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 assistance1 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.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.
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.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.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.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 1985.6
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"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. …