Dear Friend of FLAME:

The Obama and Netanyahu administrations have been negotiating for months on the next 10-year aid package between the U.S. and Israel. The last 10-year deal was signed in 2007, so it’s high time for renewal. But this deal has sparked heated controversy among Israelis and pro-Israel activists.

The first question raised was whether Obama’s is the right administration to be negotiating with—or, given Netanyahu’s stormy relationship with the President, whether the Prime Minister should wait a few months and take his chances making a deal with either Clinton or Trump.

However, Netanyahu has clearly decided that the devil he knows is better than the one he doesn’t, so his team has been actively pursuing negotiations with the White House. They are rumored to be close to a deal.

Nonetheless, influential voices in Israel, such as former Israel ambassador to the U.S. and current member of the Knesset Michael Oren, have recommended against accepting the agreement too quickly in its current form.

Three major flaws give weight to critics of the pending deal, according to Oren. First, the Obama administration wants Israel to pledge not to seek additional funding from Congress, which could be necessary for Israel in the future. Second, the U.S. is insisting that all aid money be spent in the U.S., whereas currently only 75% is required to be spent here, with 25% being spent largely with Israeli defense firms. Third, Oren believes doing a deal now could compromise Israel’s leverage ahead of a possible Obama peace initiative at the U.N., which Israel would likely oppose.

Make no mistake: Israel wants, depends on and is grateful for the military support it receives from the United States. This aid is critical in helping Israel survive (and thrive) in the world’s toughest neighborhood. The agreement is also extremely valuable to the U.S., which gains its most stable and powerful ally in the region, as well as untold advantages from the technology and intelligence exchanges that accompany this relationship.

This week’s FLAME Hotline featured article is a short piece by the pro-Israel commentator Shoshana Bryen, Senior Director at the Jewish Policy Institute. Bryen explains details of the $3.9 billion aid package and why, despite its record-breaking sum, Obama’s sharp-elbowed deal points make it so difficult for Israel to say “yes.”

Expect this deal to come down the road soon—perhaps even this week—and it will be both momentous and controversial. To help you hold your own in conversations with friends, family and colleagues on this thorny matter—especially when you encounter those who oppose this aid—take a few minutes to review Bryen’s incisive analysis, below.

In addition, I hope you’ll also quickly review the P.S. immediately below, which describes FLAME’s hasbarah campaign that clearly and convincingly explains why this financial support is such a great investment for the United States.

Best regards,

Jim Sinkinson
Executive Vice President, Facts and Logic About the Middle East (FLAME)

U.S.-Israel Memorandum of Understanding: An Unbalanced Deal

By Shoshana Bryen, Jewish Policy Center, August 11, 2016

A Memorandum of Understanding (MOU) is an agreement between two parties—in this case, the governments of Israel and the United States. It is less than a treaty, more than a handshake. The first MOU was signed in 1981, recognizing “the common bonds of friendship between the United States and Israel and builds on the mutual security relationship that exists between the two nations.” The current MOU, signed in 2007, represented a 10-year commitment. The Obama Administration and the government of Israel have been negotiating a new 10-year agreement that will come into effect in 2017.

It is hard to get the nuance right in a security arrangement between a superpower and a small country, even if the small country is a first-world democracy in terms of education, income, technology, and political structure. It is harder when large sums of money are involved, and harder still when the small country is, in military terms, a “security producer,” one that provides more security to a region than it requires in assistance, but is still uniquely threatened in the world.

The Obama Administration is making it harder, perhaps because one of the President’s goals has been to remove the United States from its role as security guarantor not only for Israel, but also for the region, and possibly, it seems, for the rest of the world, such as the South China Sea, Crimea and the Balkans.

The administration proposes somewhat more money for Israel—from $3.1 billion to close to $4 billion—but with important caveats:

1) 100% of the money will be spent in the U.S., while Israel is presently able to spend 25% in Israel.

This is a subsidy for U.S. defense industries and constrains Israel’s defense choices by forcing the IDF to exclude weapons from Europe and elsewhere. While some think of Israel as an expense to the U.S., the fact is that Israeli R&D innovations—shared with the U.S. by agreement—have helped mitigate the decline in the U.S. missile defense budget in an era of growing threats. Without the ability to spend some money in Israel, it will be harder for smaller defense and high-tech industries to keep up.

2) The total figure will include money for missile defense, which in this administration has been an add-on from Congress. That makes the increase substantially less than it appears to be.

This could be particularly problematic: an administration that opposes missile defense in principle—as does the Obama administration—could effectively stifle Israel, which protects its people with a layered missile defense system. As Iran continues to violate UN prohibitions on ballistic missile testing, and Hamas and Hezbollah increase their arsenals, the consequences could be devastating.

3) Israel will be prohibited from asking Congress for additional funds, effectively removing a bipartisan center of support for Israel’s security from the equation and reducing Israel’s flexibility in addressing rapidly emerging threats. This year, Congress wrote in $42.7 million for anti-tunnel cooperation—something that emerged as essential only after the 2014 Gaza war.

In deference to the outsized threats and acknowledging Israel’s status as an American ally, it has been U.S. policy for decades and law since 2008 that “Israel will be made capable of defending itself against and defeating any likely combination of conventionally armed adversaries.” This is known as Israel’s Qualitative Military Edge (QME).

It was simple once—Arab armies were Soviet equipped and trained. But the world has changed.

On the plus side, Jordan joined Egypt in making peace with Israel, and the Soviet Union disappeared. On other hand, the U.S. has been selling arms and equipment to Arab states that maintain a state of war with Israel. Israel still receives more cutting edge technology, but at some point, the quantity of oil-financed Arab purchases can tip the quality scales. Saudi Arabia spent $9.3 billion on U.S. weapons last year.

To be fair, Israel understands Saudi purchases to address the war in Yemen and the larger conflict with Iran, not aimed against Israel. Israeli-Saudi relations have thawed at least temporarily, but other threats, some conventional, some not, have increased.

ISIS, Hamas and Hezbollah are what former IDF Chief of Intelligence Amos Yadlin calls “substate actors”—terrorist organizations that have attributes of statehood, such as territory, populations, etc. Syria remains in a state of war with Israel and as the civil war continues, Iran and Hezbollah have forces and weapons close to the Golan Heights. Iran is only a decade away, if that, from the freedom to openly pursue its nuclear capability as the JCPOA ends.

It was the release of hundreds of millions of dollars by the U.S. to the Islamic Republic, destined to improve and enhance Iranian military capabilities, which added urgency to Israel’s request for missile defense and other capabilities.

The U.S., then, is on both sides of Israel’s security conundrum.

On one hand, U.S.-Israel security cooperation is embodied in QME joint R&D on missile technology, joint training and exercises (most recently a joint missile defense exercise in Israel), and Israel’s new diplomatic mission to NATO Headquarters.

But on the other hand, having to spend all the money on U.S. procurement, U.S. arms sales to countries still in a state of war with Israel, the transfer of hundreds of millions of dollars to Iran and removing Congress from its pivotal role as a security partner for Israel are all positions that clearly express administration weariness and irritation with Israel.

Israel, of course, does not have to sign. There is a new administration coming, and no doubt Israel can manage evolving bilateral relations with the U.S. under either party. There is, however, something to be said for the reassurance of a 10-year American commitment, even if the current terms are not ideal.

On balance, Israel is a strong, accomplished, and increasingly capable country with both military and civilian assets sought by countries around the world. It finds itself in a vastly improved international situation even as its neighborhood declines. It would have been in the larger interest of the United States to enhance those capabilities rather than trying to constrain them.