The U.S.-Israel Memorandum of Misunderstanding
(Bloomberg View) -- According to the governments in Jerusalem and Washington, this was a great week for the U.S.-Israel relationship. The two countries arrived at a "memorandum of understanding" to extend the U.S. subsidy of Israel's military budget until 2028. President Barack Obama, no fan of Israel's current leader, declared: "America's commitment to Israel's security is unshakable."
It would be pleasant to believe this. It's not true though. America's commitment to Israel's security is quite shakable. Indeed, Obama has done much of the shaking. That reminder puts the new memorandum into perspective.
For much of Obama's presidency, he said he would lift sanctions on Iran in exchange for Iran dismantling its nuclear infrastructure. This was a big part of how he dissuaded Israel's prime minister, Benjamin Netanyahu, from bombing Iran's nuclear facilities.
But that's not the deal the U.S. and other nations struck with Iran. Obama ended up agreeing to legitimize and legalize Iran's nuclear infrastructure and to lift limits on production of nuclear fuel after 15 years. When Prime Minister Benjamin Netanyahu protested Obama's Iran bargain to Congress, the White House quietly encouraged fellow Democrats to boycott his speech.
After all of this bad blood, in the last months of his administration, Obama has decided to sign an agreement with Israel that guarantees $3.8 billion per year between 2018 and 2028. On paper it seems generous. As Susan Rice, Obama's national security adviser, said Wednesday, this is the "single largest pledge of military assistance -- to any country -- in American history."
The fine print tells a different story. The key word in Rice's statement is "pledge." Congress is the body that appropriates the annual aid budget. When Obama is long gone, it will be Congress that doles out the money for Israel to spend on U.S. military equipment. So one aspect of the aid deal should raise eyebrows: terms saying that Israel will stop making its case directly to Congress for military aid.
Morris Amitay, a former executive director of the American Israel Public Affairs Committee, or Aipac, told me he had never before heard of a president asking a sovereign country, as part of an aid package negotiation, not to lobby Congress.
At first Netanyahu didn't want to give up Israel's ability to ask Congress for more funding. But he relented. A secret annex to the memorandum signed Wednesday requires Israel to forgo any funding Congress would want to give it that exceeds what was in the aid agreement that expires in 2018.
It's unclear how restrictive the lobbying restriction will actually be. Israel doesn't lobby Congress much. Far more pro-Israel lobbying is done by Aipac, which comprises U.S. citizens. Could an agreement between Israel and the U.S. limit the rights of Americans to petition Congress? When I put this question to Aipac's spokesman, Marshall Wittman, he told me: "The agreement, of course, is only between the two governments. When the two governments reach an agreement on an issue, we give that factor great weight." For the time being, Aipac says it will lobby Congress to enact the terms of the new 10-year aid agreement signed on Wednesday.
Obama's 11th-hour aid deal is less than it seems, not only because the White House cannot appropriate and because the lobbying restriction is off target, but also because Obama's successors may not honor his pledge. Obama himself discarded an agreement with Israel's leaders that was made by George W. Bush and supported by Congress, to accept the legitimacy of some settlements in and around Jerusalem. (That agreement was made as part of negotiations to get Israel to unilaterally withdraw from Gaza.)
The White House also got its way on another key issue known as the "off-shore procurement" carve out, whereby Israel is allowed to spend around 26 percent of the U.S. aid on its own defense industry. In the new aid deal, Israel will spend all of the U.S. subsidy on U.S. defense equipment by 2024.
In this sense the U.S. aid to Israel is a subsidy to American defense companies. The U.S. also retains the leverage that comes from subsidizing around 20 percent of a sovereign nation's defense budget.
Of course, Israel doesn't even need the money. When the U.S. began giving Israel serious military assistance in the 1960s, the country's planned economy was minuscule. In the 1970s it faced a very real boycott, backed by wealthy nations like Saudi Arabia (as opposed to an inconsequential boycott backed by U.S. and European college professors). Back then, the Jewish State really needed as much help as it could get.
Today, Israel's economy is thriving. In the last 10 years, the country's gross domestic product has nearly doubled, to $230 billion. Israel has discovered great deposits of natural gas. Its lawmakers in recent years have discussed starting a sovereign wealth fund. Israel is a key partner with the U.S. arms industry.
Defenders of the U.S. aid package to Israel say that the aid to Israel sends a message to its adversaries at a time when many in the Middle East doubt U.S. resolve. If Obama decided to forgo extending the aid package, others in the Middle East would begin to question the strength of the U.S.-Israel alliance.
But the way to show resolve is not through arms sales and defense assistance. It's through action. In this respect Obama reaps what he sows. He decided to sit on the sidelines as Syria imploded. He decided to intervene in Libya and then leave the reconstruction to others. He decided to cut a deal with Iran that enriched the state as it was making war on U.S. allies in the region. He decided to exit Iraq and stay relatively silent as its leaders persecuted the country's Sunni minority. He decided to let Russia set up airbases in Syria to defend a dictator.
All of this has shaken America's alliances throughout the Middle East, not just with Israel. The way to fix that is not by congratulating Obama on an aid package that will begin two years after he has left the White House. It's to make sure the next president begins to heal the damage caused by the current president's blunders in the region.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story: Eli Lake at email@example.com.