Tuesday, October 27, 2026
Elder of ZiyonI posted a chart on X showing where American federal spending actually goes. The $3.8 billion in annual aid to Israel is barely visible next to Social Security, Medicare, interest on the debt and national defense.
It amounts to roughly 0.05% of the federal budget.
I created this particularly as a response to an Abdul El Sayed commercial that blames the price of grocery items on aid to Israel, a particularly absurd proposition. Aid to Israel is a rounding error compared to what the US spends, and what the US wastes.
Yet critics routinely talk as though American healthcare, education and infrastructure are being sacrificed to subsidize Israel.
But there's a more fundamental misunderstanding about US aid to Israel. It isn't charity. It's a strategic military arrangement that benefits the United States in ways that rarely enter the discussion.
And Israel is now proposing to phase out the financial assistance entirely.
Why is it called foreign aid?
American military assistance to Israel grew substantially in the 1970s, particularly after the 1973 Yom Kippur War, and became part of the broader American commitment to regional stability following the 1979 Egyptian-Israeli peace treaty.
It was structured through foreign assistance programs, which is why Israel consistently appears at the top of lists of countries receiving American foreign aid.
But that classification obscures the purpose of the money.
The United States spends billions maintaining military forces in allied countries. According to the Government Accountability Office, the US spent $20.9 billion in Japan and $13.4 billion in South Korea between 2016 and 2019 alone. Germany also hosts a substantial American military presence.
Nobody describes those expenditures as foreign aid to Japan, South Korea or Germany, even though they provide enormous security benefits to those countries and the money gets spent inside those countries, helping their economies.
The comparison isn't exact. American bases also serve American interests, and the host countries contribute substantial funding themselves. But that's precisely the point: The United States spends money on allies because it serves American strategic interests, not because Washington is running a charity.
Israel is unusual because it provides substantial military capabilities in an exceptionally volatile region without requiring America to station large combat formations on Israeli soil.
Israel doesn't get a $3.8 billion check to spend however it wants
Under the current ten-year agreement, the baseline is $3.3 billion annually in Foreign Military Financing and $500 million for joint missile defense programs. Additional emergency assistance has been appropriated during wartime, so $3.8 billion is a baseline. Billions were sent to Israel at the beginning of the October 7 war, although not nearly as much as was sent to Ukraine in its own war.($127 billion and counting.)
Military financing is tied to approved defense purchases. American authorities oversee procurement, impose restrictions on transfers and sensitive equipment, and conduct end-use monitoring. Israel cannot simply redirect the funding into its general budget.
Most of the procurement money must be spent purchasing American military products. Israel once had a special exemption allowing it to spend a portion in its own defense industry, but that exemption is being phased out entirely by 2028.
The practical result is that much of the money returns directly to American defense manufacturers, supporting American production lines, workers and military industrial capacity.
Even missile defense is increasingly manufactured jointly. In August, a Raytheon-Rafael facility in Arkansas delivered its first fully American-made Iron Dome interceptor.
What does America get in return?
This is the part almost always missing from discussions about aid.
Israel is not merely purchasing American military technology. It is developing, improving and combat-testing technology that the United States can benefit from.
Consider the F-35.
The American F-35 program has cost over $100 billion in projected research and development expenditure. Israel operates a specially modified version, the F-35I Adir, with indigenous electronic warfare capabilities and other adaptations.
In May, Israel announced a $34 million contract to develop and integrate external fuel tanks to extend the aircraft's range and reduce its dependence on aerial refueling.
How much would it cost the Pentagon to independently develop, test and integrate a comparable capability? We don't have a reliable public estimate, or proof that this Israeli development will be adopted by American F-35s. But the potential to share engineering and operational knowledge is obvious. The CEO of Lockheed told the Israeli ambassador to the US that Israeli innovations and feedback was worth billions to his company.
That's just one defense contractor.
The same principle applies throughout the defense relationship.
Israel developed Iron Dome, while Israel and the United States jointly developed other missile defense capabilities, including David's Sling and the Arrow systems. These programs have created technology, manufacturing opportunities and knowledge that benefits both militaries.
The US and Israel have also spent years collaborating on methods to detect, map and neutralize terrorist tunnels. Congress has funded hundreds of millions of dollars of joint anti-tunnel research. Such capabilities are relevant well beyond Gaza, particularly when American forces confront enemies operating underground.
Then there's battlefield medicine.
