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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
Cost to U.S. Taxpayers of U.S.
Aid to Israel
Grand Total
$84,854,827,200
Interest Costs Borne by U.S.
$49,936,680,000
Total Cost to U.S. Taxpayers
$134,791,507,200
Total Taxpayer Cost per Israeli
$23,240
Special Reports:
Congress Watch: A Conservative Total for U.S. Aid to Israel: $91
Billion--and Counting
Congressional Research Report on Israel: US Foreign Assistance by
Clyde Mark (213K pdf file)
U.S. Aid To Israel: The Strategic Functions
U.S. Aid to Israel: What U.S. Taxpayer Should Know
U.S. Aid to Israel: Interpreting the 'Strategic Relationship'
The Cost of Israel to U.S. Taxpayers: True Lies About U.S. Aid to
Israel
THE STRATEGIC FUNCTIONS OF U.S. AID TO ISRAEL
By Stephen Zunes
Dr. Zunes is an assistant professor in the Department of Politics at
the University of San Francisco
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. 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.
Total U.S. aid to Israel is approximately one-third of the American
foreign-aid budget, even though Israel comprises just .001 percent 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 of about $14,000, Israel ranks as the sixteenth
wealthiest country in the world; Israelis enjoy a higher per capita
income than oil-rich Saudi Arabia and are only slightly less well-off
than most Western European countries.
AID does not term economic aid to Israel as development assistance,
but instead uses the term "economic support funding." Given Israel's
relative prosperity, U.S. aid to Israel is becoming increasingly
controversial. In 1994, Yossi Beilen, deputy foreign minister of
Israel and a Knesset member, told the Women's International Zionist
organization, "If our economic situation is better than in many of
your countries, how can we go on asking for your charity?"
--------------------------------------------------------------------------------
U.S. Aid to Israel: What U.S. Taxpayer Should Know
by Tom Malthaner
This morning as I was walking down Shuhada Street in Hebron, I saw
graffiti marking the newly painted storefronts and awnings. Although
three months past schedule and 100 percent over budget, the renovation
of Shuhada Street was finally completed this week. The project manager
said the reason for the delay and cost overruns was the sabotage of
the project by the Israeli settlers of the Beit Hadassah settlement
complex in Hebron. They broke the street lights, stoned project
workers, shot out the windows of bulldozers and other heavy equipment
with pellet guns, broke paving stones before they were laid and now
have defaced again the homes and shops of Palestinians with graffiti.
The settlers did not want Shuhada St. opened to Palestinian traffic as
was agreed to under Oslo 2. This renovation project is paid for by
USAID funds and it makes me angry that my tax dollars have paid for
improvements that have been destroyed by the settlers.
Most Americans are not aware how much of their tax revenue our
government sends to Israel. For the fiscal year ending in September
30, 1997, the U.S. has given Israel $6.72 billion: $6.194 billion
falls under Israel's foreign aid allotment and $526 million comes from
agencies such as the Department of Commerce, the U.S. Information
Agency and the Pentagon. The $6.72 billion figure does not include
loan guarantees and annual compound interest totalling $3.122 billion
the U.S. pays on money borrowed to give to Israel. It does not include
the cost to U.S. taxpayers of IRS tax exemptions that donors can claim
when they donate money to Israeli charities. (Donors claim
approximately $1 billion in Federal tax deductions annually. This
ultimately costs other U.S. tax payers $280 million to $390 million.)
When grant, loans, interest and tax deductions are added together for
the fiscal year ending in September 30, 1997, our special relationship
with Israel cost U.S. taxpayers over $10 billion.
Since 1949 the U.S. has given Israel a total of $83.205 billion. The
interest costs borne by U.S. tax payers on behalf of Israel are
$49.937 billion, thus making the total amount of aid given to Israel
since 1949 $133.132 billion. This may mean that U.S. government has
given more federal aid to the average Israeli citizen in a given year
than it has given to the average American citizen.
I am angry when I see Israeli settlers from Hebron destroy
improvements made to Shuhada Street with my tax money. Also, it angers
me that my government is giving over $10 billion to a country that is
more prosperous than most of the other countries in the world and uses
much of its money for strengthening its military and the oppression of
the Palestinian people.
--------------------------------------------------------------------------------
"U.S. Aid to Israel: Interpreting the 'Strategic Relationship"'
by Stephen Zunes
"The U.S. aid relationship with Israel is unlike any other in the
world," said Stephen Zunes during a January 26 CPAP presentation. "In
sheer volume, the amount is the most generous foreign aid program ever
between any two countries," added Zunes, associate professor of
Politics and chair of the Peace and Justice Studies Program at the
University of San Francisco.
He explored the strategic reasoning behind the aid, asserting that it
parallels the "needs of American arms exporters" and the role "Israel
could play in advancing U.S. strategic interests in the region."
Although Israel is an "advanced, industrialized, technologically
sophisticated country," it "receives more U.S. aid per capita annually
than the total annual [Gross Domestic Product] per capita of several
Arab states." Approximately a third of the entire U.S. foreign aid
budget goes to Israel, "even though Israel comprises just...one-
thousandth of the world's total population, and already has one of the
world's higher per capita incomes."
U.S. government officials argue that this money is necessary for
"moral" reasons-some even say that Israel is a "democracy battling for
its very survival." If that were the real reason, however, aid should
have been highest during Israel's early years, and would have declined
as Israel grew stronger. Yet "the pattern...has been just the opposite."
