Function of U.S. Aid to Israel,
Washington Report on Middle East Affairs, by Stephen Zunes, October 31, 2002
"Since 1992, the U.S. has offered Israel an additional $2 billion annually in loan guarantees. 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. In addition, there is the more than $1.5 billion in private U.S. funds that go to Israel annually in the form of $1 billion in private tax-deductible donations and $500 million in Israeli bonds. 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."
[U.S Financial Aid To Israel: Figures, Facts, and Impact Summary Benefits to Israel of U.S. Aid Since 1949 (As of November 1, 1997): "Foreign Aid Grants and Loans $74,157,600,000. Other U.S. Aid (12.2% of Foreign Aid) $9,047,227,200. Interest to Israel from Advanced Payments $1,650,000,000. Grand Total $84,854,827,200. Total Benefits per Israeli $14,630"]
The Cost of Israel to U.S. Taxpayers: True Lies About U.S. Aid to Israel,
by Richard H. Curtiss, sianews.com, November 17, 2002
For many years the American media said that 'Israel receives $1.8 billion in military aid' or that 'Israel receives $1.2 billion in economic aid.' Both statements were true, but since they were never combined to give us the complete total of annual U.S. aid to Israel, they also were lies--true lies ... Recently Americans have begun to read and hear that 'Israel receives $3 billion in annual U.S. foreign aid.' That's true. But it's still a lie. The problem is that in fiscal 1997 alone, Israel received from a variety of other U.S. federal budgets at least $525.8 million above and beyond its $3 billion from the foreign aid budget, and yet another $2 billion in federal loan guarantees. So the complete total of U.S. grants and loan guarantees to Israel for fiscal 1997 was $5,525,800,000. One can truthfully blame the mainstream media for never digging out these figures for themselves, because none ever have. They were compiled by the Washington Report on Middle East Affairs. But the mainstream media certainly are not alone. Although Congress authorizes America's foreign aid total, the fact that more than a third of it goes to a country smaller in both area and population than Hong Kong probably never has been mentioned on the floor of the Senate or House. Yet it's been going on for more than a generation. Probably the only members of Congress who even suspect the full total of U.S. funds received by Israel each year are the privileged few committee members who actually mark it up. And almost all members of the concerned committees are Jewish, have taken huge campaign donations orchestrated by Israel's Washington, DC lobby, the American Israel Public Affairs Committee (AIPAC), or both. These congressional committee members are paid to act, not talk. So they do and they don't. The same applies to the president, the secretary of state, and the foreign aid administrator. They all submit a budget that includes aid for Israel, which Congress approves, or increases, but never cuts. But no one in the executive branch mentions that of the few remaining U.S. aid recipients worldwide, all of the others 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 suffered some crippling blow of nature to their abilities to feed their people such as earthquakes, floods or droughts. Israel, whose troubles arise solely from its unwillingness to give back land it seized in the 1967 war in return for peace with its neighbors, does not fit those criteria. In fact, Israel's 1995 per capita gross domestic product was $15,800. That put it below Britain at $19,500 and Italy at $18,700 and just above Ireland at $15,400 and Spain at $14,300. All four of those European countries have contributed a very large share of immigrants to the U.S., yet none has organized an ethnic group to lobby for U.S. foreign aid. Instead, all four send funds and volunteers to do economic development and emergency relief work in other less fortunate parts of the world. The lobby that Israel and its supporters have built in the United States to make all this aid happen, and to ban discussion of it from the national dialogue, goes far beyond AIPAC, with its $15 million budget, its 150 employees, and its five or six registered lobbyists who manage to visit every member of Congress individually once or twice a year. AIPAC, in turn, can draw upon the resources of the Conference of Presidents of Major American Jewish Organizations, a roof group set up solely to coordinate the efforts of some 52 national Jewish organizations on behalf of Israel. Among them are Hadassah, the Zionist women's organization, which organizes a steady stream of American Jewish visitors to Israel; the American Jewish Congress, which mobilizes support for Israel among members of the traditionally left-of-center Jewish mainstream; and the American Jewish Committee, which plays the same role within the growing middle-of-the-road and right-of-center Jewish community. The American Jewish Committee also publishes Commentary,one of the Israel lobby's principal national publications. Perhaps the most controversial of these groups is B'nai B'rith's Anti-Defamation League. Its original highly commendable purpose was to protect the civil rights of American Jews. Over the past generation, however, the ADL has regressed into a conspiratorial and, with a $45 million budget, extremely well-funded hate group." ... America's $84.8 billion in aid to Israel from fiscal years 1949 through 1998, and the interest the U.S. paid to borrow this money, has cost U.S. taxpayers $134.8 billion, not adjusted for inflation. Or, put another way, the nearly $14,630 every one of 5.8 million Israelis received from the U.S. government by Oct. 31, 1997 has cost American taxpayers $23,240 per Israeli. It would be interesting to know how many of those American taxpayers believe they and their families have received as much from the U.S. Treasury as has everyone who has chosen to become a citizen of Israel. But it's a question that will never occur to the American public because, so long as America's mainstream media, Congress and president maintain their pact of silence, few Americans will ever know the true cost of Israel to U.S. taxpayers."
