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April 8, 2013

Will it Benefit Israel to Discuss Financial Aid with Obama?

http://www.jewishjournal.com/blog/item/is_this_the_best_time_for_israel_to_discuss_financial_aid_with_the_us/

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President Obama and PM Netanyahu, Reuters

One of the least discussed aspects of President Obama's visit to Israel was the President's promise "to begin discussions on extending military assistance".

To most observers this probably seemed like good news, and maybe Obama’s intention was to be the bearer of good news. But once the dust has settled on the Obama visit, we must look at this promise and raise the question: Is it good for Israel to discuss its foreign aid package with the Obama administration? Is it good for Israel to discuss its foreign aid package in such tough economic times?

Obviously, these are two separate questions, but both represent a similar understanding: when someone says ‘let's make a deal’, the other person has to carefully consider whether this is truly the right deal and the best deal he (or she) can get. In this case it’s quite complicated, of course, and it’s difficult to determine what exactly Israel expects – the way American aid is constructed can be changed in many ways. There are fundamental questions, though, questions related to timing which can be asked parallel to, or even prior to, questions about the intricacies of a future deal.

Some necessary background: the current 10-year package of $30 billion is based on an agreement signed in 2007 when President George W. Bush was in power. The agreement "elevated Israel’s grant aid from $2.4 billion to $3.1 billion", and was seen as a great achievement and as yet another proof of Bush's close ties with Israel. Around the time the deal was signed, I wrote a column with my (then) colleague Aluf Benn in which we described a "lively discussion in Jerusalem of the question of where the special relations are headed and whether it is a good idea to ask Bush for a farewell gift". It reflected an understanding in Israel that Bush's successor might not be as friendly or as generous. That's always a good reason to strike a deal now rather than later.

Officials in Jerusalem say they believe that Obama's offer is well-intentioned. The current deal extends until 2017 – it ends when Obama will no longer be in office. This means that Israel can make a deal with the Obama administration or it can drag its feet in hope that Obama's successor is going to be more generous than him. Israel should also consider the fact that economic times aren't ideal for any conversation related to financial aid. Just read my interview with Senator Rand Paul from few weeks ago, and consider Paul's new superstar status:

Rand wants foreign aid to end. Period. The fact that Israel buys military equipment in the US doesn't change anything. Or, the way Paul describes it: the US borrowing from China, so it can give money to Israel, so Israel can buy with it in the US – all this is "economic fallacy". Here too, though, Paul has a way of presenting his position more positively: he merely agrees with Prime Minister Netanyahu that Israel needs to be "economically independent". 

Of course, postponing a deal with the Obama administration can work both ways: if economic times become even tougher, the deal that Obama will be putting on the table now might seem like a dream four years from now. Just imagine what would have happened had Israel not closed a deal with Bush in 2007 and waited for the end of 2008 for a deal- imagine how difficult it would be to close any deal when the market was crashing down. And if Obama is replaced by a President less sympathetic, then again, the Obama deal will be a missed opportunity.

All this, of course, is quite theoretical: The President has already said that he was going to negotiate a new agreement, and, as Obama said, "as part of our long-term commitment to Israel's security, the prime minister and I agreed to begin discussions on extending military assistance to Israel" – that is, Israel has already agreed to begin negotiations with the Obama administration. So all that's left for us is merely to guess why:

-          Did Netanyahu want these negotiations because he doesn't believe in gambling on a better future, instead of opting for a decent deal now?

-          Or maybe he wants these negotiations because he doesn't believe that the next American President is going to be friendlier than Obama toward Israel?

-          Or maybe Netanyahu doesn't see a bright future for the US economy and believes that as tough as the situation might be today it is likely to be worse when 2017 arrives.

-          Or maybe Netanyahu's reason is the obvious one: no sane Israeli government would even hint at not being satisfied with such a Presidential offer. Be it the right time or the wrong time, the President has spoken.

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