The Israel embassy in Washington has sought to portray the U.S. military
aid to Israel as a boost to the American economy. Diplomats stressed that 75
percent of U.S. military aid to Israel was required by law to be spent in
the United States, thus bolstering the American defense industry.
"Now we have $3 billion in an annual arms package," former Israeli
ambassador to Washington, Danny Ayalon, said. "Most of which is referred
back to the military industries based in the United States, which serves
their economic interests."
Israeli diplomats have also stressed the need for U.S. aid as part of
any Middle East peace process. The diplomats pointed to the billions of
dollars in U.S. economic and military assistance to cement Israel's peace
treaties with Egypt and Jordan.
In 2008, the United States agreed to a 10-year defense package that
amounted $30 billion in aid to Israel. The sources said this could be the
first target of either the Obama administration or the Democratic-controlled
Congress. The administration already plans to cut 10 percent of its defense
budget in 2010.
Another target could be $4.5 billion in U.S. loan guarantees provided to
Israel. Israel has never used the credits.
"Should the United States face a grave financial problem, the
administration could ask for a unilateral cutback in the budget, or postpone
the contracts," said Amnon Neubach, a former economic attache at the Israel
embassy in Washington. "But that kind of move would not be an anti-Israel
one."
