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Middle East Journal 51, NO. 2, SPRING 1997
Copyright 1997 The Middle East Institute.

US Security Assistance to Egypt and Israel: Politically untouchable?

by Duncan L. Clarke

Duncan L. Clarke is Professor of International Relations at the School of International Service, American University, Washington, DC.

Since the 1970s, Egypt and Israel together have received the lion's share of worldwide US security assistance allocations: about $100 billion. This aid helped the United States achieve short-term political objectives, but several factors suggest a need to reduce or eliminate at least the economic portion of this assistance. Future levels of US security assistance, however, will be largely determined by a Congress that is receptive to real or supposed Israeli needs and to the appeals of select special interest groups.

About 92 percent of the annual US expenditure for security assistancefn 1 today goes to two countries: Israel and Egypt. Virtually all of Israel's foreign aid from the United States (excepting housing loan guarantees) and most of US aid to Egypt is security assistance. Since security aid constitutes about 45 percent of the entire US foreign assistance budget, it is a sizable sum. For many years, Israel has received annually at least $3 billion in security assistance: $1.8 billion in military aid under the Foreign Military Financing (FMF) program, and $1.2 billion in economic aid under the Economic Support Fund (ESF). Egypt has received yearly amounts of about $2.1 billion in security aid: $1.3 billion in FMF, and $815 million in ESF.fn 2

The US security assistance program was initiated in 1946 to counter the influence of the Soviet Union and its allies. This article assesses factors that have affected, and are likely to affect, US security assistance to Israel and Egypt in the post-Cold War environment. Developments in the Middle East, US strategic interests in the region, fiscal concerns, and public opinion are all pertinent considerations. Change, however, can come only through an American domestic political process in which Congress and powerful interest groups often play decisive roles.

BACKGROUND

From the late 1970s through fiscal year (FY) 1997, annual US aid to Israel and Egypt comprised between 33 and 43 percent of the entire foreign assistance budget. Aid to these two countries dominated the security assistance program during this period, and its prominence within that program increased after the end of the Cold War because, while aid to Israel and Egypt remained fairly constant, the overall security assistance budget declined when the program's core rationale for existence--containing the Soviet Union--disappeared. Total reported US aid (loans and grants) to Egypt by FY 1997 stood at $49 billion, 75 percent of which was security assistance. Total US aid to Israel (excluding $9.8 billion in housing loan guarantees) was more than $71 billion, about 90 percent of which was security assistance.fn 3 Moreover, 30 percent of the entire US foreign affairs budget--which funds, among other things, all forms of foreign aid, the State Department and three other foreign affairs agencies, contributions to the United Nations and other international organizations, and the Peace Corps--is currently consumed by aid to Egypt and Israel.fn 4

As stunning as these amounts are, they substantially understate the magnitude of the assistance. This is because these figures are in current, not constant, dollars (that is, inflation is not taken into account), and because they do not reflect the numerous special privileges accorded to Israel.fn 5 When the value of these privileges is computed, an average of at least $500 million annually is generally added to the $3+ billion in officially reported yearly aid to Israel since FY 1985.fn 6

Since the 1970s, the US government's rationale for aid to Israel and Egypt has become a virtual mantra, repeated by successive administrations. Declaratory US policy asserts that the aid is designed primarily to: secure "a just and lasting comprehensive peace"fn 7 between Israel and its neighbors, especially Egypt; reaffirm the US commitment to a democratic Israel; promote regional stability by helping Egypt modernize its armed forces; and encourage sustainable development and a market-oriented economy in Egypt.fn 8 US government publications declare that there is an "unshakable" US commitment to Israel "for historic, political, and moral reasons."fn 9

Historic, moral and strategic reasons are certainly factors in the United States' commitment to Israel. Fundamentally, however, this relationship is driven and sustained by domestic political forces in the United States. Egypt receives a high level of aid because those forces, and administration officials, rightly view peace between Egypt and Israel as vital to the security of the Jewish state. Aid to Egypt (and to Jordan and the Palestinian Authority) is largely derivative of aid to Israel. The unabashed political purposes of aid to Egypt were and remain: to reward Cairo for making and maintaining peace with Israel; to build mass support within Egypt for the peace treaty with Israel by using ESF, development assistance, and food aid to create a link between peace and a more open, prosperous society; and to secure a strategic relationship between Egypt and the United States.

EGYPT

The key political objectives of US aid to Egypt have been realized. The aid almost certainly helped solidify peace between Egypt and Israel. It allowed Egypt to stand apart from the rest of the Arab world after the Camp David accords. In 1990-91, Egypt joined the United States, Saudi Arabia and others in rolling back Saddam Husayn's invasion of Kuwait. Cairo and Washington now have close strategic ties and Egypt once again has a leading role among Arab states. Moreover, US economic aid has brought some tangible benefits, especially to the country's physical infrastructure; and, while hardly a showcase for liberal democracy, Egypt now has a legal political opposition and enjoys one of the freer presses in the Arab world.

Despite these successes, a thorough reassessment of US- Egyptian relations is long overdue, particularly concerning foreign assistance. Egypt's importance for the United States after the Cold War, while substantial, has diminished appreciably, partly because of the disappearance of the (real or supposed) Soviet threat to the region. Moreover, the September 1993 Declaration of Principles (DOP) with the Palestine Liberation Organization (PLO) initiated a peace process between Israel and key Arab actors and, whatever the eventual outcome of this process, it is increasingly difficult to justify paying Cairo huge sums to do what is, presumably, in Cairo's best interest--remain at peace with Israel. In addition, political and fiscal realities in the United States have taken a toll on the overall foreign aid budget and will likely affect Egypt. Finally, the aid program with Egypt is so riddled with endemic weaknesses that program results have often been mixed or counterproductive.

