Much is made of the $3.8 billion annual subsidy Israel’s military currently receives from the U.S. Little if anything is ever said of the far greater in-kind annual subsidy—estimated at tens of billions of dollars—that Israel has provided the U.S. over decades.
Israel’s subsidy to the United States isn’t readily quantified because no one attaches dollars and cents to the upshot of the close working relationship between the countries’ militaries—the closest it’s ever been, as stated by their military leaders and seen by last year’s largest-ever joint military exercise involving naval, land, air, space and cyber-warfare elements.
Informal estimates, however, speak to the extent of the Israeli contribution. According to the U.S. aerospace industry, America has been the beneficiary of billions of dollars thanks to more than 700 Israeli upgrades to the F-16 fighter jet and numerous others to the F-15. The U.S. windfall from Israeli arms technology is, in fact, ubiquitous and literally incalculable, reaching into every area where the two militaries interact.
A high-profile case in point involves the Iron Dome, an Israeli invention that is now manufactured in the United States and used by the U.S. military as part of its missile-defense system. When President Ronald Reagan first proposed his Strategic Defense Initiative in 1983, it was mocked as “Star Wars” and, many billions later, abandoned by President Bill Clinton. The Iron Dome, along with Israel’s other state-of-the-art missile-defense systems, now enables the U.S. and NATO to meet military goals that had long evaded them.
The provision of intelligence services to the United States may represent Israel’s greatest contribution.
The late Daniel Inouye, former Chairman of the Senate Select Committee on Intelligence, said: “Israel’s contribution to US military intelligence is greater than all NATO countries combined.”
According to retired Air Force intelligence chief General George F. Keagan, “The ability of the U.S. Air Force in particular and the Army, in general, to defend whatever position it has in NATO owes more to the Israeli intelligence input than it does to any other single source of intelligence, be it satellite reconnaissance, be it technology intercept, or what have you. He added: “I could not have procured the intelligence … with five CIAs.”
The CIA’s annual budget today, according to leaked information from Edward Snowden, exceeds $14 billion. Since the U.S. Air Force likely utilizes Israeli intelligence at least as much now as before, the subsidy that Israeli intelligence imparts to the U.S. military could exceed $70 billion per year.
Another estimate of Israel’s military contribution came from Alexander Haig, then U.S. Secretary of State, formerly NATO’s Supreme Commander, who estimated that Israel saved Washington $15 billion annually by granting the United States the use of its strategic location in the Middle East.
“Israel is the largest American aircraft carrier in the world that cannot be sunk, does not carry even one American soldier and is located in a critical region for American national security,” he stated.
Both countries, of course, benefit immensely from their military and security cooperation, but the support for Israel is hardly extraordinary. The U.S. more heavily subsidizes Israel’s adversaries and much more heavily subsidizes Ukraine’s military.
Meanwhile, Israel’s benefit to America is often taken for granted. U.S. Air Force planes refuel at Israeli bases, U.S. Navy ships dock in Haifa and the U.S. Department of Defense pre-positions $1.2 billion in arms and medical equipment in Israel to shorten the supply lines needed for its own troops or those of its allies.
Over the past year, Israel and Ukraine have both drawn from those stocks. In Israel’s case, it not only pays for the weapons it pulls from this stockpile for its own use, but it also pays 90% of the costs of maintaining this U.S. military facility on Israeli territory. Moreover, because Israel’s $3.8 billion aid package comes with strings attached—almost the whole of it must be spent in the United States—it also acts as a subsidy to U.S. arms manufacturers.
In foreign policy, former President Donald Trump has often complained that other countries take advantage of the United States, whether by failing to meet their NATO obligations or by paying too little for American troops stationed abroad for their protection. As a remedy, he has sought reciprocal relationships and a balanced playing field, often by treating foreign alliances on a transactional, businesslike basis.
A more businesslike relationship between Washington and Jerusalem would serve both countries well. If Israel and the United States each purchased material and services from the other at market prices rather than relying on mutual largesse, enemies of America would lose one of their most effective rhetorical weapons: the accusation that the “Israel Lobby” controls Congress to wring financial concessions that are then used to oppress Palestinian Arabs. The United States would instead be seen as profiting financially from its military sales to Israel.
Israel would likewise avoid opprobrium for being “subsidized” by the U.S. and, to the perturbation of its critics, be the richer for it.
