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U.S. Budget Cuts Could Cramp Aid to Israel

By Nathan Guttman December 24, 2010

In its last days, the outgoing 111th Congress drew the battle lines for the next debate Democrats and Republicans will have about Israel.

And the debate is all about money.

The failure to reach a bipartisan understanding on a new spending bill forced both sides to agree to a short-term continuing resolution, which will keep all government spending at the same levels of 2010 through March. That’s where the problem begins for the pro-Israel community.

U.S. foreign aid to Israel is set according to a 10-year Memorandum of Understanding that includes an annual increase in funding. In 2010 Israel received $2.775 billion and in 2011 it expected to receive $3 billion. But freezing spending means that at least until March, Israel gets less money.

Now, the consensus on Capitol Hill is that once a new budget is passed, Israel will get the increase in aid. No one is seriously talking about cutting back on U.S. assistance to Israel (which is all for military aid, and most is spent on purchases from American defense industries).

But still, the short-term budget will cost Israel some money. First, since aid to Israel is all provided in advance, the Israelis will loose the interest they could have made if the increased sum had been approved. The second financial hit is the extra funding for Iron Dome project — a $205 million bill meant to help Israel fund its anti-rocket system designed to protect citizens from Hamas attacks along the Gaza border. And third is a $15 million increase to other missile defense programs, which also didn’t make it to the short-term continuing resolution.

Pro-Israel lobbyists worked hard to prevent this from happening, but with Republicans looking for a show of their commitment to fiscal restraint even as Democrats seek budget increases, it was just not meant to be.

For Democrats, this is a sign that a Republican-led house will re-open the issue of funding to Israel and potentially threaten aid. “I am very worried that Republicans in Congress are putting aid to Israel on a collision course with other interests,” California Democrat Henry Waxman told the Forward. Waxman, the outgoing chairman of the House Energy and Commerce Committee said that Republicans’ decision to block increased aid to Israel and funding for Iron Dome is reason for concern. “Israel is relying on this money and this is no time to play games with foreign aid and with aid to Israel,” Waxman said.

Another reason for alarm among pro-Israel Democrats was a remark made by Republican Ileana Ros-Lehtinen, the incoming chairwoman of the House Foreign Affairs Committee. In an interview with the Jerusalem Post, the Florida Republican hinted that a cut could be possible, if Republican leadership pushes for it. “If they say 5 percent across the board for everybody, then that’s the way it is,” Ros-Lehtinen said in the interview.

On December 23, however, her office put out a statement clarifying that no cuts are in the works. “Security assistance to Israel is a top priority for Republicans,” the statement read, adding that “charges to the contrary are baseless and politically motivated.” Will this end the debate?

Probably not. For Democrats, proving that Republicans are weak on aid to Israel is a winning card, not one they would want to give up.

Republicans, on the other hand, can easily end the discussion by simply passing the increased aid to Israel and by funding all other programs once the new Congress begins its work. But starting off with commitments not to cut spending won’t resonate that well with voters who sent a whole new class of Republicans to Capitol Hill with a clear mandate to cut spending wherever possible. So at least for the next few months, the debate is on.

Nathan Guttman, staff writer, was the Forward’s Washington bureau chief. He joined the staff in 2006 after serving for five years as Washington correspondent for the Israeli dailies Haaretz and The Jerusalem Post. In Israel, he was the features editor for Ha’aretz and chief editor of Channel 1 TV evening news. He was born in Canada and grew up in Israel. He is a graduate of the Hebrew University of Jerusalem.

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