Magazine article Washington Report on Middle East Affairs

The Cost of Israel to U.S. Taxpayers: U.S. Spending More on Aid to Israel Than on War on Drugs

Magazine article Washington Report on Middle East Affairs

The Cost of Israel to U.S. Taxpayers: U.S. Spending More on Aid to Israel Than on War on Drugs

Article excerpt

The Cost of Israel to U.S. Taxpayers: U.S. Spending More On Aid to Israel Than On War on Drugs

By Ruth E. Steele

The United States spends $6 billion annually on domestic drug enforcement. It's a lot of money but few Americans begrudge it. Most feel there is a direct connection between increased drug use and the explosion of crime that has so degraded the quality of life in America.

If it takes $6 billion a year to begin addressing a problem that many see as a cancer eating at the heart of the country, so be it, so long as statistics show, despite ups and downs, a gradual reduction both in the use of hard drugs and in violent crimes.

Harder to understand, however, is the resignation demonstrated by Americans over the staggering annual cost of Israel to U.S. taxpayers. People can differ over the total cost of Israel. Do you just count the more than $60 billion that has flowed from the United States to Israel since 1949 in outright grants, forgiven loans, and loan guarantees? Do you turn those simple annual totals into inflation-adjusted 1996 dollars, in which case they might start to approach $100 billion? Do you also count the interest that those outlays have cost American taxpayers, since the U.S. government has had to borrow every cent of them? In that case the amount soars past $100 billion and starts climbing toward $200 billion.

Friends of Israel would argue that America's financial mismanagement is not the fault of its Israeli client state. They even go so far as to say that federal loan guarantees to Israel cost the American taxpayer nothing, since Israel "has never defaulted on a loan." The truth, however, is that Israel has never repaid a U.S. government loan because Congress eventually forgives them all.

Until it does, the "Cranston Amendment," named after one of Israel's greatest Senate friends, the late California Democrat Alan Cranston, and attached to every foreign aid appropriation bill since 1984, mandates that the annual level of U.S. economic aid to Israel cannot sink below the level of interest Israel must pay on outstanding (not yet forgiven) U.S. government loans for that year.

There is no reason to believe that the Israelis are about to renounce their practice of successfully lobbying Congress to forgive loans to Israel, and to have the U.S. taxpayer bear the costs of such loans until they are forgiven. It is certain, therefore, that they will repeat this pattern when it is time to begin repaying the principal and interest on the $10 billion in loan guarantees they currently are collecting at the rate of $2 billion annually. (Repayment of principal and interest begins only 10 years after the Israeli government borrows the money.)

Therefore, whatever legitimate differences may exist about how the cumulative total of U.S. aid to Israel should be compiled, there is no question as to the total in 1996 dollars of current annual American aid to Israel. It is approximately the same as the $6.321 billion in grants and loan guarantees Israel received from the U.S. in the 1993 fiscal year (see chart below).

Each year since then, President Clinton has promised Israel to maintain that level. He has kept that promise scrupulously, despite legislation that mandated that Israel's annual $2 billion in loan guarantees be reduced by the amount that the Israeli government spent on Jewish settlements in the West Bank and Gaza during the previous fiscal year.

The Clinton administration has made such reductions annually since FY 1993 as required by law. …

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