According to Zunes, "99 percent of all U.S. aid to Israel took place
after the June 1967 war, when Israel found itself more powerful than
any combination of Arab armies...."
The U.S. supports Israel's dominance so it can serve as "a surrogate
for American interests in this vital strategic region." "Israel has
helped defeat radical nationalist movements" and has been a "testing
ground for U.S. made weaponry." Moreover, the intelligence agencies of
both countries have "collaborated," and "Israel has funneled U.S. arms
to third countries that the U.S. [could] not send arms to directly,...
Iike South Africa, like the Contras, Guatemala under the military
junta, [and] Iran." Zunes cited an Israeli analyst who said: "'It's
like Israel has just become another federal agency when it's
convenient to use and you want something done quietly."' Although the
strategic relationship between the United States and the Gulf Arab
states in the region has been strengthening in recent years, these
states "do not have the political stability, the technological
sophistication, [or] the number of higher-trained armed forces
personnel" as does Israel.
Matti Peled, former Israeli major general and Knesset member, told
Zunes that he and most Israeli generals believe this aid is "little
more than an American subsidy to U.S. arms manufacturers," considering
that the majority of military aid to Israel is used to buy weapons
from the U.S. Moreover, arms to Israel create more demand for weaponry
in Arab states. According to Zunes, "the Israelis announced back in
1991 that they supported the idea of a freeze in Middle East arms
transfers, yet it was the United States that rejected it."
In the fall of 1993-when many had high hopes for peace-78 senators
wrote to former President Bill Clinton insisting that aid to Israel
remain "at current levels." Their "only reason" was the "massive
procurement of sophisticated arms by Arab states." The letter
neglected to mention that 80 percent of those arms to Arab countries
came from the U.S. "I'm not denying for a moment the power of AIPAC
[the American Israel Public Affairs Committee], the pro-Israel lobby,"
and other similar groups, Zunes said. Yet the "Aerospace Industry
Association which promotes these massive arms shipments...is even more
influential." This association has given two times more money to
campaigns than all of the pro-Israel groups combined. Its "force on
Capitol Hill, in terms of lobbying, surpasses that of even AIPAC."
Zunes asserted that the "general thrust of U.S. policy would be pretty
much the same even if AIPAC didn't exist. We didn't need a pro-
Indonesia lobby to support Indonesia in its savage repression of East
Timor all these years." This is a complex issue, and Zunes said that
he did not want to be "conspiratorial," but he asked the audience to
imagine what "Palestinian industriousness, Israeli technology, and
Arabian oil money...would do to transform the Middle East.... [W]hat would
that mean to American arms manufacturers? Oil companies? Pentagon
planners?"
"An increasing number of Israelis are pointing out" that these funds
are not in Israel's best interest. Quoting Peled, Zunes said, "this
aid pushes Israel 'toward a posture of callous intransigence' in terms
of the peace process." Moreover, for every dollar the U.S. sends in
arms aid, Israel must spend two to three dollars to train people to
use the weaponry, to buy parts, and in other ways make use of the aid.
Even "main-stream Israeli economists are saying [it] is very harmful
to the country's future."
The Israeli paper Yediot Aharonot described Israel as "'the
godfather's messenger' since [Israel] undertake the 'dirty work' of
a godfather who 'always tries to appear to be the owner of some large,
respectable business."' Israeli satirist B. Michael refers to U.S. aid
this way: "'My master gives me food to eat and I bite those whom he
tells me to bite. It's called strategic cooperation." 'To challenge
this strategic relationship, one cannot focus solely on the Israeli
lobby but must also examine these "broader forces as well." "Until we
tackle this issue head-on," it will be "very difficult to win" in
other areas relating to Palestine.
"The results" of the short-term thinking behind U.S. policy "are
tragic," not just for the "immediate victims" but "eventually [for]
Israel itself" and "American interests in the region." The U.S. is
sending enormous amounts of aid to the Middle East, and yet "we are
less secure than ever"-both in terms of U.S. interests abroad and for
individual Americans. Zunes referred to a "growing and increasing
hostility [of] the average Arab toward the United States." In the long
term, said Zunes, "peace and stability and cooperation with the vast
Arab world is far more important for U.S. interests than this alliance
with Israel."
This is not only an issue for those who are working for Palestinian
rights, but it also "jeopardizes the entire agenda of those of us
concerned about human rights, concerned about arms control, concerned
about international law." Zunes sees significant potential in
"building a broad-based movement around it."
The above text is based on remarks, delivered on. 26 January, 2001 by
Stephen Zunes - Associate Professor of Politics and Chair of the Peace
and Justice Studies Program at San Francisco University.
--------------------------------------------------------------------------------
The Cost of Israel to U.S. Taxpayers: True Lies About U.S. Aid to
Israel
By Richard H. Curtiss
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.
In the 1980s, during the tenure of chairman Seymour Reich, who went on
to become chairman of the Conference of Presidents, ADL was found to
have circulated two annual fund-raising letters warning Jewish parents
against allegedly negative influences on their children arising from
the increasing Arab presence on American university campuses.
More recently, FBI raids on ADL's Los Angeles and San Francisco
offices revealed that an ADL operative had purchased files stolen from
the San Francisco police department that a court had ordered destroyed
because they violated the civil rights of the individuals on whom they
had been compiled. ADL, it was shown, had added the illegally prepared
and illegally obtained material to its own secret files, compiled by
planting informants among Arab-American, African-American, anti-
Apartheid and peace and justice groups.
