themcglynn.com

13 Dec

Israel approves aid for settlements, funded by the U.S. Taxpayer

The new credits will benefit 110,000 settlers and can be used for vocational training programmes and other educational or cultural activities.

Source: Agencies

The cabinet proposal entitles the settlements to
credits worth $41 million [Reuters]

The Israeli cabinet has decided to list some Jewish settlements in the occupied West Bank as “national priority zones”.

The decision announced on Sunday entitles the communities built on land taken from Palestinians to millions of dollars of extra state funding.

The cabinet’s move comes just weeks after Israel instituted a 10-month moratorium on new building permits in the settlements after months of US pressure.

The cabinet voted to approve a proposal to include settlements in the list of communities designated as national priority zones, which entitles them to credits worth $41 million.

The cabinet had been expected to approve the proposal during its morning session, but put off the vote amid disagreements over which communities inside Israel should be included on the list.

Ehud Barak, the Defence Minister and Labour party leader, insisted that the coastal city of Ashkelon, a bastion of support for his centre-left party, be included, public radio reported.

The cabinet’s vote also decided to create a commission that will decide within 30 days on whether to include Askhelon and other communities on the list, a government official said.

The new credits will benefit 110,000 settlers and can be used for vocational training programmes and other educational or cultural activities.

Thorny issue

The issue of Israeli settlements on land forcibly taken from Palestinians is one of the thorniest in the stalled Middle East peace talks.

The communities affected from the vote are mainly outside the large settlement blocs Israel wants to annex under any peace accord with the Palestinians.

Yuval Steinitz, the minister of finance, told public radio that the move was aimed at expressing support for settlements amid the moratorium.

“With this, we want to send a message [to the settlers] that we understand their difficulties and want to support them,” Steinitz said.

The European Union on Friday expressed concern over the plan and said it would consult its partners in the Middle East Quartet over the move.

Carl Bildt, the Swedish foreign minister, whose country holds the EU’s rotating presidency, said: “Coordination with the Quartet I think is called for in view of the serious nature of such a move.”

He said: “If I understand it rightly, it is a rather serious step,” he said. “If that is the decision that will be taken by the Israeli government, we will most certainly express our views on it.”

One can make the statement that the above and other “Israel National Priorities” are funded by you. the U.S. taxpayer

Sources: CRS Report RL33222: U.S. Foreign Aid to Israel, updated Jan. 2, 2008, plus the FY ’08 omnibus appropriations bill, H.R. 2764.

This estimate of total U.S. direct aid to Israel updates the estimate given in the July 2006 issue of the Washington Report on Middle East Affairs. It is an estimate because arriving at an exact figure is not possible, since parts of U.S. aid to Israel are a) buried in the budgets of various U.S. agencies, mostly that of the Defense Department (DOD), or b) in a form not easily quantifiable, such as the early disbursement of aid, giving Israel a direct benefit in interest income and the U.S. Treasury a corresponding loss. Given these caveats, our current estimate of cumulative total direct aid to Israel is $113.8554 billion.

It must be emphasized that this analysis is a conservative, defensible accounting of U.S. direct aid to Israel, NOT of Israel’s cost to the U.S. or the American taxpayer, nor of the benefits to Israel of U.S. aid. The distinction is important, because the indirect or consequential costs suffered by the U.S. as a result of its blind support for Israel exceed by many times the substantial amount of direct aid to Israel. (See, for example, the late Thomas R. Stauffer’s article in the June 2003 Washington Report, “The Costs to American Taxpayers of the Israeli-Palestinian Conflict: $3 Trillion.”)

Especially, this computation does not include the costs resulting from the invasion and occupation of Iraq—hundreds of billions of dollars, 4,000-plus U.S. and allied fatalities, untold tens of thousands of Iraqi deaths, and many thousands of other U.S., allied, and Iraqi casualties—which is almost universally believed in the Arab world to have been undertaken for the benefit of Israel. Among other “indirect or consequential” costs would be the costs of U.S. unilateral economic sanctions on Iran, Iraq, Libya and Syria, the costs to U.S. manufacturers of the Arab boycott, and the costs to U.S. companies and consumers of the 1973 Arab oil embargo and consequent and subsequent soaring oil prices partially as a result of U.S. support for Israel.

Among the real benefits to Israel that are not direct costs to the U.S. taxpayer are the early cash transfer of economic and military aid, in-country spending of a portion of military aid, and loan guarantees. The U.S. gives Israel all of its economic and military aid directly in cash during the first month of the fiscal year, with no accounting required of how the funds are used. Also, in contrast with other countries receiving military aid, who must purchase through the DOD, Israel deals directly with the U.S. companies, with no DOD review. Furthermore, Israel is allowed to spend 26.3 percent of each year’s military aid in Israel (no other recipient of U.S. military aid gets this benefit), which has resulted in an increasingly sophisticated Israeli defense industry. As a result, Israel has become a major world arms exporter; the Congressional Research Service (CRS) reports that in 2006 Israel was the world’s ninth leading supplier of arms worldwide, earning $4.4 billion from defense sales.

Another benefit to Israel are U.S. government loan guarantees. The major loan guarantees have been $600 million for housing between 1972 and 1990; $9.2 billion for Soviet Jewish resettlement between 1992 and 1997; about $5 billion for refinancing military loans commercially; and $9 billion in loan guarantees authorized in FY ’03 and extended to FY ’10. Of that $9 billion, CRS reports that Israel has drawn $4.1 billion through FY ’07. These loans have not—yet—cost the U.S. any money; they are listed on the Treasury Department’s books as “contingent liabilities,” which would be liabilities to the U.S. should Israel default. However, they have been of substantial, tangible benefit to Israel, because they enable Israel to borrow commercially at special terms and favorable interest rates.

Components of Israel Aid

Israel is the largest cumulative recipient of U.S. aid since World War II (not counting the huge sums being spent in Iraq). The $3 billion or so per year that Israel receives from the U.S. amounts to about $500 per Israeli. Most of this money is earmarked in the annual Foreign Operations (foreign aid) appropriations bills, with the three major items being military grants (Foreign Military Financing, or FMF), economic grants (Economic Support Funds, or ESF), and “migration and refugee assistance.” (Refugee assistance originally was intended to help Israel absorb Jewish refugees from the Soviet Union, but this was expanded in 1985 to include all refugees resettling in Israel. In fact, Israel doesn’t differentiate between refugees and other immigrants, so this money is used for all immigrants to Israel.)

Not earmarked but also included in congresssional appropriations bills is Israel’s portion of grants for American Schools and Hospitals Abroad (ASHA) and monies buried in the appropriations for other departments or agencies. These are mostly for so-called “U.S.-Israeli cooperative programs” in defense, agriculture, science, and hi-tech industries.

Before 1998, Israel received annually $1.8 billion in military grants and $1.2 billion in economic grants. Then, beginning in FY ‘99, the two countries agreed to reduce economic grants to Israel by $120 million and increase military grants by $60 million annually over 10 years. FY ’08 is the last year of that agreement, with military grants reaching $2.4 billion (reduced by an across-the-board rescission), and zero economic grants. Then, in August 2007, U.S. and Israeli officials signed a memorandum of understanding for a new 10-year, $30 billion aid package whereby FMF will gradually increase, beginning with $2.55 billion in FY ’09, and average $3 billion per year over the 10-year period.

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