after the Gulf War, U.S. aid increased an additional $650 million.Foot note 2_16

The correlation is clear: the stronger, more aggressive, and more willing to cooperate with U.S. interests that Israel becomes, the higher the level of aid.

Policy Debates

In reality, the history of unconditional U.S. aid to Israel is not that unfamiliar: they are a result of the same kind of thinking that has guided U.S. policy elsewhere. As Ron Young, in his study Missed Opportunities for Peace, observes, the same world view — an emphasis on military solutions to political problems, the underestimation of the power of popular movements, the tendency to take an exaggerated East-West perspective, and the insistence on unilateral initiatives — has dominated U.S. policy towards Israel and the Middle East as well.Foot note 2_17 The perception of Middle East exceptionalism in U.S. foreign policy has made the widespread dissemination and discussion of critiques of that policy even more difficult than on other issues.
Traditionally, there has been a division among foreign policy elites regarding the wisdom of such large scale and unconditional support for the Israeli government. One group, often referred to as the «State Department Arabists,» believed that the Arab world has much more to offer the United States strategically and economically than does Israel. Support of a militant Israel, they argued, could lead to strong anti-American sentiment in the Arab world and increasing instability in the region. The other faction, which has traditionally been dominant, is that Israel is sufficiently strong militarily to play a stabilizing role. Furthermore, whatever the resentment from the Arab masses, there is little political pluralism in the Arab world to worry about, and most Arab leaders — due to their investment of petrodollars in the West, recognition of Western military power, or general conservatism — can forgive the U.S. for its support of Israel. By blaming the «Jewish lobby» for Washington’s hostile position towards the Arab world rather than American leaders, they can absolve the U.S. government of its responsibility. Indeed, since Israel is a status quo power whose interests often coincide with theirs, a strong Israel can actually be to their advantage, not just because it offers protection against radical challenges from within and from without, but it serves as a useful diversion for popular dissatisfaction with their own leadership.

During the first twenty years following Israel’s victory in the 1967 war, this latter tendency dominated U.S. foreign policy makers, particularly during the Reagan Administration. Indeed, most of the Arabists were purged or retired by the 1980’s. However, the intifada led to a slight shift in perceptions, as the inability of Israeli military might to curb popular resistance in the occupied territories and the dangerous precedent it set for possible insurrections against pro-Western Arab leaders, led to a re-evaluation of the role of the Israeli military as a stabilizing force. Combined with the end of the Cold War, which lessened the need for Israel as a major link in the «strategic consensus» against possible Soviet penetration in the Middle East, the Palestinian intifada resulted in the Bush Administration challenging Israeli policies to a degree unheard in Washington for more than a generation. These protests were in rhetoric only — unconditional military and economic aid to the Israeli government continued to flow — but it did indicate something of a more balanced policy.

In addition, the dramatic increase in military cooperation and arms transfers to the states of the Gulf Cooperation Council (GCC) during and after the Gulf War demonstrated that Israel was not the only country on which the United States relied to maintain its interests in the region. However, it soon became clear that the potentially unstable Gulf monarchies, still suspicious of U.S. intentions and lacking the advantages of Israel in terms of well-trained forces, technological sophistication, and ability to mobilize their human and material resources, could never be a substitute for the U.S. alliance with Israel.

Rather than being a liability, the Gulf War proved Israel once again to be a strategic asset: Israeli developments in air- to-ground warfare were integrated into allied bombing against Iraqi missile sites and other targets; Israeli-designed conformal fuel tanks for F-15 fighter-bombers greatly enhanced their range; the Israeli-provided mine plows were utilized during the final assaults on Iraqi positions; Israeli mobile bridges were used by U.S. Marines; Israeli targeting systems and low-altitude warning devises were utilized by American helicopters; and, Israel developed key components for the widely-used Tomahawk missiles. It served as yet another reminder of how Israel remains, in the eyes of American policy makers, an important strategic ally. Given that continued support of Israel — despite its ongoing, and indeed, worsening, repression of the Palestinians — did not interfere with an unprecedented degree of cooperation with Egypt and the Gulf monarchies or with rapprochement with Syria, showed few risks are involved with the U.S. continuing such an alliance.

With the weakening of the intifada, the triumph by the U.S. and its allied pro-western monarchies in the Gulf War, and the election of a more moderate — and thereby less provocative –government in Israel, the odds of major political instability resulting from unconditional support of Israel decreased. As a result, the U.S. felt more confident in throwing its unqualified backing of Israeli policies and increasing still further the level of aid, particularly when Bill Clinton assumed office in 1993.

