WASHINGTON WATCH: Netanyahu's costly blunders

Netanyahu wanted to increase Israel’s annual military assistance from the current $3.1b. to $5b. in a 10-year aid deal, not including missile defense funding.

July 6, 2016 20:56
4 minute read.

Rafael Advanced Defense Systems’ C-Dome system, a sea-based version of the Iron Dome anti-rocket battery, fires from an Israeli Navy missile ship. (photo credit: screenshot)

Prime Minister Benjamin Netanyahu’s decision to follow a course of confrontation over cooperation with US President Barack Obama may wind up costing Israel $10 billion or more in defense assistance over the next decade.

Through a combination of partisan meddling in US politics and unrealistic demands, the prime minister is putting in jeopardy ongoing negotiations for a new and – for Israel – beefed up Memorandum of Understanding (MOU) on aid.

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Netanyahu wanted to increase Israel’s annual military assistance from the current $3.1b. to $5b. in a 10-year aid deal, not including missile defense funding.

Obama was anxious to extend the MOU, which expires next year, before leaving office in January to keep a promise to Congress to substantially increase aid to Israel following the Iran nuclear agreement.

Obama wanted Israel’s promise not to try to block the Iran deal, and as a sweetener he offered substantial aid hikes plus an extra squadron of F-35s, the world’s most advanced and most expensive stealth fighter. Netanyahu, convinced he was dealing from a position of strength, refused to negotiate until after Congress dealt with the Iran pact, which he thought he could block. Instead, he chose to declare war on Obama and his Iran policy by making an alliance with Congressional Republicans and leading their failed attempt to scrap the deal.

The self-anointed expert on everything American misread the political landscape in Washington and lost any advantages he may have had in writing a new MOU.

He started out demanding $5b., in part as compensation for the increased danger posed by the Iran deal, and said if Obama wouldn’t agree he’d wait to cut a deal with the next president. He enlisted friends on Capitol Hill to increase pressure on Obama to meet his demands. A bipartisan letter from 83 senators urged the president to agree to a significant but unspecified aid hike.

It might have been very tempting to let Netanyahu wait to see if he could get a better deal next year, but Obama felt he had made a commitment to Congress, said a well-placed administration source.

National Security Advisor Susan Rice told signers of the Senate letter that Israel will get the “largest pledge of military assistance to any country in US history” plus “unprecedented multi-year commitment of missile defense funding.” But she warned that negotiations are taking place in “an especially challenging budgetary environment” and Netanyahu can’t get everything he wants.

That is the same message conveyed personally to the prime minister by top Republicans like Speaker Paul Ryan and Sen. Lindsey Graham, who chairs the Senate panel that writes foreign aid spending bills, and by AIPAC. Cut a deal with Obama now, don’t wait for his successor, they advised. That was echoed by Defense Minister Avigdor Liberman and Finance Minister Moshe Kahlon.

Ignore them, recommended David Friedman, Donald Trump’s real estate lawyer and Israel adviser. He told Israel’s Channel 2 News that Netanyahu should wait for his boss to become president because then aid to Israel “will go up” and “won’t be small.”

It is unknown whether the prime minister is getting similar advice from his friend and financial backer Sheldon Adelson, who has pledged $100 million to help elect Trump.

The foreign aid bill now before Congress includes $3.1b. in grant aid for Israel – more than for all other countries combined – and nearly a quarter of that ($815.3 million) is for Israel to spend at home on defense procurement plus another $400m.

primarily for jet fuel. No other country gets such a deal, which dates back to the 1980s, and the administration wants to phase it out. It no longer serves the best interest of both countries, said Rice.

Israel’s defense industry no longer needs to be propped up and that money should be spent in the United States, like the rest of the aid to Israel and other countries, in the administration’s view. With Israel being one of the world’s largest arms exporters, this provision subsidizes Israeli firms that are in direct competition with American firms and takes away American jobs, argues the White House.

Obama also wants the 10-year MOU to include funding for special programs like the Arrow, Iron Dome and David’s Sling missile defense projects, which are currently negotiated separately every year.

What Israel is asking would “deplete” the Pentagon’s own missile defense funding, said an administration official. If Netanyahu gets the $5b. he wants for military aid, there would be nothing left for any other country. Congress has been loathe to vote increases in non-Israel aid (a popular political wedge issue) and increases will be less likely next year when Speaker Ryan and Republicans plan to seek significant domestic spending cuts.

The administration wants to lock in the aid levels set in the MOU while Netanyahu sees them as starting points to lobby Congress for increases.

In recent weeks talks have accelerated with Netanyahu apparently listening to the advice of friends in Washington and colleagues in his cabinet. Knowledgeable sources say there is no chance Israel will get the $5b. a year Netanyahu initially demanded, and in fact the deal, which could be concluded this summer, will come in close to the original Obama offer of $3.7b., the source said.

Netanyahu’s failure to take advantage of the opportunities presented early last year before the Iran battle, his meddling in American partisan politics and his threat to wait for the next president to meet his demands backfired on him.

Netanyahu gambled and lost on the Iran deal, and his poor judgment may wind up costing Israel $10b. over the next decade in lost aid increases and other benefits.

And that doesn’t include the damage he has done to support for Israel from liberal Jews, the Congressional Black Caucus and a growing number of progressive Democrats who are starting to rebel against AIPAC’s partisan-tinged version of pro-Israel fealty.

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