Economist tallies swelling cost of Israel to US,
The Christian Science Monitor, December 9, 2002
"Since 1973, Israel has cost the United States about $1.6 trillion. If divided by today's population, that is more than $5,700 per person. This is an estimate by Thomas Stauffer, a consulting economist in Washington. For decades, his analyses of the Middle East scene have made him a frequent thorn in the side of the Israel lobby. For the first time in many years, Mr. Stauffer has tallied the total cost to the US of its backing of Israel in its drawn-out, violent dispute with the Palestinians. So far, he figures, the bill adds up to more than twice the cost of the Vietnam War. And now Israel wants more. In a meeting at the White House late last month, Israeli officials made a pitch for $4 billion in additional military aid to defray the rising costs of dealing with the intifada and suicide bombings. They also asked for more than $8 billion in loan guarantees to help the country's recession-bound economy. Considering Israel's deep economic troubles, Stauffer doubts the Israel bonds covered by the loan guarantees will ever be repaid. The bonds are likely to be structured so they don't pay interest until they reach maturity. If Stauffer is right, the US would end up paying both principal and interest, perhaps 10 years out. Israel's request could be part of a supplemental spending bill that's likely to be passed early next year, perhaps wrapped in with the cost of a war with Iraq. Israel is the largest recipient of US foreign aid. It is already due to get $2.04 billion in military assistance and $720 million in economic aid in fiscal 2003. It has been getting $3 billion a year for years. Adjusting the official aid to 2001 dollars in purchasing power, Israel has been given $240 billion since 1973, Stauffer reckons. In addition, the US has given Egypt $117 billion and Jordan $22 billion in foreign aid in return for signing peace treaties with Israel. 'Consequently, politically, if not administratively, those outlays are part of the total package of support for Israel,' argues Stauffer in a lecture on the total costs of US Middle East policy, commissioned by the US Army War College, for a recent conference at the University of Maine. These foreign-aid costs are well known. Many Americans would probably say it is money well spent to support a beleagured democracy of some strategic interest. But Stauffer wonders if Americans are aware of the full bill for supporting Israel since some costs, if not hidden, are little known. One huge cost is not secret. It is the higher cost of oil and other economic damage to the US after Israel-Arab wars. In 1973, for instance, Arab nations attacked Israel in an attempt to win back territories Israel had conquered in the 1967 war. President Nixon resupplied Israel with US arms, triggering the Arab oil embargo against the US. That shortfall in oil deliveries kicked off a deep recession. The US lost $420 billion (in 2001 dollars) of output as a result, Stauffer calculates. And a boost in oil prices cost another $450 billion. Afraid that Arab nations might use their oil clout again, the US set up a Strategic Petroleum Reserve. That has since cost, conservatively, $134 billion, Stauffer reckons. Other US help includes: • US Jewish charities and organizations have remitted grants or bought Israel bonds worth $50 billion to $60 billion. Though private in origin, the money is "a net drain" on the United States economy, says Stauffer. • The US has already guaranteed $10 billion in commercial loans to Israel, and $600 billion in "housing loans." Stauffer expects the US Treasury to cover these. • The US has given $2.5 billion to support Israel's Lavi fighter and Arrow missile projects. • Israel buys discounted, serviceable "excess" US military equipment. Stauffer says these discounts amount to "several billion dollars" over recent years. • Israel uses roughly 40 percent of its $1.8 billion per year in military aid, ostensibly earmarked for purchase of US weapons, to buy Israeli-made hardware. It also has won the right to require the Defense Department or US defense contractors to buy Israeli-made equipment or subsystems, paying 50 to 60 cents on every defense dollar the US gives to Israel. US help, financial and technical, has enabled Israel to become a major weapons supplier. Weapons make up almost half of Israel's manufactured exports. US defense contractors often resent the buy-Israel requirements and the extra competition subsidized by US taxpayers. • US policy and trade sanctions reduce US exports to the Middle East about $5 billion a year, costing 70,000 or so American jobs, Stauffer estimates. Not requiring Israel to use its US aid to buy American goods, as is usual in foreign aid, costs another 125,000 jobs. • Israel has blocked some major US arms sales, such as F-15 fighter aircraft to Saudi Arabia in the mid-1980s. That cost $40 billion over 10 years, says Stauffer. Stauffer's list will be controversial. He's been assisted in this research by a number of mostly retired military or diplomatic officials who do not go public for fear of being labeled anti-Semitic if they criticize America's policies toward Israel."
Israel wants more than total US foreign aid budget,
Financial Review, January 8, 2002
"A delegation from Israel, the largest recipient of US foreign aid, has sought $US12 billion ($21 billion) in assistance at a meeting with State Department and White House officials, Israeli officials said. The request, covering the next three to five years, exceeds the total $US11.6 billion budgeted last year by the US for all countries. The request is to help Israel weather the Palestinian uprising and a possible US war with Iraq ... Prime Minister Ariel Sharon's office said Israel was asking for $US4 billion in direct assistance and $US8 billion in loan guarantees. A US official indicated before the meeting that the US was open to the request. 'We always try to do what we can to help our friend and ally,' the official told reporters. The meeting was intended to focus on "Israel's current economic situation and Israel's expected request for supplemental assistance", he said."
Bush Decides Against New Aid Grants for States,
Reuters, January 7, 2003
"President Bush has decided against offering grants to cash-strapped states as part of a $674 billion economic stimulus package he is to unveil on Tuesday, the White House said. The White House had been considering providing $10 billion to states to reduce budget woes but White House spokesman Ari Fleischer told reporters that Bush had decided against it. 'The goal of the package is to stimulate the economy, not transfer money from one taxpayer-funded source in the government to another taxpayer-funded source in a different government,' Fleischer said."