The ADL infiltrators took notes of the names and remarks of speakers
and members of audiences at programs organized by such groups. ADL
agents even recorded the license plates of persons attending such
programs and then suborned corrupt motor vehicles department employees
or renegade police officers to identify the owners.
Although one of the principal offenders fled the United States to
escape prosecution, no significant penalties were assessed. ADL's
Northern California office was ordered to comply with requests by
persons upon whom dossiers had been prepared to see their own files,
but no one went to jail and as yet no one has paid fines.
Not surprisingly, a defecting employee revealed in an article he
published in the Washington Report on Middle East Affairs that AIPAC,
too, has such "enemies" files. They are compiled for use by pro-Israel
journalists like Steven Emerson and other so-called "terrorism
experts," and also by professional, academic or journalistic rivals of
the persons described for use in black-listing, defaming, or
denouncing them. What is never revealed is that AIPAC's "opposition
research" department, under the supervision of Michael Lewis, son of
famed Princeton University Orientalist Bernard Lewis, is the source of
this defamatory material.
But this is not AIPAC's most controversial activity. In the 1970s,
when Congress put a cap on the amount its members could earn from
speakers' fees and book royalties over and above their salaries, it
halted AIPAC's most effective ways of paying off members for voting
according to AIPAC recommendations. Members of AIPAC's national board
of directors solved the problem by returning to their home states and
creating political action committees (PACs).
Most special interests have PACs, as do many major corporations, labor
unions, trade associations and public-interest groups. But the pro-
Israel groups went wild. To date some 126 pro-Israel PACs have been
registered, and no fewer than 50 have been active in every national
election over the past generation.
An individual voter can give up to $2,000 to a candidate in an
election cycle, and a PAC can give a candidate up to $10,000. However,
a single special interest with 50 PACs can give a candidate who is
facing a tough opponent, and who has voted according to its
recommendations, up to half a million dollars. That's enough to buy
all the television time needed to get elected in most parts of the
country.
Even candidates who don't need this kind of money certainly don't want
it to become available to a rival from their own party in a primary
election, or to an opponent from the opposing party in a general
election. As a result, all but a handful of the 535 members of the
Senate and House vote as AIPAC instructs when it comes to aid to
Israel, or other aspects of U.S. Middle East policy.
There is something else very special about AIPAC's network of
political action committees. Nearly all have deceptive names. Who
could possibly know that the Delaware Valley Good Government
Association in Philadelphia, San Franciscans for Good Government in
California, Cactus PAC in Arizona, Beaver PAC in Wisconsin, and even
Icepac in New York are really pro-Israel PACs under deep cover?
Hiding AIPAC's Tracks
In fact, the congressmembers know it when they list the contributions
they receive on the campaign statements they have to prepare for the
Federal Election Commission. But their constituents don't know this
when they read these statements. So just as no other special interest
can put so much "hard money" into any candidate's election campaign as
can the Israel lobby, no other special interest has gone to such
elaborate lengths to hide its tracks.
Although AIPAC, Washington's most feared special-interest lobby, can
hide how it uses both carrots and sticks to bribe or intimidate
members of Congress, it can't hide all of the results.
Anyone can ask one of their representatives in Congress for a chart
prepared by the Congressional Research Service, a branch of the
Library of Congress, that shows Israel received $62.5 billion in
foreign aid from fiscal year 1949 through fiscal year 1996. People in
the national capital area also can visit the library of the U.S.
Agency for International Development (USAID) in Rosslyn, Virginia, and
obtain the same information, plus charts showing how much foreign aid
the U.S. has given other countries as well.
Visitors will learn that in precisely the same 1949-1996 time frame,
the total of U.S. foreign aid to all of the countries of sub-Saharan
Africa, Latin America and the Caribbean combined was $62,497,800,000--
almost exactly the amount given to tiny Israel.
According to the Population Reference Bureau of Washington, DC, in
mid-1995 the sub-Saharan countries had a combined population of 568
million. The $24,415,700,000 in foreign aid they had received by then
amounted to $42.99 per sub-Saharan African.
Similarly, with a combined population of 486 million, all of the
countries of Latin America and the Caribbean together had received
$38,254,400,000. This amounted to $79 per person.
The per capita U.S. foreign aid to Israel's 5.8 million people during
the same period was $10,775.48. This meant that for every dollar the
U.S. spent on an African, it spent $250.65 on an Israeli, and for
every dollar it spent on someone from the Western Hemisphere outside
the United States, it spent $214 on an Israeli.
Shocking Comparisons
These comparisons already seem shocking, but they are far from the
whole truth. Using reports compiled by Clyde Mark of the Congressional
Research Service and other sources, freelance writer Frank Collins
tallied for theWashington Report all of the extra items for Israel
buried in the budgets of the Pentagon and other federal agencies in
fiscal year 1993.Washington Report news editor Shawn Twing did the
same thing for fiscal years 1996 and 1997.
They uncovered $1.271 billion in extras in FY 1993, $355.3 million in
FY 1996 and $525.8 million in FY 1997. These represent an average
increase of 12.2 percent over the officially recorded foreign aid
totals for the same fiscal years, and they probably are not complete.
It's reasonable to assume, therefore, that a similar 12.2 percent
hidden increase has prevailed over all of the years Israel has
received aid.