Clinton and U.S. Aid

Under the Clinton Administration, the strategic relationship has strengthened still further. This comes in part because Israel’s role as a surrogate for U.S. strategic interests has never been limited to concerns over Soviet influence. As in many other parts of the Third World, the Cold War was more the excuse than the actual reasons for U.S. concerns over instability and challenges to U.S. economic and political hegemony. Indeed, radical nationalism and — more recently — extremist Islamic forces have been seen by American policy makers as at least as threatening to American interests in the region as was Communism, and Israeli support in challenging such perceived threats to American hegemony has always been, and will continue to be, quite welcome.
A somewhat revealing episode is in Clinton’s attitude towards the controversial $10 billion loan guarantee. During the 1992 campaign, Clinton attacked Bush from the right, criticizing his insistence that the loan guarantee be linked to curbing the Israeli settlements in the occupied territories or that it be withheld until after the Israeli elections in June, a position which many Israelis interpreted as an endorsement of the Likud. Feeling heat from Clinton, by this point the Democratic presidential nominee, Bush approved the loans in August, despite a lack of Israeli assurance that they would halt settlement activity. Though Clinton claimed that the loans would be used as housing for Jewish immigrants, none of the money was used for such purposes; indeed, Israel had thousands of unoccupied housing units, particularly in Beersheva, where most refugees were initially settled.Foot note 2_18 The Israeli government acknowledged that the loans were more of a cushion than anything vital to the economy.Foot note 2_19

Congress attached a provision which required that the president deduct the costs of additional settlement activity from the $2 billion annual installment of the loan. In October 1993, the U.S. officially announced to Israel that there would be a $437 million deduction in the next year’s loan due to settlement construction during the 1993 fiscal year. However, State Department Middle East peace talks coordinator Dennis Ross immediately let the Israeli government know that the U.S. would find a way to restore the full funding. Within a month, Clinton authorized Israel to draw an additional $500 million in U.S. military supplies from NATO warehouses in Europe. A similar scenario unfolded the following year: after deducting $311.8 million on settlements from 1995 loans, Clinton authorized $95.8 from redeploying troops from GazaFoot note 2_20 and $240 million to facilitate withdrawal from West Bank cities, based on the highly-controversial assertion that it cost more to withdraw troops than to maintain them in hostile urban areas.Foot note 2_21

Indeed, Clinton has explicitly promised the Israelis that aid would remain constant regardless of Israeli settlement policies.Foot note 2_22 What has resulted, then, is that the United States is now effectively subsidizing the settlements directly, since the Israelis know they will be compensated for every dollar (and more) that they contribute to maintaining their presence in the West Bank, despite the fact that all of those settlements are illegal, according to Article 49 of the Geneva Convention which bans occupying powers from transferring parts of their own civilian population into the territory taken by military force.

Indeed, United Nations Security Council resolution 446 — adopted unanimously with U.S. support — specifically requires Israel to withdraw from those settlements unconditionally, as well as resolution 465, which forbids any country from supporting Israel’s colonization drive. Using U.S. aid to undermine United Nations Security Council resolutions is in sharp contrast to the U.S. insistence that the international community maintain strict sanctions against Arab states, such as Iraq, Libya and Sudan, for their violations of other U.N. resolutions.

Republicans in Congress, despite their fiscal conservatism and opposition to most other forms of foreign, are similarly munificent regarding aid to Israel. House Speaker Newt Gingrich has been longstanding supporter of unconditional aid to Israel; indeed, his wife Marianne earns $2500 month plus commissions by a corporation to lobby U.S. companies to invest in Israel. Senate Foreign Relations Committee chairman Jesse Helms insists that cutting U.S. aid to Israel is «off the table» and Senate majority leader Bob Dole has also opposed any aid cutbacks.Foot note 2_23

Arms Transfers Continue

Contrary to many predictions, the end of the Cold War and the significant advances in the Middle East peace process has not lessened U.S. military and economic aid to Israel. U.S. aid to Israel is higher now than twenty years ago, when Egypt’s massive and well-equipped armed forces threatened war, when Syria’s military was expanding rapidly with advanced Soviet weaponry, when armed factions of the PLO were launching terrorists attacks into Israel, when Jordan still claimed the West Bank and stationed large numbers of troops along its lengthy border and demarcation line with Israel, and when Iraq was embarking upon vast program of militarization. Now, with a longstanding peace treaty with Egypt and a large demilitarized and internationally-monitored buffer zone, with ongoing peace talks with a gradually demilitarizing Syria weakened by the collapse of its Soviet patron, with the PLO cooperating closely with Israeli security, with Jordan signing a peace treaty with full normalized relations and Iraq’s armed forces devastated during the Gulf War and under strict international sanctions and subsequent monitoring, why do such high levels of aid continue?
Noteworthy is the often-repeated insistence by the Clinton Administration and leaders of both American political parties that aid to Israel should be «kept at current levels.» If the real interest was in providing adequate support for Israeli defense, these officials would instead be referring to «maintaining adequate aid to maintain Israel’s security needs,» which presumably would be declining as the peace process moves forward. However, Israel’s actual defense needs are not the issue.

