Inside The U.S. $38 Billion 10-Year Gift to Israel

by James M. Wallobama-at-un

It is no surprise that the guaranteed $38 billion gift from U.S. taxpayers to Israel over the next ten years was not discussed Wednesday when President Obama and Prime Minister Netanyahu met at New York’s Lotte New York Palace Hotel.

The $38 billion gift was not discussed in the meeting because it was already a done deal, which Netanyahu hated.

Because the U.S. mainline media does such an ineffective job of covering anything to do with what Israel likes or dislikes, the $38 billion ten-year deal was made to look like Obama had caved in to Netanyahu.

That was not the case. Nehemiah Shtrasler wrote in an opinion piece in Ha’aretz that far from being an Israeli triumph, the $38 billion agreement was not that big a deal. It was, instead, filled with caveats Netanyahu fought against.

Shtrasler explains that both leaders were smiling through their pro forma meeting, “but Obama will be enjoying the last laugh. He has waited a long time for this moment, and now he’s ready to serve his revenge to Netanyahu, cold as ice.”

[Obama] can’t — and doesn’t want to — forget Netanyahu’s insults, from failing to fulfill his promises to resume negotiations with the Palestinians, to continuing to build in the territories in order to torpedo any possibility of a two-state solution, to that boorish speech in Congress last year against Obama’s Iranian nuclear deal. Now Netanyahu is paying for all of that, big time.

To an American public fed a steady pro-Israel diet, this sounds, well, impossible.

Anticipating this incredulous response, Shtrasler writes:

Let’s start with the numbers. In the last 10 years, Israel has received $3.1 billion a year from the United States, plus the cost of developing anti-ballistic missiles. Altogether, the aid has come to $3.5 billion a year. The new amount, $3.8 billion a year, is significantly lower in real terms.

It’s not worth more than $3.2 billion a year, according to a capitalization rate of 20 percent over 10 years. Therefore, in real terms American aid to Israel has diminished, not increased — in contrast to what Netanyahu says.

Israel was not getting the massive payout the U.S. media claimed, with stories that sent conservatives into ecstasy and progressives into apoplexy. Netanyahu was demanding a much larger annual gift, which his rich Daddy would not give him.

Then there was an even heavier blow. Netanyahu and his negotiating team delayed accepting the U.S. ten-year offer because of a more obviously distressing clause that affected Israel’s arms industry, a major money-maker for Israel’s economy.

The bigger blow lies in the exclusion of Israel’s defense industries. Until now, Israel could convert 26 percent of the aid into shekels (which worked out to about $800 million a year) and use the money to order equipment from Israeli military companies. The new agreement phases out that agreement, which is a rough deal for the big defense companies, and a deathblow for dozens of smaller companies and the subcontractors of the big companies.

The third clause that angered Netanyahu is the one that Shtrasler describes as the one “designed to be personally anti-Netanyahu: the humiliation.”

This is the article forbidding Israel to ask Congress for any more aid, of any type, for two years. If Congress does decide to add some, Israel will have to repay the money posthaste.

A clear Israel supporter, Republican Sen. Lindsey Graham (S.C.) asked Netanyahu how he could agree to an agreement that “neuters” Congress. Netanyahu didn’t answer. He knew he not only had to neutralize all his friends in Congress: he had to shear the locks of the AIPAC lobby and ambassador Ron Dermer. Look how far Obama’s vengeance has reached.

Wait, there is even more, a final humiliating blow demanded by Obama.

Yet all of this pales compared with the strategic damage inherent in the agreement. It has no accords on cooperating against Iran, which will have the capacity to manufacture nuclear bombs in 10 years’ time. It does not expand the collaboration on science, technology and intelligence.

It does not provide Israel with advanced fighting systems to preserve its qualitative advantage in the region. That is why it’s a bad deal. Clearly, a better one could have been achieved if Netanyahu hadn’t bitten the hand that feeds us [Israel], time and again.

The ten-year agreement is new. Previously, a three-year agreement has been renewed automatically by a subservient Congress. This new ten-year agreement was negotiated for ten months and signed well before Obama arrived in New York to address the UN.

UPDATE: This week a group of U.S. Senators announced they had introduced new legislation to remove the tight controls which President Obama included in the agreement. Reuters reports:

Senators Lindsey Graham, Kelly Ayotte, John McCain and Ted Cruz {all Republican senators] told a news conference they had filed a measure to give Israel an additional $1.5 billion in military aid, while renewing U.S. sanctions on Iran.

Republican Senators Mark Kirk, Marco Rubio and Roy Blunt also co-sponsored the bill introduced on Tuesday.

The Obama speech demands an exegesis. Ha’aretz provides one in an analysis of the speech by Chemi Shalev:

Barack Obama’s farewell address to the United Nations General Assembly Tuesday was starkly anti-Israeli, or at least the antithesis of the current Israeli zeitgeist. Not because of his praise for the Iran nuclear deal or his token words of condemnation of settlements and occupation, but in the deeper layers of his speech; in his shameless promotion of universal values, in the presentation of his vision as the presumptive leader of the free world, with emphasis on the word “free.”