As of Oct. 31, 1997 Israel will have received $3.05 billion in U.S.
foreign aid for fiscal year 1997 and $3.08 billion in foreign aid for
fiscal year 1998. Adding the 1997 and 1998 totals to those of previous
years since 1949 yields a total of $74,157,600,000 in foreign aid
grants and loans. Assuming that the actual totals from other budgets
average 12.2 percent of that amount, that brings the grand total to
$83,204,827,200.
But that's not quite all. Receiving its annual foreign aid
appropriation during the first month of the fiscal year, instead of in
quarterly installments as do other recipients, is just another special
privilege Congress has voted for Israel. It enables Israel to invest
the money in U.S. Treasury notes. That means that the U.S., which has
to borrow the money it gives to Israel, pays interest on the money it
has granted to Israel in advance, while at the same time Israel is
collecting interest on the money. That interest to Israel from advance
payments adds another $1.650 billion to the total, making it
$84,854,827,200.That's the number you should write down for total aid
to Israel. And that's $14,346 each for each man, woman and child in
Israel.
It's worth noting that that figure does not include U.S. government
loan guarantees to Israel, of which Israel has drawn $9.8 billion to
date. They greatly reduce the interest rate the Israeli government
pays on commercial loans, and they place additional burdens on U.S.
taxpayers, especially if the Israeli government should default on any
of them. But since neither the savings to Israel nor the costs to U.S.
taxpayers can be accurately quantified, they are excluded from
consideration here.
Further, friends of Israel never tire of saying that Israel has never
defaulted on repayment of a U.S. government loan. It would be equally
accurate to say Israel has never been required to repay a U.S.
government loan. The truth of the matter is complex, and designed to
be so by those who seek to conceal it from the U.S. taxpayer.
Most U.S. loans to Israel are forgiven, and many were made with the
explicit understanding that they would be forgiven before Israel was
required to repay them. By disguising as loans what in fact were
grants, cooperating members of Congress exempted Israel from the U.S.
oversight that would have accompanied grants. On other loans, Israel
was expected to pay the interest and eventually to begin repaying the
principal. But the so-called Cranston Amendment, which has been
attached by Congress to every foreign aid appropriation since 1983,
provides that economic aid to Israel will never dip below the amount
Israel is required to pay on its outstanding loans. In short, whether
U.S. aid is extended as grants or loans to Israel, it never returns to
the Treasury.
Israel enjoys other privileges. While most countries receiving U.S.
military aid funds are expected to use them for U.S. arms, ammunition
and training, Israel can spend part of these funds on weapons made by
Israeli manufacturers. Also, when it spends its U.S. military aid
money on U.S. products, Israel frequently requires the U.S. vendor to
buy components or materials from Israeli manufacturers. Thus, though
Israeli politicians say that their own manufacturers and exporters are
making them progressively less dependent upon U.S. aid, in fact those
Israeli manufacturers and exporters are heavily subsidized by U.S.
aid.
Although it's beyond the parameters of this study, it's worth
mentioning that Israel also receives foreign aid from some other
countries. After the United States, the principal donor of both
economic and military aid to Israel is Germany.
By far the largest component of German aid has been in the form of
restitution payments to victims of Nazi attrocities. But there also
has been extensive German military assistance to Israel during and
since the Gulf war, and a variety of German educational and research
grants go to Israeli institutions. The total of German assistance in
all of these categories to the Israeli government, Israeli individuals
and Israeli private institutions has been some $31 billion or $5,345
per capita, bringing the per capita total of U.S. and German
assistance combined to almost $20,000 per Israeli. Since very little
public money is spent on the more than 20 percent of Israeli citizens
who are Muslim or Christian, the actual per capita benefits received
by Israel's Jewish citizens would be considerably higher.
True Cost to U.S. Taxpayers
Generous as it is, what Israelis actually got in U.S. aid is
considerably less than what it has cost U.S. taxpayers to provide it.
The principal difference is that so long as the U.S. runs an annual
budget deficit, every dollar of aid the U.S. gives Israel has to be
raised through U.S. government borrowing.
In an article in the Washington Report for December 1991/January 1992,
Frank Collins estimated the costs of this interest, based upon
prevailing interest rates for every year since 1949. I have updated
this by applying a very conservative 5 percent interest rate for
subsequent years, and confined the amount upon which the interest is
calculated to grants, not loans or loan guarantees.
On this basis the $84.8 billion in grants, loans and commodities
Israel has received from the U.S. since 1949 cost the U.S. an
additional $49,936,880,000 in interest.
There are many other costs of Israel to U.S. taxpayers, such as most
or all of the $45.6 billion in U.S. foreign aid to Egypt since Egypt
made peace with Israel in 1979 (compared to $4.2 billion in U.S. aid
to Egypt for the preceding 26 years). U.S. foreign aid to Egypt, which
is pegged at two-thirds of U.S. foreign aid to Israel, averages $2.2
billion per year.
There also have been immense political and military costs to the U.S.
for its consistent support of Israel during Israel's half-century of
disputes with the Palestinians and all of its Arab neighbors. In
addition, there have been the approximately $10 billion in U.S. loan
guarantees and perhaps $20 billion in tax-exempt contributions made to
Israel by American Jews in the nearly half-century since Israel was
created.
Even excluding all of these extra costs, 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.
Richard Curtiss, a retired U.S. foreign service officer, is the
executive editor of the Washington Report on Middle East Affairs.
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Home > Shington-report.org > Html > WRMEA: U.S. Aid to Israel
...............................................
Imagine what we could do with that money to
fix America.
We give money to Israel to stop a WAR?