Matti Peled, the late Israeli major general and Knesset member, reported that as far as he can tell, the $1.8 billion figure for annual military support was arrived at «out of thin air.»Foot note 2_24 Such a figure is far more than Israel needs to replenish stocks, is not apparently related directly to any specific security requirements, and has remained relatively constant in recent years, thereby reenforcing the impression that it is little more than a U.S. government subsidy for American arms manufacturers. This benefit to American defense contractors is multiplied by the fact that every major arms transfer to Israel creates a new demand by Arab states — most of which can pay hard currency through petrodollars — for additional American weapons to challenge Israel. Indeed, Israel announced its acceptance of a Middle Eastern arms freeze in 1991, but the United States effectively blocked it.

In 1993, when 78 Senators wrote President Clinton insisting that aid to Israel be continued at the current levels, they justified it on the grounds of massive arms procurement by Arabs states, neglecting to note that 80% of those arms transfers were of U.S. origin. Were they really concerned about Israeli security, they would have voted to block these arms transfers to the Gulf monarchies. Yet this was clearly not their purpose. Even Israel did not actively oppose the sale of 72 highly-sophisticated F-15E jet fighters to Saudi Arabia in 1992, since the Bush Administration offered yet another increase in U.S. arms transfers to Israel in return for Israeli acquiescence.Foot note 2_25

In many respects, U.S. aid policy serves the interests of both well. Israel, Saudi Arabia, and the United States all share an interest in curbing radical nationalism and preserving the regional status quo — if deemed necessary, by military force.

In addition, for the Israelis, Arab militarism serves as an excuse for continued repression in the occupied territories and resistance to demands for territorial compromise. For autocratic Arab leaders, Israeli military power serves as an excuse for their lack of internal democracy and inability to address badly needed social and economic reforms. It is noteworthy that for many years up until 1993, U.S. was sending billions of dollars to Gulf states, which took a harder line towards Israel than the PLO, while at the same time refusing to even talk with the Palestinians.

The resulting arms race has been a bonanza for U.S. arms manufacturers, which may actually be a major explanation for U.S. aid policy. For while the pro-Israel political action committees (PACs) certainly wield substantial clout with their contributions to Congressional candidates supportive of large-scale military and economic aid to Israel, the Aerospace Industry Association –which promotes massive arms transfers to the Middle East and elsewhere — is even more influential, contributing more than $7.4 million in each of the most recent two election cycles,Foot note 2_26 and provides the additional inducement of creating jobs and bringing federal dollars into key states and Congressional districts. Indeed, the Clinton Administration has showed no qualms about continued aid to Morocco, despite its ongoing occupation of Western Sahara, and to Indonesia, despite its continuing occupation of East Timor. Like Israel, these U.S. allies, all serious human rights violators, continue to occupy neighboring states in defiance of U.N. Security Council resolutions, yet the Clinton Administration — like its predecessors — has rejected linking aid to these countries for their compliance with international norms, even without the support of a strong domestic lobby.

Impact of Aid to Israel

The large amounts of U.S. aid to the Israeli government has not been as beneficial to Israel as many would suspect. Most of the economic assistance has gone primarily to finance non-productive sectors, such as the settlements in the occupied territories and the military, as well as to finance loan repayments to American banks. Indeed, each fiscal year since 1974, approximately $1 billion of Israel’s $1.2 billion in Economic Support Funds has been used to cover the interest and principle due from previous U.S. loans, which were borrowed primarily to finance arms purchases from the U.S.Foot note 2_27 In addition, the $1.8 billion in annual military aid is in fact simply a credit line to American arms manufacturers, and actually ends up costing Israel two to three times that amount to train operators, to staff and maintain, to procure spare parts, and other related costs.Foot note 2_28 The overall impact is to increase Israeli economic and military dependency on the United States and to drain Israel’s fragile economy,Foot note 2_29 taking money away from Israel’s once-generous social welfare system.
Ezra Sohar has observed how, unlike borrowing money to build a factory, borrowing money for armaments does not produce profits or create the ripple effect or ancillary industries that strengthens the overall economy.Foot note 2_30 Until the 1967 War, when Israeli military spending averaged a little over 8% of the GNP, Israel’s annual growth rate posted a healthy 9%. When military spending dramatically escalated with an enormous increase in procurement of U.S. weapons, at times reaching as much as 35% of GNP, the economy faltered. Currently, military spending is slightly under 20% of the GNP, and the economy is still struggling.Foot note 2_31