It was an optimistic and hopeful speech that dwelled on the cup half-full, which Israeli politicians prefer to portray as 90 per cent empty.

Cheri Shalev concluded his analysis of Obama’s UN speech on an upbeat note:

Obama said that deep religious convictions should not sanctify discrimination against women or prevent children from learning mathematics and science, (as they do throughout Israel’s independent ultra-Orthodox school system.) When he spoke about authoritarian leaders who foster division and understand only force, our analysts told us, without batting an eyelid, that he meant Vladimir Putin.

And when Obama coined the sentence for which the speech will be remembered, “A nation ringed by walls will only imprison itself”, the commentators said, without a hint of self-irony, that he was talking about Donald Trump.

Was he speaking of Trump’s wall or, far more likely in a speech to the United Nations, was he referring to Israel’s “security” wall?bbc-news-co

Barack Obama will have seven weeks and three days left in office between November 8 and January 20, 2017. What will he do with that time?

Barak Ravid, suggests in Ha’aretz, that Netanyahu fears that President Obama has one final speech he will give to the United Nations.

It is the speech in which Obama will try to leave a lasting legacy on the Israeli-Palestinian issue by laying down principles for resolving all the core issues: borders, refugees, security and, above all, Jerusalem.

Netanyahu’s fear is that once such a speech is given, the road to turning it into a UN Security Council resolution will be short.

That is why the pro-Israel lobby AIPAC has worked hard over the past few weeks, apparently at the urging of Israeli ambassador to the U.S. Ron Dermer, to recruit senators from both parties to sign a letter to Obama on this issue.

Of the 100 senators, 88 ultimately signed the letter, which was sent to Obama on Monday. To achieve this impressive number of signatories, it was necessary to make the letter’s wording sufficiently vague.

No letter will deter this outgoing President who has demanded that Bibi Netanyahu accept U.S. conditions to continue to receive essentially the same annual gift the tax-payers have been sending him.

In a final UN speech Obama will find a receptive audience of nations eager to end a senseless occupation that has stirred so much anger, suffering and hatred in the Middle East.

Knowing this, Barack Obama is acting like a President who “will not go gentle into this dark night”.

The picture above is President Obama speaking Tuesday at the United Nations General Assembly. It is from Ha’aretz, taken by Kevin Lamarque of Reuters. The wall picture in Palestine is from

About wallwritings

From 1972 through 1999, James M. Wall was editor and publisher of the Christian Century magazine, based in Chicago, lllinois. He was a Contributing Editor of the Century from 1999 until July, 2017. He has written this blog, wall, since it was launched April 27, 2008. If you would like to receive Wall Writings alerts when new postings are added to this site, send a note, saying, Please Add Me, to Biography: Journalism was Jim's undergraduate college major at Emory University, Atlanta, Georgia. He has earned two MA degrees, one from Emory, and one from the University of Chicago, both in religion. He is an ordained United Methodist clergy person. He served for two years in the US Air Force, and three additional years in the USAF reserve. While serving on active duty with the Alaskan Command, he reached the rank of first lieutenant. He has worked as a sports writer for both the Atlanta Journal and Constitution, was editor of the United Methodist magazine, Christian Advocate for ten years, and editor and publisher of the Christian Century magazine for 27 years. James M Wall died March 22, 2021 at age 92. His family appreciates all of his readers, even those who may have disagreed with his well-informed writings.
This entry was posted in Israel, Middle East, Middle East Politics, Netanyahu, Obama, Palestinians, United Nations. Bookmark the permalink.

15 Responses to Inside The U.S. $38 Billion 10-Year Gift to Israel

  1. Nancy Orr says:

    Thank you for relating “the rest of the story” about the aid package. It somewhat helps me swallow this bitter pill.

  2. “Now Netanyahu is paying for all of that, big time.” It seems to me, Jim, that US taxpayers are paying for all of that, big time. And watch your wallets and purses, everyone: our Zionist-Occupied Congress is already making noises toward upping the ante (even without the Ziostate’s having to ask for it!); just what Netanyahu has become accustomed to expect.

  3. Patricia says:

    If OBAMA pulls this off, Inwill feel some respect for him, but not for my state’s two senators who signed a letter for ISRAEL.

  4. samijoseph says:

    I echo Nancy Orr’s sentiments.

  5. Richard Greve says:

    This is an interesting take on the 38 billion we’re giving Israel. Even though it’s stil aan outrage, the points you make are valid and show a backbone on Obama. With the israel lobby so in control of Congress, perhaps this is the best the administration could have done.

    Lindsay Graham, the Senator from South Carolina, shows more loyalty to Netanyahu and Israel than to Presiddent Obama and the American people.

    Richard Greve, Anit War Activist

  6. Robert says:

    At the end of the day, a mere chink in the armour. So the bullied younger brother got his personal revenge with a black eye to his older sibling, as it will be seen at best.

    I can’t imagine Palestinians thinking of their people’s future will take take much solace.