While Egypt does not have the level of societal instability of, say, Algeria, it suffers pronounced political, social, and economic debilities. Per capita GDP fell between 1986 and the mid-1990s to a mere $600, unemployment stood at more than 20 percent, and a 1994 report by the United Nations found that Egypt was "in danger of joining the world's list of failed states..."fn 10 Civil strife between Egyptian security forces and Islamists, since 1990, has claimed hundreds of lives, including those of leading politicians, media figures and intellectuals. Partly because of this, there have been widespread human rights abuses by the government. Political participation has also been severely restricted. Indeed, President Husni Mubarak's insistence on personal, centralized control of decisionmaking has effectively thwarted the emergence of a representative political class. Moreover, although the military and security forces are privileged elements in a sea of poverty, and US military aid pays more than 50 percent of Egypt's defense budget, this segment of society has not escaped a variety of afflictions. Included among them is a widening social and political gap between officers and enlisted men and penetration of the security forces by Islamist radicals, especially in Upper Egypt.fn 11

The remarkable absence of vigorous, reliable Egyptian advocates of the United States is particularly striking. American-trained Egyptian military officers and civilians often find their careers sidetracked; there is no sizeable core of secular, educated, moderate, US-supportive political activists; almost all opposition parties, in varying degrees, are anti- American; and some of these parties, as well as some Egyptian economists, contend that the huge US aid program has cost the country too much of its sovereignty--a view mirrored in a popular (if erroneous) description of the US aid bureaucracy as Egypt's "shadow cabinet."fn 12

The economic and military aid program for Egypt has been repeatedly faulted for mismanagement and inefficiency,fn 13 but there is a more basic problem. While short-term US political goals have been realized, the highly politicized nature of the program undermines its long-term effectiveness. That is, Egyptian officials have always recognized that this aid was forthcoming because of supposed US strategic interests and, especially, because of entrenched support for Israel in Congress and in successive US administrations. Almost from the program's inception, Egypt viewed the aid as an assured entitlement for having made peace with Israel. As long as Cairo honored the peace treaty and did not upset a Middle East peace process, it knew that aid would continue to flow. That is, its aid allotment would not be cut substantially unless Israel's was also reduced.fn 14 With such an assurance, it was predictable that attempts by Washington to place additional conditions on this aid would be successfully resisted by Egypt, even when it promised to improve program effectiveness. Partly as a consequence, US aid has promoted neither sustainable economic development nor much-needed economic reform. This situation can only impact negatively on US interests and political objectives.fn 15

The overriding political imperatives of encouraging Egypt to remain at peace with Israel and to assist in (or not impede) a peace process between Israel and other Arab actors, have usually deterred Congress and the executive branch from vigorously overseeing the program, pressuring Egypt to take corrective measures, or reducing aid levels substantially. An example of this 'hands off' approach (although here Congress also sought to subsidize American wheat farmers) was US food assistance. Although Egypt was the major recipient of US food aid, that many farmers fed their cattle loaves of bread made from this grain, until 1992 the State Department and many in Congress resisted cutting the program.fn 16 Concerning the overall aid package to Egypt, former US Agency for International Development (AID) official Robert Zimmerman wrote that: "No one in the State Department or elsewhere in the US government wants to risk an embarrassing assessment of how aid resources have failed to stimulate the type of economic, social, and political development necessary for self-sustainable peace in the Middle East."fn 17

Finally, Egyptian-Israeli relations have rarely been cordial, and most segments of Egyptian society deeply distrust Israel.fn 18 A December 1994 poll indicated that a majority of Egyptians opposed maintaining even formal ties with Israel.fn 19 Egypt's Defense Minister reportedly remarked, in 1993, that his country's military modernization was aimed at Iran and Israel, and--partly because of Israel's nuclear weapons capability and Jerusalem's repeated refusals to begin denuclearization talks with Egypt and other Arab states--Cairo rejected several US attempts to initiate direct channels of communication between the Israeli and Egyptian militaries.fn 20 Moreover, Egypt has reacted harshly to the hardline Likud government that assumed office in 1996.fn 21

ISRAEL

A reassessment of the aid program to Israel is also in order. Threats to Israel's security will surely continue for many years, but prior to Binyamin Netanyahu's 1996 election as Prime Minister, Israel's security was more assured than at any time in its history. The Cold War was over, Israel's security ties with the United States were close, the Israeli Defense Force was militarily preeminent in the region, the solid front of hostile Arab states was gradually eroding, and (critically) the peace process was largely on-track. Tragically, however, many of the current security threats to Israel have been aggravated or engendered by Prime Minister Netanyahu's resistive approach to the peace process.

In addition to the regional security situation, several interrelated factors could affect the future of the largest US foreign aid program. They include: strategic considerations, domestic political forces in the United States, American public opinion toward Israel and foreign assistance, the supposed relationship between aid and influence, pressures to balance the federal budget, and Israel's own conception of the continued utility of foreign aid.