Some critics from the right, particularly those calling for a liberalization of the Israeli economy, have started calling for the reduction or elimination of economic aid. Arnon Gafny, the former governor of the Bank of Israel, argues that U.S. aid had impaired the country’s long-term competitiveness. Similarly, Moshe Syrquin of Bar-Ilan University notes how the Israeli economy went downhill with the dramatic upsurge of U.S. aid in the early 1970s.Foot note 2_32 Even the selling of Israeli bonds in now questioned: According to Joel Bainerman, editor of Tel Aviv Business, argues that instead of the old slogan «Investing in Israel’s Future, it should be «building a bigger debt for Israel.» Including interest, the Israeli government currently owes bondholders $6 billion; interest rates are well above similar bonds in U.S. As a result, less bonds are purchased by committed Zionists and increasing amounts are bought up by international banks, financial institutions, pension funds, and state and local government agencies in U.S.Foot note 2_33

Says Bainerman, «The end of foreign aid would not only improve the chances of reforming Israel’s over-centralized economy, in which subsidies play an important part, but increase the chances for political reform as well.»Foot note 2_34 In the United States, such sentiment is not only echoed among traditional conservative critics of Israel, but even the staunchly pro-Israeli New Republic has cited how US aid has «retarded free enterprise by supporting subsidies and monopolies for favored constituencies.»Foot note 2_35

Some left-wing Israelis argue just the opposite: that the United States is using its aid weapon to pressure the Israeli government to weaken the Histradut (Israel’s powerful trade union federation), privatize state-controlled enterprises, cut social services, and lower taxes.Foot note 2_36 Such economic restructuring has been a requirement for U.S.-backed loans to a number of countries as a means of creating a more favorable climate for U.S. investment, so it should not be surprising that Israel should be held to such standards as well. Indeed, State Department officials admit that U.S. aid is used as a leverage to encourage greater privatization and that the U.S. officials routinely give advice on long-term macro-economic planning.Foot note 2_37 However, given that AID support goes directly into the Israeli treasury with few restrictions, it is unclear just how this pressure is applied.

Yet the dissent from the left regarding U.S. aid goes far deeper. First of all, the failure of the United States to use aid as leverage is seen as effectively sabotaging the efforts of peace activists in Israel to change Israeli policy, which Peled referred to as pushing Israel «toward a posture of calloused intransigence.»Foot note 2_38 In the Israeli press, one can find comments like those in Yediot Ahronot which describes their country as «the Godfather’s messenger,» since Israel undertakes the «dirty work» of the Godfather, who «always tries to appear to be the owner of some large respectable business.»Foot note 2_39 Israeli satirist B. Michael describes U.S. aid to Israel as a situation where «My master gives me food to eat and I bite those whom he tells me to bite. It’s called strategic cooperation.»Foot note 2_40 Indeed, Israel’s dependency on the U.S. violates the principle of non-alignment, once a cornerstone of the Labor Zionist movement. A number of Israelis and other left-wing Zionists argue that, like any other nationalist movement, Zionism has its pluralist, democratic and inclusivist elements alongside reactionary, chauvinistic and militarist elements. The primary reason the latter has dominated, they argue, is not anything inherent within Zionism per se, but the blank check offered by the U.S., which encourages Israeli oppression of its Middle Eastern neighbors and close ties with the West, undermining the last vestiges of Labor Zionism’s commitment to socialism, non-alignment, and cooperation with the Third World.Foot note 2_41 As former Secretary of State Henry Kissinger put it, «Israel’s obstinacy … serves the purposes of both our countries best.»Foot note 2_42 The rise of the Likud Bloc in Israel from an minority faction to the dominant party for over sixteen years, as well as the rightward drift of the Labor Party, is in large part due to this large-scale American support. No country with those kinds of policies could last very long in office, given the self-defeating effect of such militarization on economic grounds or in terms of international isolation, were they not supported to such a degree that they did not have to worry about the consequences of their policies on their own population.

These left-wing critics fear that Israel’s dependency on what is seen by many as an imperialist power like the United States alienates Israel’s potential allies in the Third World and leaves Israel vulnerable to the whims of U.S. foreign policy. Indeed, some go as far as to argue Israel is being set up to be the scape goat for U.S. policy in the region, much like the Jews of Europe were set up as tax collectors, money lenders and other positions which left them open to popular reaction.Foot note 2_43

Dissent in the U.S.

U.S. aid to Israel, like most foreign aid, is not popular with the American public. According to a 1994 poll by the Wirthlin Group, a majority favored a phase out of aid to Israel by 1998. In another question, one-third of those polled called for an immediate phase out, a slightly larger amount called for a reduction and only 18% at current levels.Foot note 2_44 Foreign aid is generally unpopular among the American public, particularly from conservatives who are suspicious of internationalism in general and advocate a more isolationist foreign policy. Yet it has traditionally been the American left which has raised these issues and forced them into the national debate, most prominently with Central America, but in other Third World regions as well.
However, the American left, even among those concerned with issues of peace and justice in the Middle East, are divided over the question of aid. Historically, countries which invade and occupy the territory of its neighbors, engage in systematic human rights violations, refuse to recognize the national rights of a people that it exiles and continually subjugates, use American weapons against civilian targets, arm and train death squads, ignore United Nations resolutions, and systematically flaunt international legal conventions are subject to mobilization by American peace activists challenging U.S. aid.

