Wednesday, June 9, 2010

US Bankrupt but still Gives Well to Support Israeli Aparthied

Seems like it would behoove Israel to keep "the terror" going for as long as there is trouble with Islamic "terrorist," the US money keeps flowing!

In February 2003, for the first time, Congress voted to cut aid to Israel against the wishes of the pro-Israel lobby and the government of Israel. The 0.65 percent deduction was not aimed at Israel; however, it was an across the board cut of all foreign aid programs for fiscal year 2003. The lobby and government also suffered a defeat when Congress deleted an administration request for an extra $200 million to help Israel fight terrorism. Even while cutting aid to Israel (which still was budgeted at $2.1 billion for military aid and $600 million for economic assistance), Congress included a number of provisions in the aid bill viewed as favorable to Israel, including a provision that bars federal assistance to a future Palestinian state until the current Palestinian leadership is replaced, and that state demonstrates a commitment to peaceful coexistence with Israel, and takes measures to combat terrorism.

The setbacks were also temporary as the Administration approved a supplementary aid request in 2003 that included $1 billion in FMF and $9 billion in loan guarantees to aid Israel's economic recovery and compensate for the cost of military preparations associated with the war in Iraq. One quarter of the FMF is a cash grant and three quarters will be spent in the United States. The loan guarantees are spread over three years and must be spent within Israel's pre-June 1967 borders. Each year, an amount equal to the funds Israel spends on settlements in the territories will be deducted from the loan amount, along with all fees and subsidies.

Altogether, since 1949, Israel has received more than $106 billion in assistance. This includes the four special allocations, the $10 billion in loan guarantees (spread over five years) approved in 1992, the $9 billion in guarantees offered in 2003, and a variety of other smaller assistance-related accounts, such as refugee resettlement (nearly $1.6 billion overall since 1973), the American Schools and Hospitals Abroad Program (ASHA), which supports schools, libraries and medical centers that demonstrate American ideas and practices (($144 million), and cooperative development programs (a total of $186 million since 1981).

The total does not include funds for joint military projects like the Arrow missile (for which Israel has received more than $1 billion in grants since 1986), which are provided through the Defense budget. President Bush requested $60 million for the Arrow for FY2003 and $136 million in FY2004. The United States also has provided $53 million for the Boost Phase Intercept program and $139 million for the Tactical High Energy Laser program under development in Israel to complement the Arrow.

Though the totals are impressive, the value of assistance to Israel has been eroded by inflation. While aid levels remained constant in total dollars from 1987 until 1999, the real value steadily declined. On the other side of the coin, Israel does receive aid on more favorable terms than other nations. For example, all economic aid is given directly to the Israeli government rather than allocated under a specific program. Also, starting in 1982, Israel began to receive all its economic aid in a lump sum early in the fiscal year instead of in quarterly installments as is done for other countries. Israel also receives offsets on FMS purchases (U.S. contractors agree to offset some of the cost of military equipment by buying components or materials from Israel).

A 10-Year Military Aid Agreement
In August 2007, the Bush Administration agreed to increase U.S. military assistance to Israel by $6 billion over the following decade. Israel is to receive incremental annual increases of $150 mllion, starting at $2.55 billion in FY2009 and reaching $3.15 billion per year for FY2013-2018.

The Second 10-Year Plan: Proposed U.S. Military Aid to Israel

2009 $2.55 billion
2010 $2.70 billion
2011 $2.85 billion
2012 $3.00 billion
2013-2018 $3.15 billion per year

Israel receives the FMF aid in a lump sum in the first month of the fiscal year. The funds are placed in an interest bearing account and that interest is used to pay down Israel’s debt to the United States, which was $1 billion as of December 2006.

In addition to FMF, Israel also receives money for the joint development of missile defense systems. These amounts have been growing over the years, with the bulk of the funding going to the Arrow program.

Defense Budget Appropriations for U.S.-Israeli Missile Defense

($ millions)

System Type 2006 2007 2008 2009 2010
Short-Range (David's Sling) $10.0 $20.4 $37.0 $72.895 $80.092
Arrow (Arrow-2) $122.866 $117.494 $98.572 $74.342 $72.306
High Altitude (Arrow-3) $20.0 $30.0 $50.036
Total $132.866 $137.894 $155.572 $177.237 $202.434

See also the U.S. Assistance to Israel table.


Sources: Clyde Mark, Israel: U.S. Foreign Assistance, (DC: Congressional Research Service, 1997-2003); JTA, (February 27, 2003), Congressional Budget Justification for FY06 Foreign Operations (March 2005)

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