Israel developed the well-known Israeli emergency bandage, used by American military personnel and emergency responders. But the more important contribution may be what Israel is learning about keeping wounded soldiers alive.
An April 2026 US Army report examined Israeli combat medical experience since October 7, highlighting innovations in treating hemorrhagic shock, rapidly evacuating casualties, deploying whole blood close to the battlefield and delivering medical supplies under fire.
These are lessons with the potential to save American soldiers' lives in future wars. No pricve can be put on that.
And there is something else money cannot easily purchase: combat experience. Israel operates against missiles, drones, sophisticated air defenses, tunnels and other threats that American planners must prepare for. Not everything Israel learns is automatically transferred to Washington, but joint exercises, intelligence cooperation and military exchanges provide the United States with operational knowledge that cannot be reproduced in a laboratory.
American generals love Israel, and for good reason. Israel serves as a relatively inexpensive additional research, development and operational testing partner for the Pentagon.
I'm not even talking about intelligence sharing, which goes beyond the aid budget but is part of the close relationship America has with Israel that saves American lives by stopping terror attacks way before they get operationalized.
An aircraft carrier that cannot sink
There's a famous observation, often attributed to former Secretary of State Alexander Haig, describing Israel as an American aircraft carrier that cannot be sunk and doesn't require American soldiers. Whether Haig said it or not, the strategic metaphor is useful.
An American aircraft carrier doesn't operate alone. It requires escorts, logistics, aircraft, thousands of personnel, maintenance and enormous operating expenditures. Sustaining carrier operations in the Middle East is a major undertaking.
Israel isn't literally equivalent to an aircraft carrier strike group. It has its own interests and makes its own military decisions. But it provides a permanent concentration of sophisticated military capability in a strategically important region, without the United States having to build and operate that capability itself.
What would it cost America to reproduce Israel's intelligence networks, military infrastructure, regional expertise, air defenses and combat experience independently?
Nobody has a meaningful answer. But the cost would certainly be enormous.
"The money could be better spent elsewhere" game
The usual argument is to take the money the US spends on Israel and claim that it could be better spent on domestic programs that directly benefit the poor or the ordinary citizen.
But that game seems to only be played against Israel.
In 2025, the California Walnut Commission received $3.6 million from USDA's Market Access Program and another $14 million through a multiyear agricultural promotion program. The money helps market California walnuts internationally and expand demand among foreign consumers.
Other agricultural trade organizations receive similar support. The USDA's FY2024 regional agricultural promotion allocations included $10 million for Blue Diamond Growers/Almond Board of California, $5 million for American pistachio producers and $2 million for the Brewers Association.
One can easily say that these millions, or billions spent elsewhere, could have funded housing or healthcare. Yet only Israel gets that type of faux analysis.
Why?
Israel wants to end the aid anyway
Perhaps the most revealing development is that Israel itself is proposing to phase out American military financial assistance.
In January 2026, Prime Minister Netanyahu publicly proposed eliminating the financial aid over approximately ten years. By May, the two governments had opened formal discussions about replacing the existing agreement, which expires in 2028.
The Israeli proposal is to move from grants toward joint investment in research, development and military production, with both countries contributing and sharing the resulting technology.
This would make the relationship more closely resemble America's defense cooperation with other technologically advanced allies. It would also reduce Israel's dependence on Washington while preserving the substantial benefits of military cooperation for both countries.
The details are still being negotiated, and nothing guarantees that the proposal will become reality. But it hardly fits the popular narrative of a greedy Israel taking advantage of American taxpayers.
The idea that ending $3.8 billion in military assistance to Israel would suddenly fund America's schools, fix its healthcare system or solve its budget problems is innumerate. And the idea that America receives nothing in return is simply uninformed.
From the beginning, aid to Israel was rarely aid. It was an investment. It is an investment that pays a hell of a better return than aid to countries like Egypt and Jordan that do not share American values. The investment pays in saving America billions in defense and in the infinite value of saving American lives.
If one wants to compare the spending on Israel with the return on investment for every federal program, from federal crop insurance premium subsidies ($15B annually) to the National Endowments for the Arts and Humanities ($400M), to Fulbright programs ($270M), let's have that discussion. But the people who claim they care about federal spending towards Israel never want to bring up the many other government programs that cost plenty of money and how to calculate their benefits to ordinary Americans.
Which itself tells you that the people who single out Israel don't give a damn about what is best for America.