The Strategic Relationship

While a full treatment of the subject is beyond the scope of this study, it is clear that strategic and geopolitical considerations, while germane, tell relatively little about the unique, oft-labeled 'special relationship' between the United States and Israel. Indeed, it was not until the September 1970 crisis between Jordan and Syria that the White House first saw Israel as having potential strategic utility for the United States--even though Israel's influence on the outcome of that crisis was "secondary at best."fn 22 As early as 1972, however, US president Richard Nixon no longer considered Israel to be a source of regional stability; in fact, Nixon came to believe that Israel and its organized American supporters often undermined US interests.fn 23 Most executive branch officials in 1970, as in the 1980s and today, did not/do not see Israel as a net strategic asset.fn 24 The attitude of a former Pentagon official is typical: "Israel's strategic value to the United States was always grotesquely exaggerated. When we were drafting contingency plans for the Middle East in the 1980s, we found that the Israelis were of little value to us in 95 percent of the cases."fn 25

`Strategic cooperation' between the two countries, first formalized in 1983, was spearheaded by a small group of American supporters of Israel and a handful of senior officials (including US president Ronald Reagan's National Security Advisor Robert McFarlane) over the opposition of the secretary of defense, joint chiefs of staff, and much of the State Department below the level of the secretary.fn 26 Secretary of State George Shultz later told American Israel Public Affairs Committee (AIPAC) Executive Director Thomas Dine that he hoped to make it impossible for a future secretary of state, who might be less supportive of Israel, "to overcome the bureaucratic relationship between Israel and the US"fn 27 created by the Reagan administration. Close security cooperation continues today, although it is even less important to the United States than it was during the Cold War. Only a crisis in the relationship seems likely to weaken this 'strategic' tie.

A national interest-based rationale (among others) will continue to be employed publicly by Israel, its American advocates, and the US government to justify the flow of American aid. But while the United States derives some benefits from the relationship--in counterterrorism cooperation and intelligence exchange, for instance--these public assertions are widely discounted in private by many US national security officials.fn 28 Today, even some committed American supporters of Israel like Bernard Reich agree that, "Israel is of limited military or economic importance to the United States...It is not a strategically vital state."fn 29 Israeli analyst Shai Feldman concurs: "[T]he strategic dimension of America's motivation for supporting Israel never comprised the core of these relations. Rather...`softer' value-based considerations and the nature of American domestic politics combined to play a much more important role..."fn 30

The Arab-Israeli Peace Process

One of the major interests continuously central to US Middle East policy, from at least the Nixon administration to the present, has been the promotion of peace between Israel and its neighbors. A joint statement issued by President Clinton and Israel's Prime Minister Shimon Peres, in April 1996, anchored their "strategic partnership" in two main principles: the US commitment to Israel and a mutual determination to achieve a "comprehensive" Middle East peace settlement.fn 31 Joseph Alpher, former director of the Jaffee Center for Strategic Studies at Tel Aviv University, asserts that a commendable condition for future American strategic support for Israel may be one which "requires that Israel remain pledged to a workable peace process."fn 32 Similarly, the "working premise" underlying a spring 1996 study by Shai Feldman, which projected closer strategic relations between the United States and Israel in the future, was that the "current phase of the Arab-Israeli peace process will be completed by the end of this decade, resulting in peace agreements between Israel and Syria and Lebanon."fn 33 Should the United States perceive Israel to be substantially responsible for disrupting or ending a peace process which had made considerable headway by May 1996, relations between the two countries could cool considerably. Over time, this perception might lead to the kind of crisis which would have a corrosive impact on strategic cooperation.fn 34

This scenario became less hypothetical when Binyamin Netanyahu defeated Shimon Peres. Soon after taking office, Netanyahu questioned several of the assumptions which had undergirded negotiations between Israel and the Palestinian Authority; he also challenged some conditions that were widely acknowledged as necessary for a more comprehensive peace settlement, such as the land-for-peace principle, which is an essential basis for negotiations. Yet Netanyahu deflected Egyptian president Husni Mubarak's July 1996 warning--that it would be "very dangerous" to continue the pursuit of territorial settlements--by reiterating his oft-expressed view that this principle was subject to "differing interpretations."fn 35 By the fall of 1996, the outlook was bleak. President Mubarak and Jordan's King Husayn (whose domestic base of support for engagement with Israel was fragile) both denounced Netanyahu for the impasse, a summit meeting in Washington to resolve the problem was largely unsuccessful, Israel was a politically polarized country, its Likud government appeared to have neither the will nor the ability to move toward final status negotiations with the Palestinian Authority, and there was virtually no likelihood of a peace treaty between Israel and either Syria or Lebanon.fn 36

This gloomy prognosis changed only marginally when Netanyahu, in January 1997, finally decided to honor an agreement struck by his Labor government predecessor to withdraw Israeli troops from 80 percent of the city of Hebron. Israeli-Palestinian negotiations resumed, but US officials confirmed that the scope and timing of future West Bank withdrawals would be determined unilaterally by Israel.fn 37 Contrary to a statement by Secretary of State Warren Christopher, Netanyahu and Yasser Arafat clearly had not "found common cause,"fn 38 and Israeli highway and settlement construction on the West Bank continued apace.fn 39

As early as March 1993, President Clinton had made it clear that his strategy for an Arab-Israeli peace settlement was to provide Israel with such generous military, economic and political support that it would feel confident about taking 'risks for peace'--such as withdrawing from the West Bank and the Golan Heights.fn 40 Arguably, no American president was a more consistently magnanimous benefactor of Israel. Yet Netanyahu's cautious, even obstinate, approach toward the peace process in 1996, and, especially, his lifting of the previous government's restraints on expanding Jewish settlements in the West Bank, raised doubts about the wisdom of the strategy that the Clinton administration had pursued. While President Clinton clearly did not have the close personal relationship with Netanyahu that he had had with Labor Prime Ministers Yitzhak Rabin and Shimon Peres, neither he nor Congress seemed prepared to exert sustained, meaningful pressure on Israel, let alone withhold foreign aid.fn 41 Indeed, Netanyahu threatened to "activate" the pro-Israel lobby in the United States "in order stand up to pressure"fn 42 that might come from Washington.

The Domestic Political Process

If strategic importance is a secondary or tertiary consideration in explaining the closeness of America's tie to Israel, the legacy of the Holocaust and Israel's democratic character are significant factors. Yet even they acquire explanatory power only as themes that play out in the context of the domestic American political process. Congress and special interest groups, especially ethnic lobbies, have a major, often decisive, impact on foreign assistance policy. The influence of Congress and interest groups on US foreign policy is nowhere more evident than with regard to aid to Israel.

