
The Israel Lobby wants to revamp US aid to Israel by permanently ensnaring the Pentagon in a "partnership" with the Jewish state involving opaque contracts and minimal oversight and accountability, the Quincy Institute reports.
From The Quincy Institute, "The Disappearing Aid Check: The Future of USIsrael Defense Support":
The United States and Israel are now approaching the renegotiation of their 10-year defense Memorandum of Understanding, or MOU. Israeli officials have said they want to phase out US military grant aid a position that sounds like a step toward ending US military assistance to Israel. It is not.
What top Israeli officials including Prime Minister Benjamin Netanyahu are quietly backing is not a reduction in American support, but a reorganization of it: shifting billions in resources from State Departmentadministered foreign aid grants into general Pentagon procurement accounts, industrial partnerships, and sustainment pipelines. The shift will strip away the political and diplomatic oversight mechanisms that make the relationship publicly accountable, moving it from a visible annual aid vote into the opaque machinery of defense acquisition, where oversight is limited and political accountability is minimal. The result would be a defense relationship that is simultaneously deeper and less transparent.
Since fiscal year 2019, the United States has provided $3.3 billion per year in Foreign Military Financing, or FMF, grants to Israel, plus an additional $500 million per year for missile defense cooperation. About 25 percent of this FMF grant money has gone toward offshore procurement, or OSP, funds allocated to Israel to spend domestically on its own defense industry and military equipment. Effectively, it is a US subsidy for Israels military industrial complex.
This OSP precedent is slated to end with the expiration of the current MOU. This has fueled Israeli proposals to phase out FMF grants altogether, replacing them with a relationship centered on USIsraeli defense integration. This would embed Israeli firms and Israeliorigin intellectual property inside larger Pentagon programs and production. Unlike the foreign assistance process, the military procurement framework would not be subject to the political scrutiny of Congress and the State Department, but would be evaluated on bureaucratic criteria such as cost, readiness, and capability. This shift would likely be justified by reframing US support not as a handout to Israel, but as an investment in American military readiness, industrial capacity, and jobs.
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The post-2028 USIsrael defense relationship will likely be recast to reduce its political profile. The annual aid vote, one of the most predictably contentious moments in future US foreign-policy debates, may fade away, replaced by procurement decisions that attract little public attention and even less organized opposition. Israeli officials will be able to claim, accurately in formal terms, that Israel no longer receives American aid. American officials will be able to defend the spending as investment in US readiness rather than largesse to a foreign partner.
None of that makes the relationship smaller. The financial flows may be as large as or larger than the current baseline, depending on how procurement portfolios scale and how sustainment tails develop. The strategic coupling will deepen. The industrial interdependencies will become harder and more costly to unwind. And the mechanisms that once, however imperfectly, provided political leverage and diplomatic accountability will have been dismantled and replaced with something that operates on entirely different terms.
For observers trying to understand USIsrael relations, the practical implication is methodological. The aid vote is no longer the right place to look. Instead, the key data will be located in the procurement budget, industrial-base investments, sustainment pipeline, IP licensing arrangements, and workshare provisions. The consequential decisions will be made in those domains. As I noted earlier this month, Netanyahu alluded to this new special relationship in his recent CBS News interview (which was deceptively edited under editor-in-chief Bari Weiss to only have Netanyahu saying he wants to "draw down" US aid):
The partnership the Quincy Institute describes is far worse than our current arrangement -- which could potentially end in a few years or so with a simple vote in Congress.
They've known for over a year now this was coming and they've been planning for the shift. The Trump administration and our AIPAC-owned Congress are going to be working overtime to tie this Israeli albatross around our neck.
Trump's son Eric's construction firm even recently merged with an Israeli killer drone company to take it public on the New York Stock Exchange.
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