Yet, just as with the tendency by some on the right to single out Israel for criticism, there is a tendency on the left to single out Israel for immunity from criticism. One problem with this is that the failure of peace and human rights activists to more aggressivley challenge assistance to the Israeli government on grounds of human rights, international law, and Israel’s own self-interest, results in some of the more prominent groups and individuals challenging U.S. aid to Israel being those who do not take principled positions on U.S foreign aid or arms transfers to Arab regimes with human records as bad or worse than Israel’s. Such double-standards leave such groups open to charges of anti-Semitism, which is not helped by their occasional appeals to nativistic sentiments that indeed sometimes contain anti-Semitic overtones.

One result of the lack of challenges to the continuation of high levels of unconditional aid to Israel is that it hampers Congressional efforts to curb U.S. military aid to repressive regimes elsewhere. Efforts to pass legislation that would restrict aid systematically to countries which refuse to sign the Nuclear Non-Proliferation Treaty or engage in certain violations of international law have been blocked solely because the provisions of the bill would include Israel.

It is doubtful that Israel could afford the heavy economic burden of continuing their occupation of neighboring Arab lands, such as the costs of maintaining the military forces in the territories, the construction of illegal settlements, and the expanded infrastructure to bypass autonomous Palestinian population centers, without U.S. financial support. Another problem is that the increasingly interlocked military-industrial complexes of the two nations have furthered the questionable projection of U.S. military power in other conflict-ridden areas: For example, since the American peace movement had mobilized public opinion in the U.S. to levels which prohibited direct U.S. military assistance to Guatemala, South Africa, Iran, and the Contras, the U.S. simply armed these countries through Israel.

Yet virtually no leading political figures, outside some right-wing isolationists like Patrick Buchanan, have publicly questioned these ongoing high levels of U.S. aid to Israel. Most striking is that most prominent liberal Democrats, who have raised questions about U.S. aid to repressive regimes elsewhere, have categorically rejected linking aid to Israeli compliance with international law and human rights. While the role of the pro-Israel lobby is often exaggerated regarding as the determining factor in the overall thrust of U.S. Middle East policy,Foot note 2_45 there is little question that they have effectively neutralized liberal opposition on Capitol Hill.Foot note 2_46 Yet Congressional liberals have not had much in the way of pressure from the other direction: most liberal lobbying groups have avoided addressing the Middle East altogether.

Indeed, most organized peace and human rights groups have been unusually silent regarding U.S. aid to Israel, despite the fact that it is the largest recipient of U.S. aid. This comes in part due to the fact that, while most strategic analysts recognize that Israel — unlike some periods earlier in its history — is not under immediate military threat, there is still a widespread perception that Israel is under siege. As a result, those who oppose military aid to Israel are easily depicted as advocating the military destruction of the Jewish state, and are thus relegated to the fringe of U.S. public opinion along with anti-Jewish bigots. Consequently, there is virtually no chance that the U.S. government will consider a cessation or reduction in military aid to Israel any time in the foreseeable future. Therefore, many peace and human rights groups argue that they should focus their energy on more immediate attainable goals, such as supporting the ongoing peace process and supporting an Israeli freeze on expanding their settlements in the occupied territories, and not risk losing their political credibility on the aid issue. Furthermore, those opposing emphasis on the aid question believe that it raises an unnecessarily divisive issue at a time when there is a pressing need to reach out to those with a more mainstream political perspective in both the Jewish community and elsewhere, particularly since opposing military aid to Israel will inevitably be depicted as putting Israel’s survival at risk and thus alienate many potential allies.

Even if such a movement to cut U.S. aid were successful, so this argument goes, it may make matters worse. Such a cutoff may cause the Israeli public, increasingly open to the idea of granting the Palestinians at least some rights, to close ranks behind right-wing politicians and destroy the peace process. Many Israelis would see such a move as abandonment and betrayal, which would reinforce feelings of isolation and persecution built over centuries. According to this argument, this would not encourage necessary compromise, but may lead to even more reckless behavior by the Israeli military. Such concerns have led many Israelis on the left, including most of the recognized leadership of the Peace Now movement, to oppose any threatened cutoff or reduction in U.S. aid.

