From Subsidy to Accountability – The Next Phase of the U.S.-Israel Security Relationship

A bipartisan consensus is emerging to end unconditional taxpayer subsidies for Israel’s military and to enforce U.S. law on the use of American weapons.

In January of this year, Israeli Prime Minister Benjamin Netanyahu told The Economist:

“I want to taper off the military aid within the next ten years.”

Asked if he meant reducing it to zero, he replied: “Yes. We’ve come of age and we’ve developed incredible capacities.”

Within hours of Netanyahu’s interview, Senator Lindsey Graham of South Carolina – one of Israel’s staunchest Republican allies in the Senate – tweeted that he would propose accelerating that timeline:

“I will always appreciate allies who are trying to be more self-sufficient,” he wrote. “Given what the Prime Minister said, we need not wait ten years.”

Both Netanyahu and Graham pointed to the same underlying reality: Israel today has one of the most dynamic and advanced economies in the world. With a per capita GDP higher than countries like the United Kingdom, France and Japan, Israel is more than capable of paying for its own defense – just as America’s other wealthy allies already do.

Yet the United States provides Israel with $3.3 billion annually in Foreign Military Financing - more than half of all such funding the U.S. distributes globally – on top of an additional $500 million/year for joint missile defense systems and other occasional significant supplemental appropriations.

That reality raises a straightforward question: why should American taxpayers continue to subsidize the defense budget of a prosperous ally, particularly at a time when the U.S. faces its own significant fiscal pressures?

Netanyahu and Graham are not alone in this view. For years, analysts and policymakers across the political spectrum have been arguing that Israel no longer needs generous economic subsidies.

On the right, in 2023, Jacob Siegel and Liel Leibovitz wrote in Tablet that the relationship should become “more forthrightly transactional,” noting that ending aid would not mean ending cooperation. On the contrary, they argued, it would clarify mutual interests and strengthen the relationship.

Six years ago, former Israeli Foreign Minister Yossi Beilin and former U.S. Ambassador Dan Kurtzer proposed phasing out security assistance, arguing that it would ultimately benefit both countries.

Similar arguments have emerged on the left as well. Congresswoman Alexandria Ocasio-Cortez recently noted that Israel is “well able to fund the Iron Dome system,” and Congressman Ro Khanna argued that when it comes to Iron Dome – a system he called “important and saves lives” – Israel should be able to buy it on its own.

Across the political spectrum, a growing view is emerging: the US-Israel relationship should be “normalized.”

Supporters of Israel - many raised on the vision that the Jewish people just want Israel to be treated like all other countries - should welcome the development. The benefits of disproportionately large financial assistance today are outweighed by the damage to Israel when that financial support becomes a divisive wedge in American politics.

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To be clear: a call to end American financial subsidies for Israel’s defense is not a call to end the U.S.-Israel security relationship.

Israel faces significant threats and security challenges - from Iran, terror groups and more. The United States should continue to support Israel in confronting those threats in a host of important ways including intelligence sharing, operational coordination, joint exercises, and cooperative development of defense technologies.

Security assistance does not have to - and should no longer - take the form of unconditional financial subsidy. Instead, it should resemble the support we provide our other advanced allies.

Arms sales – paid for by Israel and governed by U.S. law - should continue in accordance with all relevant statutes including the Leahy Law, the Arms Export Control Act and the Foreign Assistance Act.

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The U.S. should continue to sell Israel important - and jointly developed - air defense systems like Iron Dome, David’s Sling and Arrow.

I cannot emphasize enough how important missile defense systems such as Iron Dome are to the Israeli people.

Over these past weeks and years, these systems have saved the lives of countless civilians. The technology underlying them was developed jointly by Israel and the U.S. and the manufacture of the interceptors and launchers is governed by bilateral agreements.

The United States should continue to supply what Israel needs for the defense of its people from Iranian, Hezbollah, Hamas and Houthi missiles - but the time is coming for Israel to pay for what it needs, as other prosperous countries do.

This approach aligns with the center of gravity in American Jewish opinion - reflecting the emotional attachment that 70 percent of Jewish Americans feel for Israel and simultaneously the opposition of 70 percent to unconditional American military and financial assistance.

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Congress should retain, exercise and expand its authority to review and, when necessary, block specific weapons sales that do not align with American law or interests.

Too often, when it comes to Israel, enforcement of our laws has been inconsistent or avoided altogether.

In recent years, Israeli military actions and policies – from Gaza to the West Bank and now in Lebanon – have increasingly crossed lines that raise serious questions about whether U.S.-supplied weapons are being used in ways consistent with American law, policy and stated interests.

That’s why J Street supports the Ceasefire Compliance Act, new legislation which would ensure that if Israel continues to pursue policies in Gaza and the West Bank that run counter to American interests, it should not be able to use U.S. weapons in those areas.

This too is part of normalizing our relationship with Israel. Congress regularly places conditions on the support we provide to recipients of American assistance including Ukraine, Colombia, Egypt, Jordan, Iraq and the Gulf States.

It’s also why J Street urges Senators this week to vote to disapprove two sales to Israel - one of large bombs and one of bulldozers - both to demonstrate consequences for misuse of these items in Gaza and to express consistent opposition to the war in Iran.

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A transition toward a more normalized security partnership would not weaken the U.S.-Israel relationship. It would strengthen it.

It would place the relationship on a more sustainable and less politically polarizing foundation. It would align U.S. policy with Israel’s own stated aspirations for self-reliance.

The technological, economic and defensive achievement that Israel has accomplished and that make it self-sufficient should be a matter of pride for Israel’s supporters around the world. These are developments the founders of the country would have deeply valued.

The exact timetable for phasing out taxpayer subsidies should be worked out carefully. The United States should honor existing commitments, including those in the 2016 memorandum of understanding, through their conclusion in the next two years.

But after that, a responsible yet rapid phase-out is needed – a step that would move the U.S. and Israel toward a more mature, balanced, and ultimately more resilient partnership – one grounded not only in shared interests, but in shared standards and accountability.

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