Dont we already have a war there?
It aint working.
love
hank
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
Cost to U.S. Taxpayers of U.S.
Aid to Israel
Grand Total
$84,854,827,200
Interest Costs Borne by U.S.
$49,936,680,000
Total Cost to U.S. Taxpayers
$134,791,507,200
Total Taxpayer Cost per Israeli
$23,240
Special Reports:
Congress Watch: A Conservative Total for U.S. Aid to Israel: $91
Billion--and Counting
Congressional Research Report on Israel: US Foreign Assistance by
Clyde Mark (213K pdf file)
U.S. Aid To Israel: The Strategic Functions
U.S. Aid to Israel: What U.S. Taxpayer Should Know
U.S. Aid to Israel: Interpreting the 'Strategic Relationship'
The Cost of Israel to U.S. Taxpayers: True Lies About U.S. Aid to
Israel
THE STRATEGIC FUNCTIONS OF U.S. AID TO ISRAEL
By Stephen Zunes
Dr. Zunes is an assistant professor in the Department of Politics at
the University of San Francisco
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. 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.
Total U.S. aid to Israel is approximately one-third of the American
foreign-aid budget, even though Israel comprises just .001 percent 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 of about $14,000, Israel ranks as the sixteenth
wealthiest country in the world; Israelis enjoy a higher per capita
income than oil-rich Saudi Arabia and are only slightly less well-off
than most Western European countries.
AID does not term economic aid to Israel as development assistance,
but instead uses the term "economic support funding." Given Israel's
relative prosperity, U.S. aid to Israel is becoming increasingly
controversial. In 1994, Yossi Beilen, deputy foreign minister of
Israel and a Knesset member, told the Women's International Zionist
organization, "If our economic situation is better than in many of
your countries, how can we go on asking for your charity?"
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U.S. Aid to Israel: What U.S. Taxpayer Should Know
by Tom Malthaner
This morning as I was walking down Shuhada Street in Hebron, I saw
graffiti marking the newly painted storefronts and awnings. Although
three months past schedule and 100 percent over budget, the renovation
of Shuhada Street was finally completed this week. The project manager
said the reason for the delay and cost overruns was the sabotage of
the project by the Israeli settlers of the Beit Hadassah settlement
complex in Hebron. They broke the street lights, stoned project
workers, shot out the windows of bulldozers and other heavy equipment
with pellet guns, broke paving stones before they were laid and now
have defaced again the homes and shops of Palestinians with graffiti.
The settlers did not want Shuhada St. opened to Palestinian traffic as
was agreed to under Oslo 2. This renovation project is paid for by
USAID funds and it makes me angry that my tax dollars have paid for
improvements that have been destroyed by the settlers.
Most Americans are not aware how much of their tax revenue our
government sends to Israel. For the fiscal year ending in September
30, 1997, the U.S. has given Israel $6.72 billion: $6.194 billion
falls under Israel's foreign aid allotment and $526 million comes from
agencies such as the Department of Commerce, the U.S. Information
Agency and the Pentagon. The $6.72 billion figure does not include
loan guarantees and annual compound interest totalling $3.122 billion
the U.S. pays on money borrowed to give to Israel. It does not include
the cost to U.S. taxpayers of IRS tax exemptions that donors can claim
when they donate money to Israeli charities. (Donors claim
approximately $1 billion in Federal tax deductions annually. This
ultimately costs other U.S. tax payers $280 million to $390 million.)
When grant, loans, interest and tax deductions are added together for
the fiscal year ending in September 30, 1997, our special relationship
with Israel cost U.S. taxpayers over $10 billion.
Since 1949 the U.S. has given Israel a total of $83.205 billion. The
interest costs borne by U.S. tax payers on behalf of Israel are
$49.937 billion, thus making the total amount of aid given to Israel
since 1949 $133.132 billion. This may mean that U.S. government has
given more federal aid to the average Israeli citizen in a given year
than it has given to the average American citizen.
I am angry when I see Israeli settlers from Hebron destroy
improvements made to Shuhada Street with my tax money. Also, it angers
me that my government is giving over $10 billion to a country that is
more prosperous than most of the other countries in the world and uses
much of its money for strengthening its military and the oppression of
the Palestinian people.
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"U.S. Aid to Israel: Interpreting the 'Strategic Relationship"'
by Stephen Zunes
"The U.S. aid relationship with Israel is unlike any other in the
world," said Stephen Zunes during a January 26 CPAP presentation. "In
sheer volume, the amount is the most generous foreign aid program ever
between any two countries," added Zunes, associate professor of
Politics and chair of the Peace and Justice Studies Program at the
University of San Francisco.
He explored the strategic reasoning behind the aid, asserting that it
parallels the "needs of American arms exporters" and the role "Israel
could play in advancing U.S. strategic interests in the region."
Although Israel is an "advanced, industrialized, technologically
sophisticated country," it "receives more U.S. aid per capita annually
than the total annual [Gross Domestic Product] per capita of several
Arab states." Approximately a third of the entire U.S. foreign aid
budget goes to Israel, "even though Israel comprises just...one-
thousandth of the world's total population, and already has one of the
world's higher per capita incomes."
U.S. government officials argue that this money is necessary for
"moral" reasons-some even say that Israel is a "democracy battling for
its very survival." If that were the real reason, however, aid should
have been highest during Israel's early years, and would have declined
as Israel grew stronger. Yet "the pattern...has been just the opposite."
