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

by James M. Wall

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?

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 bbc.news.co.