Those peace activists advocating this more cautious approach point out that many critics of Israeli policies do not share such universal principles, and use Israeli violations of human rights and international law as an excuse for attacking the world’s only Jewish state. While such people are certainly a minority among those critical of U.S. policy in the Middle East, it reinforces a widespread assumption that any criticism of U.S. support of the Israeli government carries just such a hidden agenda. For this reason, many who support a two-state solution and a more even-handed U.S. policy believe that a confrontational approach is counter-productive, that there should be no threats on a reduction of aid and that any criticism of the Israeli government should be kept private. While critics of this approach note its similarity with the Reagan and Bush administrations’ «quiet diplomacy» toward Latin American dictatorships and «constructive engagement» towards South Africa, its defenders observe that Israel’s isolation and the Jews’ history of persecution dictates the utilization of such a cautious strategy.

During the 1980s, many liberals supported U.S. aid to the Salvadoran government of Jose Napoleon Duarte, despite the ongoing gross and systematic human rights violations by the government and its armed forces. Supporters of Duarte successfully argued that the moderate Christian Democratic leader needed support to stave off threats from the right-wing ARENA party, which had close ties to the country’s notorious death squads, and a victory by the rightists would make the situation even worse. Similarly, despite serious questions about the Labor government’s commitment to human rights, international law, and even its timely and fair implementation of its commitments to the Palestinian Authority, many supporters of peace in the Middle East insist that unconditional support of the Labor government was necessary to prevent an election victory by the Likud.

Indeed, Americans for Peace Now, one of the few American Jewish groups to openly challenge the Likud government’s policies, argues that U.S. to Israel should be kept at current levels to maintain the «strong and prosperous Israel necessary to make peace.»Foot note 2_47

Impact on the Peace Process

Aid to Israel, particularly in recent years, has been justified as necessary to support the peace process. However, as noted authority on negotiations Roger Fisher has observed, one must apply both a carrot and a stick to convince a party to make the compromises necessary in diplomacy. Using either one alone denies the party you are trying to influence any incentive.Foot note 2_48 Yet, the U.S. has used the carrot with Israel almost exclusively. With repeated public pronouncements by U.S. officials that aid to Israel is unconditional, Israel has no incentive to make the necessary concessions which could lead to peace, or even to end its human rights abuses and violations of international law. As former Secretary of State Henry Kissinger once told a colleague, «I ask Rabin to make concessions, and he says he can’t because Israel is weak. So I given him more arms, and he say he doesn’t need to make concessions because Israel is strong.»Foot note 2_49
This is in contrast to the frequent use of aid as leverage to Jordan, Lebanon, Egypt and other Arab states, as well as the Palestinian authority.

Yet it has long been in the U.S. interests to maintain a militarily-powerful belligerent Israel dependent on the United States. Real peace could undermine such a relationship. The United States therefore has pursued a policy of Pax Americana, one which might bring greater stability to the region while falling short of real peace. The Camp David agreement was a prime example, in that it more closely resembled a tripartite military pact that a true peace treaty, promising more than $5 billion of additional weaponry and economic assistance to both countries and closer American strategic cooperation. The U.S. refused to follow through on provisions of the agreement calling for Palestinian autonomy, increasing aid to Israel even as Jewish colonization and anti-Palestinian repression in the territories greatly increased. Indeed, this aid package was supposed a one-time loan, but has since evolved into an annual grant which takes up the majority of the foreign aid budget.

The ability of those in the United States and Israel who oppose the large-scale and unconditional aid relationship to mobilize effectively will perhaps determine the fate of the peace process. As of now, those who support the status quo — American and Israeli military and political officials, American supporters of the Israeli government and U.S. arms manufacturers — currently exercise enormous political power. Indeed, despite some of the opinions of critics cited in this article, there has been virtually no debate on a national scale in either country about the risks inherent in this ongoing relationship.

The result could be tragic, not just for the Palestinians, Lebanese and others who are the immediate victims of the largess of American aid to Israel, but ultimately for Israel as well. Like El Salvador and South Vietnam, Israel has become a client state whose leadership has made common cause with U.S. global designs in ways that could ultimately lead to the country’s self-destruction. Israeli leaders and their counterparts in many American Zionist organizations have been repeating the historic error of trading short-term benefits for their people at the risk of long-term security. For Israel’s economic and military security ultimately will come not from the amount of economic and military aid it receives from the United States, but on its willingness to make peace with its neighbors, particularly the Palestinians, recognizing that they too have a right for freedom and security. For in the end, Israeli security and Palestinian rights are not mutually exclusive, but mutually dependent on the other.

Stephen Zunes

Department of Politics. University of San Francisco
2130 Fulton Street. San Francisco, CA 94117, U.S.A.
[Foot Note 1_1]
Originally published in Middle East Policy. Displayed here thanks to the author’s kind permission.Back to main body of the paper

[Foot Note 1_2]

Stephen Zunes is an assistant professor in the Department of Politics at the University of San Francisco.Back to main body of the paper

[Foot Note 2_1]

Congressional Research Service, «Israel: U.S. Foreign Assistance», August 30, 1995, compiled by Clyde Mark.