The former chairman of the House Committee on Foreign Affairs, Representative Clement Zablocki (D-WI), remarked in 1976 that, "Congress is too responsive to the lobbies of ethnic and special interests in the US to be able to take the lead in foreign policymaking without endangering the national interest."fn 43 Congress does, indeed, appear to be particularly responsive to select ethnic lobbies.fn 44 This is certainly so concerning Congress's interrelationship with AIPAC, easily the most successful of such lobbies. Many Jewish-American groups and individuals (and others) seek to influence Congress and, often, the administration on matters of Middle East policy, but AIPAC is a registered lobby working to advance Israel's interests.fn 45 Some strong defenders of Israel and AIPAC, like Steven Spiegel, downplay the impact of the Israel lobby and contend that most policy decisions affecting Israel are made on the basis of objective US national interests "unrelated to domestic politics."fn 46 However, few scholars, independent observers, US government officials, informed Israelis, or even committed American partisans of Israel agree with Spiegel.fn 47 For instance, Orthodox rabbi Dov Zakheim, a former Pentagon official with strong ties to Israel, relates that: "Virtually all informed Israelis recognized that congressional pliability on... any policy relating to Israel did not necessarily connote sincere agreement with that policy. It was as much a reflection of domestic US politics, most notably of deference to AIPAC and to Israel's other Washington allies on all matters relating to Israel."fn 48

As with the above treatment of strategic cooperation, this article is not an appropriate locus for an exhaustive analysis of AIPAC and associated groups. Still, a central focus of the lobby, perhaps the central focus, has been to maintain or expand Israel's annual foreign aid allocation. The realization of this objective hinges critically on the effectiveness of the lobby and its allies in influencing the US Congress.fn 49 <

Public Opinion

Possible circumstantial evidence of the influence of AIPAC and associated groups may be suggested by polling data on public opinion about US aid to Israel. That is, especially since the end of the Cold War, there appears to have been a considerable gap between, on the one hand, the public's critical attitudes about aid to Israel and Egypt and, on the other hand, consistently high levels of foreign assistance to these two nations. Hence, there must be some explanation other than public opinion for this generous aid, such as special interest group influence and/or a conviction by members of Congress that Israel and Egypt are vital US interests and are, therefore, uniquely deserving.

The government of Israel and American Jewish organizations make strenuous efforts to influence American public opinion, particularly leadership (elite) opinion. For instance, the Israeli foreign ministry alone, at its own expense, annually brings 400-500 American opinion-makers--mayors, local politicians, union leaders, clergy, journalists, and others--to Israel for tours and briefings.fn 50 Nonetheless, public and leadership support for assistance to Israel has been generally eroding since at least 1990.fn 51 By the mid-1990s, public support for aid to Israel and Egypt had become very soft. A 1994 poll by the Chicago Council on Foreign Relations found that 44 percent of the public and 50 percent of the leaders would decrease or stop aid to Israel, while only nine percent of the public and four percent of the leaders would increase it. The same survey reported comparable findings for US aid to Egypt.fn 52 Another poll that year by the Wirthlin Group, one that first informed respondents about the amount of aid Israel had already received from the United States, found that 69 percent of the public wanted to reduce or stop aid to Israel.fn 53 A 1995 survey by the Program on International Policy Attitudes at the University of Maryland found less public support for aid to Israel and Egypt than for any other US foreign assistance program: 56 percent wanted this aid reduced, while just four percent would increase it.fn 54

DE FACTO ENTITLEMENTS

Security assistance has traditionally been viewed as a tool of US foreign policy; that is, as one of several means available to policymakers for advancing national interests. However, since at least the early 1980s, this functional-instrumental depiction of security assistance has not been an entirely accurate characterization of US aid to Israel and Egypt. As a rule (to which there are exceptions), a tool for the implementation of policy is maximally effective when its wielder has, and is seen by others as having, a reasonable degree of freedom of action in its employment. This is not the case with aid to Israel and Egypt.

On the contrary, because Washington has designated these two nations as strategic assets deserving of generous allotments of aid even long after the Cold War has ended, they have come to view the aid as an entitlement. That is, aid is seen by those two states as a quid pro quo for their real or supposed strategic importance to the United States. This perception has been reinforced and legitimated by the Congress in yearly foreign assistance appropriations. A common Israeli viewpoint was expressed in 1981 by Israel's Deputy Minister of Finance: US aid, he remarked, "is a narcotic and we are hooked...This [aid] elevator will go down when we tell you. You won't tell us."fn 55 He was proven correct, of course. Yet when the aid spigot is locked in the 'on' position, the US president has minimal ability to employ this instrument flexibly to promote American interests. Aid continues to flow at customary levels despite gross misexpenditures of funds and frequent contraventions of US laws and policies.fn 56

CONCLUSION

Defense News, usually highly supportive of Israel's interests, urged in 1996 that Israel be weaned "off the dole" by phasing out FMF aid over a ten year period. It asserted that US subsidies and special privileges to Israel contributed to the loss of American defense jobs and business.fn 57 Military aid will continue, however, partly because even an unlikely near-term peace with Syria would not eliminate potential threats to the Jewish state.fn 58 In keeping with past practices, continued military aid to Israel would likely be accompanied by substantial military aid to Egypt.