According to Zunes, "99 percent of all U.S. aid to Israel took place
after the June 1967 war, when Israel found itself more powerful than
any combination of Arab armies...."
The U.S. supports Israel's dominance so it can serve as "a surrogate
for American interests in this vital strategic region." "Israel has
helped defeat radical nationalist movements" and has been a "testing
ground for U.S. made weaponry." Moreover, the intelligence agencies of
both countries have "collaborated," and "Israel has funneled U.S. arms
to third countries that the U.S. [could] not send arms to directly,...
Iike South Africa, like the Contras, Guatemala under the military
junta, [and] Iran." Zunes cited an Israeli analyst who said: "'It's
like Israel has just become another federal agency when it's
convenient to use and you want something done quietly."' Although the
strategic relationship between the United States and the Gulf Arab
states in the region has been strengthening in recent years, these
states "do not have the political stability, the technological
sophistication, [or] the number of higher-trained armed forces
personnel" as does Israel.
Matti Peled, former Israeli major general and Knesset member, told
Zunes that he and most Israeli generals believe this aid is "little
more than an American subsidy to U.S. arms manufacturers," considering
that the majority of military aid to Israel is used to buy weapons
from the U.S. Moreover, arms to Israel create more demand for weaponry
in Arab states. According to Zunes, "the Israelis announced back in
1991 that they supported the idea of a freeze in Middle East arms
transfers, yet it was the United States that rejected it."
In the fall of 1993-when many had high hopes for peace-78 senators
wrote to former President Bill Clinton insisting that aid to Israel
remain "at current levels." Their "only reason" was the "massive
procurement of sophisticated arms by Arab states." The letter
neglected to mention that 80 percent of those arms to Arab countries
came from the U.S. "I'm not denying for a moment the power of AIPAC
[the American Israel Public Affairs Committee], the pro-Israel lobby,"
and other similar groups, Zunes said. Yet the "Aerospace Industry
Association which promotes these massive arms shipments...is even more
influential." This association has given two times more money to
campaigns than all of the pro-Israel groups combined. Its "force on
Capitol Hill, in terms of lobbying, surpasses that of even AIPAC."
Zunes asserted that the "general thrust of U.S. policy would be pretty
much the same even if AIPAC didn't exist. We didn't need a pro-
Indonesia lobby to support Indonesia in its savage repression of East
Timor all these years." This is a complex issue, and Zunes said that
he did not want to be "conspiratorial," but he asked the audience to
imagine what "Palestinian industriousness, Israeli technology, and
Arabian oil money...would do to transform the Middle East.... [W]hat would
that mean to American arms manufacturers? Oil companies? Pentagon
planners?"
"An increasing number of Israelis are pointing out" that these funds
are not in Israel's best interest. Quoting Peled, Zunes said, "this
aid pushes Israel 'toward a posture of callous intransigence' in terms
of the peace process." Moreover, for every dollar the U.S. sends in
arms aid, Israel must spend two to three dollars to train people to
use the weaponry, to buy parts, and in other ways make use of the aid.
Even "main-stream Israeli economists are saying [it] is very harmful
to the country's future."
The Israeli paper Yediot Aharonot described Israel as "'the
godfather's messenger' since [Israel] undertake
a godfather who 'always tries to appear to be the owner of some large,
respectable business."' Israeli satirist B. Michael refers to U.S. aid
this way: "'My master gives me food to eat and I bite those whom he
tells me to bite. It's called strategic cooperation." 'To challenge
this strategic relationship, one cannot focus solely on the Israeli
lobby but must also examine these "broader forces as well." "Until we
tackle this issue head-on," it will be "very difficult to win" in
other areas relating to Palestine.
"The results" of the short-term thinking behind U.S. policy "are
tragic," not just for the "immediate victims" but "eventually [for]
Israel itself" and "American interests in the region." The U.S. is
sending enormous amounts of aid to the Middle East, and yet "we are
less secure than ever"-both in terms of U.S. interests abroad and for
individual Americans. Zunes referred to a "growing and increasing
hostility [of] the average Arab toward the United States." In the long
term, said Zunes, "peace and stability and cooperation with the vast
Arab world is far more important for U.S. interests than this alliance
with Israel."
This is not only an issue for those who are working for Palestinian
rights, but it also "jeopardizes the entire agenda of those of us
concerned about human rights, concerned about arms control, concerned
about international law." Zunes sees significant potential in
"building a broad-based movement around it."
The above text is based on remarks, delivered on. 26 January, 2001 by
Stephen Zunes - Associate Professor of Politics and Chair of the Peace
and Justice Studies Program at San Francisco University.
--------------------------------------------------------------------------------
The Cost of Israel to U.S. Taxpayers: True Lies About U.S. Aid to
Israel
By Richard H. Curtiss
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.
In the 1980s, during the tenure of chairman Seymour Reich, who went on
to become chairman of the Conference of Presidents, ADL was found to
have circulated two annual fund-raising letters warning Jewish parents
against allegedly negative influences on their children arising from
the increasing Arab presence on American university campuses.
More recently, FBI raids on ADL's Los Angeles and San Francisco
offices revealed that an ADL operative had purchased files stolen from
the San Francisco police department that a court had ordered destroyed
because they violated the civil rights of the individuals on whom they
had been compiled. ADL, it was shown, had added the illegally prepared
and illegally obtained material to its own secret files, compiled by
planting informants among Arab-American, African-American, anti-
Apartheid and peace and justice groups.