This amount is higher than even that of the highly-quoted Soviet aid to Cuba in the thirty years prior to 1991.Back to main body of the paper

[Foot Note 2_2]

Martha Wenger, «U.S. Aid to Israel: From Handshake to Embrace,» Middle East Report, May-August 1990Back to main body of the paper

[Foot Note 2_3]

The breakdown of grant aid over the official $3 billion is as follows includes bank charges incurred by U.S. government for lump sum withdrawal ($60 million); interest earned by Israel on ESF aid money reinested in U.S. treasury notes ($90 million); supplemental State Department funded aid ($93.5 million); supplemental Defense Department items ($242.3 million); a contract with the Immigration and Naturalization Service ($17 million); assistance from the Commerce Department ($2.5 million) [«House Appropriations Committee Funds U.S.-Israeli Cooperation,» Near East Rport, Vol. XXXIX, No. 18, Aug. 14, 1995, p. 99 and Shawn Twing, «A Comprehensive Guide to U.S. Aid to Israel,» Washington Report on Middle East Affairs» April 1996, p. 7]Back to main body of the paper

[Foot Note 2_4]

In other countries which receives U.S. economic aid, there is an AID mission as part of the US Embassy which audits all the relevant expenditures. Without such a presence in Israel, there have been a number of scandals involving U.S. funds, such as when General Electric’s manager for Israel was caught paying kickbacks to Israeli authorities responsible for procurement, or when General Rami Dotan was found to be siphoning off US funds for his personal use.Back to main body of the paper

[Foot Note 2_5]

Figures cited in Edward T. Pound, «A Close Look at U.S. Aid to Israel Reveals Deals That Push Cost Above Publicly Quoted Figures,» The Wall Street Journal, Sept. 19, 1991, p. A16Back to main body of the paper

[Foot Note 2_6]

Martha Wenger, «The Money Tree: US Aid to Israel», Middle East Report, May-Aug. 1990, p. 12. Back to main body of the paper

[Foot Note 2_7]

Ibid.Back to main body of the paper

[Foot Note 2_8]

Background briefing, Department of State, March 26, 1996Back to main body of the paper

[Foot Note 2_9]

Cited in Joel Bainerman, «Looking the Gift Horse in the Mouth: Israelis Ask if U.S. Generosity Might Actually Be Hurting their Country,» Washington Post, Oct. 29, 1995, p. C4Back to main body of the paper

[Foot Note 2_10]

This commitment to Israeli superiority is often casts in terms of compensating for the superior numerical strength of the combined forces of neighboring Arab states. However, not only are Israeli forces far better trained and more mobile, but the idea of large numbers of Arab states uniting to destroy Israel at this point is highly questionable at best.Back to main body of the paper

[Foot Note 2_11]

Karen L. Puschel, U.S.-Israeli Strategic Cooperation in the Post-Cold War Era: An American Perspective, Boulder: Westview Press, 1993, p. 150Back to main body of the paper

[Foot Note 2_12]

Glenn Frankel, Washington Post, Nov. 19, 1986Back to main body of the paper

[Foot Note 2_13]

Cited in Stephen Green, Taking Sides: America’s Secret Relations With a Militant Israel, Brattleboro, VT: Amana Books, 1988, p. 250Back to main body of the paper

[Foot Note 2_14]

Also known as the Guam Doctrine, or «surrogate strategy,» where a Third World ally would be capable of military intervention on behalf of the U.S., thus minimizing the political risks from direct American military intervention. I describe the policy in relation to the Persian Gulf in my article «U.S.-GCC: Its Rise and Potential Fall» in Middle East Policy, Vol. II; No. 1, 1993, particularly pp. 103-104.Back to main body of the paper

[Foot Note 2_15]

The chronology of aid figures is taken from Wenger, op. cit.Back to main body of the paper

[Foot Note 2_16]

Pound, op. cit.Back to main body of the paper

[Foot Note 2_17]

Ronald Young, Missed Opportunities for Peace: U.S. Middle East Policy 1981-1986, Philadelphia: American Friends Service Committee, 1988Back to main body of the paper

[Foot Note 2_18]

Interviews at Ben Gurion University in Beersheva, January 1994.Back to main body of the paper

[Foot Note 2_19]

David Hoffman, Washington Post, June 10, 1993Back to main body of the paper

[Foot Note 2_20]

Ruth E. Steele, «Why Republicans Have Put Cuts In Aid to Israel ‘Off the Table’», Washington Report on Middle East Affairs, April/May 1995, p. 41-42Back to main body of the paper

[Foot Note 2_21]

Lucille Barnes, «Once Again, Israel Gets Away With Spending U.S. Aid on Settlements,» Washington Report on Middle East Affairs, Oct-Nov 1995Back to main body of the paper

