When Israeli Prime Minister Benjamin Netanyahu told The Economist, “I want to taper off the military aid within the next 10 years”—and confirmed that he meant tapering it “to zero”—the reaction should have been disbelief. To borrow Dr. Phil’s immortal line: What were you thinking?
Why would any Israeli prime minister kick the ball into his own net by voluntarily surrendering roughly $40 billion in U.S. military assistance, which underwrites Israel’s qualitative military edge and anchors bipartisan American support?
Israel’s current 10-year memorandum of understanding, which provides $3.8 billion annually, expires in 2028. Until Netanyahu’s remark, the assumption in Washington was that negotiations for renewal would begin soon. Instead, his declaration jolted Capitol Hill. Sen. Lindsey Graham (R-S.C.), a stalwart Israel ally and chair of a key subcommittee overseeing foreign aid, promptly suggested that he was ready “to dramatically expedite the timetable.”
Netanyahu may have hastened the very outcome he claims to want without securing anything in return.
The impulse behind Netanyahu’s comments isn’t hard to understand. Israel’s war on multiple fronts exposed the risks of dependence on foreign suppliers of arms and other material. Former President Joe Biden, though broadly supportive, was not the first U.S. president to delay or restrict arms deliveries to Israel, but he was the most recent reminder that even close allies can impose limits. European embargoes drove the point home further: Israel cannot assume uninterrupted access to the weapons it needs.
That reality explains Israel’s push to expand domestic arms production and Netanyahu’s pledge to spend $110 billion on defense in the next decade. While sensible given the environment, the next election may test whether the Israeli public will support a policy that will have a deleterious impact on the day-to-day welfare of Israelis. That money must come from higher taxes, reduced social services or both at a time when Israel already spends an extraordinary share of its Gross Domestic Product on defense (8.8% in 2024, among the highest in the world).
Ironically, one of the enduring failures surrounding U.S. aid is how poorly its benefits have been explained to Americans. Military assistance to Israel accounts for less than 1% of the federal budget, yet Israel and its advocates have done little to show how that money flows back into American communities. When Israel buys F-15 fighter jets, the funds do not stop at a Boeing plant in St. Louis; they ripple through thousands of subcontractors across dozens of states, supporting tens of thousands of jobs. The Saudis mastered this argument during the AWACS debate decades ago. Israel and AIPAC should have done the same—tracking every dollar to demonstrate local impact.
Even in that case, however, it faces headwinds. Images of destruction caused by U.S.-supplied weapons dominate headlines and fuel progressive opposition. With the notable exception of the pause on 2,000-pound bombs, Biden largely resisted that pressure. A future president may not. That reality argues for smarter diplomacy and clearer messaging, not for unilaterally abandoning aid.
There is also a stark practical problem. Israel’s air superiority—the backbone of its military power—rests on U.S.-supplied aircraft. Unlike Saudi Arabia, which can simply write checks, Israel would need to divert billions from other priorities to maintain its edge. Israel’s $3 billion purchase of 25 F-35s is affordable only because of U.S. assistance. Israel’s $35 billion defense budget can absorb such costs, but only by squeezing other needs.
Israel once demonstrated the ability to build its own advanced fighters, the Kfir and the Lavi. Both faced political obstacles in Washington. The United States blocked exports of the Kfir because it used American engines; the Lavi—so capable it threatened to compete with U.S. aircraft—was ultimately scrapped as too expensive, with the Israeli Air Force preferring proven American platforms. Israelis have the know-how to produce their own plane, but the cost would be prohibitive, and the IAF is committed to purchasing additional F-15s and F35s.
According to the Congressional Research Service, U.S. aid accounts for about 14% of Israel’s defense budget. Equally important, Foreign Military Financing supports Israel’s defense industry itself. When the last Memorandum of Understanding was signed in 2018, Israel was allowed to spend 25% of that aid domestically through Off-Shore Procurement. That share is already below 15% and will fall to zero by FY2028.
As CRS notes, Israeli firms have responded by merging with U.S. companies or opening American subsidiaries to remain eligible. Ending aid without compensation would further damage Israeli defense contractors and jeopardize joint projects like the Arrow missile-defense system.
So why propose giving up what is, in effect, heavily subsidized access to the world’s best weapons and integration with the U.S. defense ecosystem?
According to Globes, the timing may be linked to tariff negotiations with the Trump administration. After Trump imposed a 15% tariff on Israeli goods, even after Israel lifted its own tariffs on U.S. products, Jerusalem hopes to win broader exemptions. Netanyahu may also believe that appealing to Trump’s transactional instincts by relinquishing aid will yield political dividends on Gaza or other issues. As Globes put it, “The ability to present an ally that willingly foregoes billions strengthens the ‘America First’ narrative.”
Jewish Insider had a different take, reporting that when Netanyahu floated the idea late last year, Trump was “bewildered” and initially unsupportive. Netanyahu pressed ahead anyway, reportedly at the urging of his close adviser and expert on American politics, Ron Dermer, who believes that cutting aid would improve Israel’s image. If so, it reflects a profound misreading of the political environment. Israel’s image problem is not the aid; it is Israeli policy—and Netanyahu himself. Congress remains overwhelmingly pro-Israel, as shown by last week’s 341-79 House vote approving aid.
If Jerusalem truly wants to repair its standing, abandoning U.S. assistance will not do it. Netanyahu’s own unpopularity has become a liability, and policy choices, especially toward the Palestinians, shape perceptions far more than the size of foreign military aid.
Would it require taking positions, such as accepting a Palestinian state, that are unthinkable in the present environment? Not necessarily, since a bare majority (55% in the last Gallup poll) of Americans support one. Israel must, however, dispel the view that it has no interest in peace, in addition to the perception, particularly among the young, that it is doing nothing but killing innocent Palestinian children. Giving up aid changes none of that.
Meanwhile, Netanyahu should admit his mistake and focus on negotiating a new memorandum that maintains or increases aid levels while investing simultaneously in Israeli manufacturing capacity. Build redundancy and alternatives while keeping the partnership that has underpinned Israeli security for decades.
Israel is right to pursue greater self-sufficiency in arms production. It is wrong to pretend that requires forfeiting tens of billions of dollars that secure its military edge, sustain its defense industry and reinforce the U.S.-Israel alliance. Netanyahu’s proposal is not strategic independence; it is an unnecessary self-inflicted wound.