The ADL infiltrators took notes of the names and remarks of speakers
and members of audiences at programs organized by such groups. ADL
agents even recorded the license plates of persons attending such
programs and then suborned corrupt motor vehicles department employees
or renegade police officers to identify the owners.
Although one of the principal offenders fled the United States to
escape prosecution, no significant penalties were assessed. ADL's
Northern California office was ordered to comply with requests by
persons upon whom dossiers had been prepared to see their own files,
but no one went to jail and as yet no one has paid fines.
Not surprisingly, a defecting employee revealed in an article he
published in the Washington Report on Middle East Affairs that AIPAC,
too, has such "enemies" files. They are compiled for use by pro-Israel
journalists like Steven Emerson and other so-called "terrorism
experts," and also by professional, academic or journalistic rivals of
the persons described for use in black-listing, defaming, or
denouncing them. What is never revealed is that AIPAC's "opposition
research" department, under the supervision of Michael Lewis, son of
famed Princeton University Orientalist Bernard Lewis, is the source of
this defamatory material.
But this is not AIPAC's most controversial activity. In the 1970s,
when Congress put a cap on the amount its members could earn from
speakers' fees and book royalties over and above their salaries, it
halted AIPAC's most effective ways of paying off members for voting
according to AIPAC recommendations. Members of AIPAC's national board
of directors solved the problem by returning to their home states and
creating political action committees (PACs).
Most special interests have PACs, as do many major corporations, labor
unions, trade associations and public-interest groups. But the pro-
Israel groups went wild. To date some 126 pro-Israel PACs have been
registered, and no fewer than 50 have been active in every national
election over the past generation.
An individual voter can give up to $2,000 to a candidate in an
election cycle, and a PAC can give a candidate up to $10,000. However,
a single special interest with 50 PACs can give a candidate who is
facing a tough opponent, and who has voted according to its
recommendations, up to half a million dollars. That's enough to buy
all the television time needed to get elected in most parts of the
country.
Even candidates who don't need this kind of money certainly don't want
it to become available to a rival from their own party in a primary
election, or to an opponent from the opposing party in a general
election. As a result, all but a handful of the 535 members of the
Senate and House vote as AIPAC instructs when it comes to aid to
Israel, or other aspects of U.S. Middle East policy.
There is something else very special about AIPAC's network of
political action committees. Nearly all have deceptive names. Who
could possibly know that the Delaware Valley Good Government
Association in Philadelphia, San Franciscans for Good Government in
California, Cactus PAC in Arizona, Beaver PAC in Wisconsin, and even
Icepac in New York are really pro-Israel PACs under deep cover?
Hiding AIPAC's Tracks
In fact, the congressmembers know it when they list the contributions
they receive on the campaign statements they have to prepare for the
Federal Election Commission. But their constituents don't know this
when they read these statements. So just as no other special interest
can put so much "hard money" into any candidate's election campaign as
can the Israel lobby, no other special interest has gone to such
elaborate lengths to hide its tracks.
Although AIPAC, Washington's most feared special-interest lobby, can
hide how it uses both carrots and sticks to bribe or intimidate
members of Congress, it can't hide all of the results.
Anyone can ask one of their representatives in Congress for a chart
prepared by the Congressional Research Service, a branch of the
Library of Congress, that shows Israel received $62.5 billion in
foreign aid from fiscal year 1949 through fiscal year 1996. People in
the national capital area also can visit the library of the U.S.
Agency for International Development (USAID) in Rosslyn, Virginia, and
obtain the same information, plus charts showing how much foreign aid
the U.S. has given other countries as well.
Visitors will learn that in precisely the same 1949-1996 time frame,
the total of U.S. foreign aid to all of the countries of sub-Saharan
Africa, Latin America and the Caribbean combined was $62,497,800,000--
almost exactly the amount given to tiny Israel.
According to the Population Reference Bureau of Washington, DC, in
mid-1995 the sub-Saharan countries had a combined population of 568
million. The $24,415,700,000 in foreign aid they had received by then
amounted to $42.99 per sub-Saharan African.
Similarly, with a combined population of 486 million, all of the
countries of Latin America and the Caribbean together had received
$38,254,400,000. This amounted to $79 per person.
The per capita U.S. foreign aid to Israel's 5.8 million people during
the same period was $10,775.48. This meant that for every dollar the
U.S. spent on an African, it spent $250.65 on an Israeli, and for
every dollar it spent on someone from the Western Hemisphere outside
the United States, it spent $214 on an Israeli.
Shocking Comparisons
These comparisons already seem shocking, but they are far from the
whole truth. Using reports compiled by Clyde Mark of the Congressional
Research Service and other sources, freelance writer Frank Collins
tallied for theWashington Report all of the extra items for Israel
buried in the budgets of the Pentagon and other federal agencies in
fiscal year 1993.Washington Report news editor Shawn Twing did the
same thing for fiscal years 1996 and 1997.
They uncovered $1.271 billion in extras in FY 1993, $355.3 million in
FY 1996 and $525.8 million in FY 1997. These represent an average
increase of 12.2 percent over the officially recorded foreign aid
totals for the same fiscal years, and they probably are not complete.
It's reasonable to assume, therefore, that a similar 12.2 percent
hidden increase has prevailed over all of the years Israel has
received aid.