ESF aid to Egypt and Israel, however, could and should decline. Even some American supporters of Israel who oppose any reduction of aid acknowledge Israel's declining need for economic aid;fn 59 other partisans of Israel are concerned that the aid package to Israel and Egypt will be vulnerable politically if ESF is not cut as the overall foreign assistance budget declines.fn 60 A commission composed of past and present US government officials, all strongly supportive of Israel, also recommended considering the reduction of ESF.fn 61

Moreover, a growing number of Israeli and American economists and government officials view ESF aid and massive US housing loan guarantees as harmful to Israel's economy. They find that the aid distorts market incentives, impairs the country's competitiveness, and invites irresponsible government expenditures.fn 62 Jack Kemp, a staunch Israel supporter, declared, shortly before becoming Bob Dole's vice presidential running mate in 1996, that continued US aid was "counterproductive" for the Jewish state,fn 63 and the Jerusalem-based Institute for Advanced Strategic and Political Studies urged an end to all foreign aid by mid-1998 because aid "feeds the overgrown bureaucracy and perpetuates a cycle of dependency."fn 64 Likewise, Joel Bainerman, publisher of Tel Aviv Business, believes that Israel would prosper from the complete loss of US economic aid, and that an Israel with a per capita income of $14,000 has "grown up" economically.fn 65

As economic aid to Israel declines, ESF and other non- military aid to Egypt will also fall. ESF aid to Egypt served short-range US political objectives, but this infusion of economic assistance--the largest in history to a single country (Israel excepted)--"has not enabled the people of Egypt to experience measurable, sustained progress in the areas that most affect their daily lives."fn 66 Indeed, an internal State Department report, prepared for Secretary of State Warren Christopher in 1996, recommended reducing ESF aid to Egypt in the late 1990s.fn 67

Concerned that aid to Israel and Egypt was crowding out development and humanitarian aid to needy nations, a coalition of eleven charitable and religious organizations sought, in 1995, to stimulate congressional interest in restructuring foreign assistance allocations. As in the past, however, they lacked political leverage, and a representative of one of these groups, Bread for the World, lamented: "Nobody wants to touch it."fn 68 And nobody did. Representative Sonny Callahan (R-AL), for instance, who chaired the Foreign Operations Subcommittee of the Committee on Appropriations but had never in his long career voted for a foreign aid bill, first expressed his concern about the "sacred cow" of aid to Israel and Egypt, and then joined his colleagues in appropriating funds for the two countries.fn 69 And Representative Michael Forbes (R-NY) reiterated what has been a political verity in Washington since the 1970s: "Aid to Egypt and Israel is untouchable..."fn 70

The economic portion of the aid package to Israel became `touchable,' politically, only after Prime Minister Netanyahu's speech to a wildly cheering joint session of Congress in July 1996. Even then, Netanyahu's conditional, self-assured remarks made it evident that he was confident that Congress would take its cue from Israel as to the pace and level of possible aid reductions: "In the next four years, we will begin the long-term process of gradually reducing the level of your generous economic assistance."fn 71 And AIPAC soon 'clarified' Netanyahu's remarks by reasserting Israel's ongoing need for large-scale US subsidies in order to, among other things, "enable Israel to make economic reforms."fn 72

A persuasive case can be made for reducing security assistance, especially ESF, to Israel and Egypt. If it had not been linked with aid to Israel, aid to Egypt would have been cut years ago. Reducing ESF aid will have no appreciable impact on the peace process. That process was in jeopardy by 1996, well before any cuts had occurred. Moreover, reductions in economic assistance will be gradual, and military aid will continue to flow. Indeed, Egypt and Israel have understood for some time that foreign aid from the United States was likely to decrease.

Aid to Israel, however, is unlikely to be reduced significantly, if at all, unless Congress alters its habitual posture on this matter. The prospects for such a change in disposition may be better now than at any time in the past 25 years. Yet, aid reductions will depend much more on Israel's acquiescence to them, and on Congress's sympathetic identification with supposed Israeli needs--as articulated by AIPAC and its allies--than they will, for instance, on fiscal considerations, public opinion, or a collapse of the peace process--even one attributed largely to Israel's actions.

Copyright 1997 The Middle East Institute

Footnotes

Footnote 1 The US security assistance program has several elements, including aid for military education and training, and aid to counter nuclear proliferation, terrorism, and illicit narcotics. However, 95 percent of the security assistance budget since 1989 has been for military assistance under the Foreign Military Financing (FMF) program and economic aid under the Economic Support Fund (ESF). All FMF and ESF to Israel and Egypt since the mid-1980s has been in grant form.

Footnote 2 See US Department of State, Congressional Presentation for Foreign Operations, Fiscal Year 1997, Washington, DC, 1996, pp. 422, 424, 489, 495; US Agency for International Development (AID), US Overseas Loans and Grants: July 1, 1945 - September 30, 1994, Washington, DC, 1995, pp. 4, 10, 13.

Footnote 3 Clyde R. Mark, "Israel: U.S. Foreign Assistance," CRS Issue Brief, Congressional Research Service, Washington, D.C., 18 October 1996, pp. 3, 11, 14-15; US Department of State, Congressional Presentation for Foreign Operations, pp. 422, 424; AID, US Overseas Loans and Grants, pp. 4, 10, 13; Shawn L. Twing, "A Comprehensive Guide to U.S. Aid to Israel," Washington Report on Middle East Affairs 14, no. 8 (April 1996), pp. 7, 49-52.

Footnote 4 Casimir A. Yost and Mary Locke, "U.S. Foreign Affairs Resources: Budget Cuts and Consequences," Occasional Paper, Institute for the Study of Diplomacy, Georgetown University, Washington, D.C., 1996, pp. 8, 26.

Footnote 5 Special privileges include: permitting Israel to spend $475 million of its annual military aid in Israel rather than in the United States, where the money would employ American workers; US funding through the Defense Department's budget of many Israeli defense programs, including its largest, the Arrow missile; paying Israel (and only Israel) all of its foreign aid at the start of the fiscal year thereby allowing it to purchase US Treasury notes and earn an additional $70-80 million yearly in interest paid on those notes by US taxpayers; and many, many more. For a partial listing of these privileges see Mark, "Israel: U.S. Foreign Assistance," pp. 2-8; Colin Campbell, "U.S. Devises Many Ways to Help Its Friend Israel," Atlanta Constitution, 21 January 1990, p. A1; Twing, "A Comprehensive Guide to U.S. Aid to Israel," pp. 49-52.