  7. Neunuebel says:

    Yes, thanks for this Jim. I’ve always wondered how an Israeli could possibly be proud of being an Israeli when they cannot exist without U.S. Food Stamps. The so called “miracle” is hardly that if you have to depend on Food Stamps all you existence.

  8. AWAD SIFRI says:

    Thanks for a truly outstanding analysis, Jim. What is going on behind the scenes is hugely important and significant in the long term.
    Israel’s military-industrial-superiority-complex will at least be dented, by removing the parasitic privileges they have had for decades, which was to develop one of the top military industries in the entire world.
    Presumably, now, Israel cannot use 25% of the US military aid for feeding its Frankenstein. Even, perhaps worse for Israel, the Apartheid state will not be able to race the legs and the hand that feeds it to the doors of the very countries that were loyal and lucrative American clients. (This didn’t even get a mention by our media in previous decades).
    Perhaps, Israel will no longer be as generously and intimately privy to America’s latest state-of-the-art military secrets and advances, which will reduce its ability to pass it on to America’s very enemies, as it did in the past (super computer, missiles, rockets, A-WAKS, and more).

  9. Helen Marshall says:

    Why the shrill “watch out for Iran, they’ll be making nukes in ten years!!” (Right up there with “the Russians are coming!”) Our intel agencies concluded long ago that Iran had abandoned its nuclear weapons program, and the current leadership has issued fatwahs against that. Time to stop bashing Iran, even thought the Israelis loathe it and the Wasihington establishment hates it for successfully reversing one of our regime changes.

  10. oldkahuna says:

    I’ve become a bit more cynical about these agreements.
    The agreement suggests that Palestinian lives do not matter. They can continue to be killed, tortured, and imprisoned. Gaza can continue to be a sealed compartment, making breath and life itself to exist on a limited time table. (Soon, the latest flotilla will attempt to dock in Gaza, carrying a ship of peaceful women and a significant supply of medicines. . .only to be arrested on the high seas by the Israeli navy.)
    The agreement bolsters our own military weapons sales. (Think of it as “welfare” for our “struggling” military weapons manufacturers.)
    The agreement bolsters the Middle East gaming of the weapons race. “They have more F-35s than we do!” (Saudi Arabia has already received a major portion of its new largesse…to use against the Saudi-US “war” against Yemen.)
    The agreement bolsters the building of more settlements and the Zionization of the Jericho valley.
    Through Obama’s entire speech lurks the devastating fact that Obama’s “words” are almost always misleading. Usually his “actions” are much more deadly and damaging. (The “benevolent” words regarding refugees within our own borders are countered by the actions of the “Deporter in Chief.”)
    I’m sorry I cannot share your enthusiasm, Jim. You’ve made some really strong and valid points (like the fact that the total financial package has NOT been increased), but I resist your positive conclusions.

  11. Leonard Rodgers says:

    Go ahead and calculate how many elderly poor and sick there are in the USA and figure out how much 38+ billion dollars would do for each one of them over that same 10 year time period. At the same time think about how many disadvantaged and under educated children in the USA could be helped with this 10 year gift from Congress. Funding The State of Israel is extremly disturbing since The State of Israel is a self sufficient, advanced industrial society and economy; according to their own publicity. These funds from US tax payers will also support illegal settlers in the Occupied Territories breaking UN Resolution 242 and the Geneva Convention and make a mockery of any peace agreement on the table. Giving these kind of resources to the The State of Israel is like handing the 1% of our own society, who are esceedingly rich, a special gift of $38 billion for their birthday.

  12. omar dabbagh says:

    Thank you Jim , for a good and factual analysis, as we thank as well our departing president for his last minute timid efforts, but let’s remember that $38 billion are 38 billions, and our yearly aid to Israel is now over one hundred billions, we pride ourselves as the number one superpower in the world, and the beacon of liberty and morality, but we don’t even question our literal permanent cowardly fearfulness of a country the size of couple Texas farms, a country that has been a continuous embarrassment and burden on our agendas and interests .

  13. Samir says:

    Thank you Jim for clearing the $38 billion aid to the Aparthied Nazi Israel
    For the first time I feel pessimistic that the USA has proven that no President or Congress is able or have the will to force Israel, the last occupation of the modern world out of Palestine.The Palestinians and the world were hoping charismatic sincere Obama was ready to implement the two state solution based on UN resolutions. The UN role was and still is marginalized by the super powers USA, France and Britain who are totally responsible for the creation of this Monster as the Palestinians continue to suffer without an end in sight . Now Apartheid Israel is enjoying the Arab leaders flocking to make peace with Israel with the hope that Israel will protect their Throwns from the upheaval that was created by the west .
    I guess the poor PALESTINIANS are left to go it alone like the Native Americans and they should ….PALESTINIANS have to scratch their own back and write off the hope of any support from the “civilized “world.

  14. Samia Khoury says:

    I agree with Samir, and I expressed my opinion about the $38 in my latest reflection posted on my blog:

  15. Bruce says:

    I’m pondering if the US will veto the UN Security Council resolution proposed in Obama’s final speech.

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