As of Oct. 31, 1997 Israel will have received $3.05 billion in U.S.
foreign aid for fiscal year 1997 and $3.08 billion in foreign aid for
fiscal year 1998. Adding the 1997 and 1998 totals to those of previous
years since 1949 yields a total of $74,157,600,000 in foreign aid
grants and loans. Assuming that the actual totals from other budgets
average 12.2 percent of that amount, that brings the grand total to
$83,204,827,200.
But that's not quite all. Receiving its annual foreign aid
appropriation during the first month of the fiscal year, instead of in
quarterly installments as do other recipients, is just another special
privilege Congress has voted for Israel. It enables Israel to invest
the money in U.S. Treasury notes. That means that the U.S., which has
to borrow the money it gives to Israel, pays interest on the money it
has granted to Israel in advance, while at the same time Israel is
collecting interest on the money. That interest to Israel from advance
payments adds another $1.650 billion to the total, making it
$84,854,827,200.That's the number you should write down for total aid
to Israel. And that's $14,346 each for each man, woman and child in
Israel.
It's worth noting that that figure does not include U.S. government
loan guarantees to Israel, of which Israel has drawn $9.8 billion to
date. They greatly reduce the interest rate the Israeli government
pays on commercial loans, and they place additional burdens on U.S.
taxpayers, especially if the Israeli government should default on any
of them. But since neither the savings to Israel nor the costs to U.S.
taxpayers can be accurately quantified, they are excluded from
consideration here.
Further, friends of Israel never tire of saying that Israel has never
defaulted on repayment of a U.S. government loan. It would be equally
accurate to say Israel has never been required to repay a U.S.
government loan. The truth of the matter is complex, and designed to
be so by those who seek to conceal it from the U.S. taxpayer.
Most U.S. loans to Israel are forgiven, and many were made with the
explicit understanding that they would be forgiven before Israel was
required to repay them. By disguising as loans what in fact were
grants, cooperating members of Congress exempted Israel from the U.S.
oversight that would have accompanied grants. On other loans, Israel
was expected to pay the interest and eventually to begin repaying the
principal. But the so-called Cranston Amendment, which has been
attached by Congress to every foreign aid appropriation since 1983,
provides that economic aid to Israel will never dip below the amount
Israel is required to pay on its outstanding loans. In short, whether
U.S. aid is extended as grants or loans to Israel, it never returns to
the Treasury.
Israel enjoys other privileges. While most countries receiving U.S.
military aid funds are expected to use them for U.S. arms, ammunition
and training, Israel can spend part of these funds on weapons made by
Israeli manufacturers. Also, when it spends its U.S. military aid
money on U.S. products, Israel frequently requires the U.S. vendor to
buy components or materials from Israeli manufacturers. Thus, though
Israeli politicians say that their own manufacturers and exporters are
making them progressively less dependent upon U.S. aid, in fact those
Israeli manufacturers and exporters are heavily subsidized by U.S.
aid.
Although it's beyond the parameters of this study, it's worth
mentioning that Israel also receives foreign aid from some other
countries. After the United States, the principal donor of both
economic and military aid to Israel is Germany.
By far the largest component of German aid has been in the form of
restitution payments to victims of Nazi attrocities. But there also
has been extensive German military assistance to Israel during and
since the Gulf war, and a variety of German educational and research
grants go to Israeli institutions. The total of German assistance in
all of these categories to the Israeli government, Israeli individuals
and Israeli private institutions has been some $31 billion or $5,345
per capita, bringing the per capita total of U.S. and German
assistance combined to almost $20,000 per Israeli. Since very little
public money is spent on the more than 20 percent of Israeli citizens
who are Muslim or Christian, the actual per capita benefits received
by Israel's Jewish citizens would be considerably higher.
True Cost to U.S. Taxpayers
Generous as it is, what Israelis actually got in U.S. aid is
considerably less than what it has cost U.S. taxpayers to provide it.
The principal difference is that so long as the U.S. runs an annual
budget deficit, every dollar of aid the U.S. gives Israel has to be
raised through U.S. government borrowing.
In an article in the Washington Report for December 1991/January 1992,
Frank Collins estimated the costs of this interest, based upon
prevailing interest rates for every year since 1949. I have updated
this by applying a very conservative 5 percent interest rate for
subsequent years, and confined the amount upon which the interest is
calculated to grants, not loans or loan guarantees.
On this basis the $84.8 billion in grants, loans and commodities
Israel has received from the U.S. since 1949 cost the U.S. an
additional $49,936,880,000 in interest.
There are many other costs of Israel to U.S. taxpayers, such as most
or all of the $45.6 billion in U.S. foreign aid to Egypt since Egypt
made peace with Israel in 1979 (compared to $4.2 billion in U.S. aid
to Egypt for the preceding 26 years). U.S. foreign aid to Egypt, which
is pegged at two-thirds of U.S. foreign aid to Israel, averages $2.2
billion per year.
There also have been immense political and military costs to the U.S.
for its consistent support of Israel during Israel's half-century of
disputes with the Palestinians and all of its Arab neighbors. In
addition, there have been the approximately $10 billion in U.S. loan
guarantees and perhaps $20 billion in tax-exempt contributions made to
Israel by American Jews in the nearly half-century since Israel was
created.
Even excluding all of these extra costs, 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.
Richard Curtiss, a retired U.S. foreign service officer, is the
executive editor of the Washington Report on Middle East Affairs.
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Home > Shington-report.org > Html > WRMEA: U.S. Aid to Israel
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Imagine what we could do with that money to
fix America.
We give money to Israel to stop a WAR?
Dont we already have a war there?
It aint working.
love
hank