Footnote 6 The $3+ billion figure excludes US housing loan guarantees to Israel. For sharply contrasting views on the costs and benefits of the US-Israel relationship in the context of foreign aid, see George W. Ball and Douglas B. Ball, The Passionate Attachment: America's Involvement with Israel, 1947 to the Present (New York: W.W. Norton, 1992), especially pp. 255-82, and, A.F.K. Organski, The $36 Billion Bargain: Strategy and Politics in U.S. Assistance to Israel (New York: Columbia University Press, 1990).

Footnote 7 US Department of State, Congressional Presentation, pp. 416-17.

Footnote 8 Ibid.

Footnote 9 US Department of Defense (DOD), United States Security Strategy in the Middle East, Washington, DC, May 1995, p. 7.

Footnote 10 Paul Lewis, "UN Lists Four Nations at Risk of Wide Income Gaps," The New York Times, 2 June 1994; The World Bank, World Development Report, Washington, DC, 1993, p. 238.

Footnote 11 Cassandra [pseudonym], "The Impending Crisis in Egypt," The Middle East Journal 49, no. l (Winter 1995), pp. 15-24; John Lancaster, "Praised Abroad, Egypt's Ruler Faltering at Home," The Washington Post, 13 March 1995, p. A1.

Footnote 12 Cassandra, "The Impending Crisis in Egypt," pp. 25-26; John Lancaster, "U.S. Aid Has Yet to Lift Most Egyptians," The Washington Post, 5 April 1995, p. A1.

Footnote 13 See, for instance, US General Accounting Office (GAO), Military Aid to Egypt: Tank Coproduction Raised Costs and May Not Meet Many Program Goals, NSIAD-93-203, Washington, DC, July 1993; GAO, Foreign Assistance: AID Strategic Direction and Continued Management Improvements Needed, NSIAD-93-106, Washington, DC, June 1993, pp. 34-36.

Footnote 14 Douglas M. Bloomfield, "Foreign Aid Cuts No Mirage This Time," Washington Jewish Week, 11 July 1996, p. 17.

Footnote 15 Robert F. Zimmerman, Dollars, Diplomacy, and Dependency (Boulder, CO: Lynne Rienner, 1993), pp. 85-86. Zimmerman is a retired foreign service officer with years of experience with AID. His book focuses particular attention on Egypt. See also Lancaster, "U.S. Aid Has Yet to Lift Most Egyptians," p. A1; GAO, Egypt's Capacity to Absorb and Use Economic Assistance Effectively, ID-77-33, Washington, DC, September 1977, p. 1.

Footnote 16 Zimmerman, Dollars, Diplomacy, and Dependency, p. 180.

Footnote 17 Ibid., p. 93. See also Vernon W. Ruttan, United States Assistance Policy: The Domestic Politics of Foreign Economic Aid (Baltimore, MD: Johns Hopkins University Press, 1996), p. 301.

Footnote 18 Fawaz A. Gerges, "Egyptian-Israeli Relations Turn Sour," Foreign Affairs 74, no. 3 (May/June 1995), pp. 73-75; interview of Alfred Leroy Atherton (1990), in Stephanie Hoffman, ed., Egypt: Country Collection, Foreign Affairs Oral History Program (Arlington, VA: Association for Diplomatic Studies and Training, 1996), pp. Atherton 24-25.

Footnote 19 Gerges, "Egyptian-Israeli Relations Turn Sour," p. 74.

Footnote 20 Eric Rozenman, "Their Eyes on Egypt," Washington Jewish Week, 11 February 1993, p. 5; Barbara Opall, "Israel Seeks To Warm Cold Peace," Defense News, 29 July-4 August 1996, p. 3. See also Caroline Faraj and Steve Rodan, "Israel Downplays Egyptian Exercise," Defense News, 30 September-6 October 1996, p. 50; "Egypt Received Scud Missile Parts From North Korea, Report Says," Arms Control Today 26, no. 5 (July 1996), p. 25.

Footnote 21 John Lancaster, "Mubarak, Netanyahu Affirm Views in 'Cordial' Talks," The Washington Post, 19 July 1996, p. A3.

Footnote 22 Alan Dowty, Middle East Crisis: Decision-Making in 1958, 1970, and 1973 (Berkeley, CA: University of California Press, 1984), p. 177.

Footnote 23 William B. Quandt, American Diplomacy and the Arab-Israeli Conflict since 1967 (Washington, DC: The Brookings Institution, 1993), p. 426; Henry Kissinger, Years of Upheaval (New York: Little, Brown, 1982), pp. 202-203, 212, 1205; Anatoly Dobrynin, In Confidence: Moscow's Ambassador to America's Six Cold War Presidents (1962-1986) (New York: Times Books, 1995), pp. 303-304. For a contrasting view see Adam M. Garfinkle, "U.S. Decision-Making in the Jordan Crisis: Correcting the Record," Political Science Quarterly 100, no. 1 (Spring 1985), p. 137.

Footnote 24 This is especially so of the US armed forces and many civilians in DOD. See Shai Feldman, The Future of U.S.-Israel Strategic Cooperation (Washington, DC: Washington Institute for Near East Policy, 1996), pp. 7, 16, 21, 46.

Footnote 25 Confidential interview of a former DOD official by Duncan L. Clarke, December 1993. Similar views were expressed by numerous past and present government officials.

