The U.S. and Israeli governments signed a 10-year agreement that will increase foreign aid funding for Israel, increasing American military aid over the next decade by as much as $700 million per year.
The memorandum of understanding was signed in September by Jacob Nagel, Israel’s acting national security chief, and officials representing the U.S. Department of State.
The memorandum increases foreign military aid to the Middle Eastern democratic country from $3.1 billion in annual payments to a maximum of $3.8 billion per year. Foreign military aid and economic assistance for all countries accounts for about 0.92 percent of all federal government spending.
Dollars and Sense
Jonathan Bydlak, president of the Coalition to Reduce Spending, says small spending hikes, such as the foreign aid agreement, add up to big budget deficits.
“In the grand scheme of the federal government, this is small potatoes,” Bydlak said. “Foreign aid only makes up 1 percent of the federal budget, so you can say that this doesn’t really matter from a spending standpoint. However, the way you get a deficit is through spending on a lot of ‘1-percent items.'”
Calls for Cost-Benefit Analyses
Bydlak says lawmakers should consider the cost of increasing government spending.
“Obviously, there are geopolitical concerns that drive these type of foreign aid decisions, but I do think that many Americans are right to question why we are giving money abroad,” Bydlak said. “We shouldn’t be acting like that these spending decisions won’t have real costs. We should recognize the tradeoff that if we want to add additional spending, then we should make cuts elsewhere.”
‘A Little Strange’
Doug Bandow, a senior fellow at the Cato Institute, says he questions the logic of borrowing money to give to other countries.
“It is a little strange for the United States to give foreign aid at a time when it has to borrow hundreds of billions of dollars,” Bandow said. “There is an oddity there, in borrowing money to give it to countries. Israel is quite prosperous. It is also a regional superpower, so it is hard to see why they need foreign aid.”
Bandow says some people in Israel are also questioning the foreign aid deal.
“There are also Israelis who don’t believe it is necessary,” Bandow said. “They point out that U.S. foreign aid is meant to be spent on American weapons, so it limits Israeli flexibility in terms of its own defense.”