[Foot Note 2_22]

Nathan Jones, «Exempting Israel Makes Foreign Aid Savings Insignificant,» Washington Report on Middle East Affairs, March 1995, p. 44Back to main body of the paper

[Foot Note 2_23]

Steele, op. cit.Back to main body of the paper

[Foot Note 2_24]

Interview, May 12, 1992, Seattle, Washington.Back to main body of the paper

[Foot Note 2_25]

Alan Kronstadt et al, Hostile Takeover: How the Aerospace Industries Association Gain Control of American Foreign Policy and Double Arms Transfers to Dictators, Washington: Project on Demilitarization and Democracy, 1995.Back to main body of the paper

[Foot Note 2_26]

Joshua Goldstein, PACs in Profile: Spending Patterns in the 1994 Elections, Washington: Center for Responsive Politics, June 1995.Back to main body of the paper

[Foot Note 2_27]

Twing, op. cit.Back to main body of the paper

[Foot Note 2_28]

Interview with Major General Mattityahu Peled (Ret.), May 12, 1992, Seattle, Washington.Back to main body of the paper

[Foot Note 2_29]

It is noteworthy that in the development of a new anti-missile defense system for Israel, the U.S. initially insisted that it be mobile, despite the Israeli preference for a cheaper and simpler fixed system, which would have been quite adequate for their small territory.Back to main body of the paper

[Foot Note 2_30]

Bainerman, op. cit.Back to main body of the paper

[Foot Note 2_31]

Simcha Bahiri, «A Peace Economy for Israel, The New Economy, Spring 1995.Back to main body of the paper

[Foot Note 2_32]

Bainerman, op. cit.Back to main body of the paper

[Foot Note 2_33]

Ibid.Back to main body of the paper

[Foot Note 2_34]

Ibid.Back to main body of the paper

[Foot Note 2_35]

Charles Lane, «Rabble Rousing: National Insecurity» New Republic, June 12, 1995.Back to main body of the paper

[Foot Note 2_36]

Peled, op. cit.Back to main body of the paper

[Foot Note 2_37]

Department of State, op. cit.Back to main body of the paper

[Foot Note 2_38]

Matti Peled, New Outlook, May/June 1975Back to main body of the paper

[Foot Note 2_39]

Nathan Shaham, Yediot Ahronot, Nov. 28, 1996, cited in Noam Chomsky, World Orders Old and New, New York: Columbia University Press, 1994, p. 206.Back to main body of the paper

[Foot Note 2_40]

B. Michael, Ha’aretz, Nov. 11, 1983, cited in Ibid.Back to main body of the paper

[Foot Note 2_41]

For example, see Cherie Brown, et al, «A Draft Policy on Jewish Liberation, Ruah Hadashah #4 (1981); particularly, pp. 11-13.Back to main body of the paper

[Foot Note 2_42]

Henry Kissinger, Years of Upheaval, Boston: Little, Brown, Company, 1982, p. 621Back to main body of the paper

[Foot Note 2_43]

For example, see Cherie Brown, op. cit. I elaborate on this thesis in my article, «Zionism, Anti-Semitism and Imperialism,» in Peace Review, Vol. 6, No. 1 (Spring 1994).Back to main body of the paper

[Foot Note 2_44]

Wirthlin group, 95% confidence level, polled Sept. 6-8, 1994. 53% favored phase out, 36% opposed, 11% don’t know or no opinion. On the question of amount of aid, 33% said cutoff, 36% said reduction, 18% current levels, 6% increase, 6% don’t know or no opinion. Cited in Washington Report on Middle East Affairs, Nov/Dec 1994.Back to main body of the paper

[Foot Note 2_45]

See my article «The Roots of the U.S.-Israeli Relationship,» New Political Science, Spring-Summer 1992, Nos. 21-22.

For similar conclusions, albeit from a very different perspective, see A.F.K. Organski, The $36 Billion Bargain: Strategy and Politics in U.S. Assistance to Israel, New York: Columbia University Press, 1990, especially chapter 3.Back to main body of the paper

[Foot Note 2_46]

The pro-Israel lobby and its related political action committees also take advantage of the overall strategic relationship to influence certain fiscal aspects of the relationship, i.e. payments to Israel in one lump some as opposed to quarterly, etc.Back to main body of the paper

[Foot Note 2_47]

Interview with director Barry Rubin, April 29, 1996.Back to main body of the paper

[Foot Note 2_48]

Roger Fisher et al, Beyond Machiavelli, Cambridge: Harvard University Press, 1994.Back to main body of the paper

[Foot Note 2_49]

Edward Sheehan, The Arabs, Israelis and Kissinger: A Secret History of American Diplomacy in the Middle East, New York: Readers Digest Press, 1976, p. 200Back to main body of the paper