Footnote 26 Robert C. McFarlane, Special Trust (New York: Cadell & Davies, 1994), pp. 187-88; Howard Teicher and Gayle R. Teicher, Twin Pillars to Desert Storm: America's Flawed Vision in the Middle East from Nixon to Bush (New York: William Morrow, 1993), pp. 91-93, 141, 222, 271-74, 357; Karen Puschel, U.S.-Israeli Strategic Cooperation in the Post-Cold War Era: An American Perspective (Boulder, CO: Westview Press, 1992), pp. 73-77; Helena Cobban, The Superpowers and the Syrian-Israeli Conflict: Beyond Crisis Management? (New York: Praeger, 1991), pp. 78-103. Secretary of State George Shultz, a principal architect of strategic cooperation, never mentions the subject in his lengthy memoirs except to regret his support for the US funding of Israel's canceled Lavi fighter. George P. Shultz, Turmoil and Triumph: My Years as Secretary of State (New York: Charles Scribners' Sons, 1993), p. 143.

Footnote 27 Thomas A. Dine, "The Revolution in U.S.-Israel Relations," 1986 (typescript/mimeo).

Footnote 28 Numerous confidential interviews of US government officials by Duncan L. Clarke, 1990-95; Duncan L. Clarke, "The Arrow Missile: The United States, Israel and Strategic Cooperation," The Middle East Journal 48, no. 3 (Summer 1994), pp. 475-91; Cobban, The Superpowers and the Syrian-Israeli Conflict, pp. 83-111; Andrew Cockburn and Leslie Cockburn, Dangerous Liaison: The Inside Story of the U.S.-Israeli Covert Relationship (New York: Harper Collins, 1991); Seymour M. Hersh, The Samson Option: Israel's Nuclear Arsenal and American Foreign Policy (New York: Random House, 1991). Former Director of the Office of Egyptian Affairs in the US Department of State, Edward L. Peck, says: "My concern with the Arab-Israeli question is that we always--or so often--wound up doing things which may have been good for Israel but were clearly not good for us." Interview of Edward L. Peck (1989), in Hoffman, Egypt, p. Peck-6.

Footnote 29 Bernard Reich, Securing the Covenant: United States-Israel Relations After the Cold War (Westport, CT: Praeger, 1995), p. 123.

Footnote 30 Feldman, The Future of U.S.-Israel Strategic Cooperation, pp. 6-7.

Footnote 31 Thomas W. Lippman, "Anti-Terrorism Accord Signed," The Washington Post, 1 May 1996, p. A23.

Footnote 32 Emphasis added. Joseph Alpher, "Israel: The Challenge of Peace," Foreign Policy 101 (Winter 1995-96), pp. 142-43.

Footnote 33 Feldman, The Future of U.S.-Israel Strategic Cooperation, pp. 3, 23.

Footnote 34 Ibid., pp. 61-62.

Footnote 35 John Lancaster, "Mubarak to Netanyahu: Help Me, I'll Help You," The Washington Post, 23 July 1996, p. A12; Thomas W. Lippman, "Netanyahu Affirms His Hard-Line Image," The Washington Post, 10 July 1996, p. A13.

Footnote 36 Richard N. Haas, "The Middle East: No More Treaties," Foreign Affairs 75, no. 5 (October 1996), pp. 53-63; Michael Dobbs and Nora Boustany, "Summit Concludes with Little Progress," The Washington Post, 3 October 1996, p. A1; Caroline Faraj and Barbara Opall, "Questions, Recriminations Haunt Middle East Prospects for Peace," Defense News, 21-27 October 1996, p. 4.

Footnote 37 Jim Hoaglund, "The Hebron Pawn," The Washington Post, 19 January 1997, p. C7.

Footnote 38 Ibid.

Footnote 39 David Makovsky, "Netanyahu Okays Housing Near Jerusalem," Washington Jewish Week, 20 February 1997, p. 18.

Footnote 40 Feldman, The Future of U.S.-Israel Strategic Cooperation, p. 31; Lippman, "Netanyahu Affirms His Hard-Line Image," p. A13.

Footnote 41 See Douglas Bloomfield, "Time for a Serious Netanyahu Commitment," Washington Jewish Week, 3 October 1996, p. 25; Barton Gellman, "Limits Lifted On West Bank Settlements," The Washington Post, 3 August 1996, p. A1.

Footnote 42 Bloomfield, "Time for a Serious Netanyahu Commitment," p. 25; Neal Sher, "Testing the Prime Minister's Political Skills," Washington Jewish Week, 3 October 1996, p. 25.

Footnote 43 Quoted in Thomas M. Franck and Edward Weisband, Foreign Policy by Congress (New York: Oxford University Press, 1979), p. 165.

Footnote 44 See Yossi Shain, "Ethnic Diasporas and U.S. Foreign Policy," Political Science Quarterly 109, no. 5 (Winter 1994-95), pp. 811-41.

Footnote 45 AIPAC, of course, maintains that it furthers American national interests by encouraging close, mutually beneficial US-Israel ties. See Raphael Danziger and Bradley Gordon, "End American Aid to Israel? No, It Remains Vital," Middle East Quarterly 2, no. 3 (September 1995), pp. 13-21. The authors are AIPAC officers.

Footnote 46 Steven L. Spiegel, The Other Arab-Israeli Conflict (Chicago: University of Chicago Press, 1985), p. 160.

Footnote 47 For example, see Mitchell Geoffrey Bard, The Water's Edge and Beyond: Defining the Limits to Domestic Influence on United States Middle East Policy (New Brunswick, NJ: Transaction Publishers, 1991); Reich, Securing the Covenant, pp. 65-90; Edward Tivnan, The Lobby: Jewish Political Power and American Foreign Policy (New York: Simon & Schuster, 1987); Alpher, "Israel: The Challenges of Peace," p. 142; and J.J. Goldberg, Jewish Power: Inside the American Jewish Establishment (New York: Addison-Wesley, 1996), especially pp. 251-78.

Footnote 48 Dov Zakheim, Flight of the Lavi: Inside a U.S.-Israeli Crisis (Washington, DC: Brassey's, 1996), p. 216. See also pp. 133, 165-66.

Footnote 49 See reference in n. 47 above; Seymour Martin Lipset and Earl Raab, Jews and the New American Scene (Cambridge, MA: Harvard University Press, 1995), pp. 145-46; Duncan L. Clarke, Jason Ellis and Daniel O'Connor, Send Guns and Money: Security Assistance and U.S. Foreign Policy (Westport, CT: Praeger, forthcoming 1997), ch. 7.

Footnote 50 Thomas L. Friedman, From Beirut to Jerusalem (New York: Farrar, Straus & Giroux, 1989), p. 441.

Footnote 51 For early post-Cold War surveys see Benjamin Ginsberg, The Fatal Embrace: Jews and the State (Chicago: University of Chicago Press, 1993), p. 220; B'nai B'rith Anti-Defamation League poll, 28 April-1 May 1992, Roper Center, CT, 1992; John E. Reilly, ed., American Public Opinion and U.S. Foreign Policy: 1995 (Chicago: Chicago Council on Foreign Relations, 1995), p. 32.

Footnote 52 Reilly, American Public Opinion, p. 32.

Footnote 53 Ella Bancroft, "Americans Disapprove Present Israel Aid Level by Three to One," Washington Report on Middle East Affairs 14, no. 2 (July/August 1995), p. 86.

Footnote 54 Steven Kull, Americans and Foreign Aid: A Study of American Public Attitudes, Program on International Policy Attitudes, University of Maryland, 1 March 1995, pp. 11-12.

Footnote 55 Quoted in Zimmerman, Dollars, Diplomacy, and Dependency, p. 150. For a similar episode, one involving an Israeli defense official, see Zakheim, Flight of the Lavi, pp. 176-77.

Footnote 56 See, for instance, Zimmerman, Dollars, Diplomacy, and Dependency, pp. 57-58, 143, 147. Zimmerman (pp. 58, 140-42) makes a persuasive case that ESF aid has aggravated tensions between Egypt and Israel, and within Israel. See also Duncan L. Clarke, "Israel's Unauthorized Arms Transfers," Foreign Policy 99 (Summer 1995), pp. 89-101; GAO, Defense Industrial Security: Weaknesses in U.S. Security Arrangements with Foreign-Owned Defense Contractors, NSIAD-96-24, February 1996, pp. 22-23.

Footnote 57 "Time for Self-Reliance," Defense News, 26 August-1 September 1996, p. 20. See also Shawn L. Twing, "Israeli Defense Contract Illustrates How U.S. Aid Harms American Industries," Washington Report on Middle East Affairs 15, no. 4 (October 1996), p. 72.

Footnote 58 Peace could be costly for the United States. Israeli officials apparently concluded in 1995 that peace with Syria could cost Washington a lump-sum payment of $12 billion to Israel in military and non-military aid, a sum that former DOD official Dov Zakheim denounced as setting "new standards for chutzpah..." Dov Zakheim, "Peace with a Price Tag," The Washington Times, 5 January 1996. See also Yost and Locke, "U.S. Foreign Affairs Resources," p. 27.

Footnote 59 Reich, Securing the Covenant, pp. 105, 107.

Footnote 60 Representative Howard Berman (D-CA) said, "If Israel and Egypt are untouched and all else is cut, soon aid to Israel will take a whack. [The] argument for foreign aid falls off if just one country is left." Douglas M. Bloomfield, "Foreign Aid Wedge," Washington Jewish Week, 30 March 1995, p. 27; Douglas M. Bloomfield, "Aid Cuts Require Planning," Washington Jewish Week, 6 July 1995, p. 17.

Footnote 61 Report of the Commission on U.S.-Israel Relations, Enduring Partnership (Washington, DC: Washington Institute for Near East Policy, 1993), pp. 25-26, 52-53.

Footnote 62 Howard Rosen, "Economic Relations Between Israel and the United States," in Robert O. Freedman, ed., Israel under Rabin (Boulder, CO: Westview Press, 1995), p. 208; Joel Bainerman, "End U.S. Aid to Israel? Yes, It Does Harm," Middle East Quarterly 2, no. 3 (September 1995), pp. 3-12.

Footnote 63 The Jubilee Plan for Economic Freedom in Israel (Jerusalem: Institute for Advanced Strategic and Political Studies, July 1996), p. 5.

Footnote 64 Ibid., pp. 11, 31-32.

Footnote 65 Bainerman, "End U.S. Aid to Israel? Yes, It Does Harm," pp. 3-12.

Footnote 66 Zimmerman, Dollars, Diplomacy, and Dependency, pp. 104-106.

Footnote 67 At Secretary Christopher's behest, a US delegation visited Cairo in April 1996 to assess the implications of reduced security assistance to Egypt. Confidential interviews, State Department officials, 1996.

Footnote 68 Thomas W. Lippman, "Mideast Aid Survives Budget Ax," The Washington Post, 23 October 1995, p. A6.

Footnote 69 Ibid., p. A6.

Footnote 70 Ibid., p. A6.

Footnote 71 Emphases added. Netanyahu lauded Congress: "If I could only get the Knesset to vote like [the U.S. Congress]," in Shawn Cohen, "Netanyahu Wows Congress, Not U.S. Arab Group," Washington Jewish Week, 18 July 1996, p. 12.

Footnote 72 AIPAC, "Aid to Israel," Washington, DC, 21 October 1996; E.V. Kontorovich, "Time to Cut Aid to Israel," The Wall Street Journal, 8 August 1996.




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