Benjamin Netanyahu will transform the aid relationship between Israel and the United States

The silence was deafening over the weekend and Sunday after Prime Minister Benjamin Netanyahu, for the first time, publicly outlined one of the most sweeping transformations in U.S. relations in decades, saying he plans to cut U.S. military aid by 2038.

In an interview with The Economist on Friday, which most media outlets only picked up on Saturday, Netanyahu said he would seek to restructure the $38 billion Israel received and will receive from the United States under the previous memorandum of understanding.

He was referring to the memorandum of understanding which runs from 2018 to 2028 and which provides for joint investments in major products such as the F-35, F-15I, artificial intelligence and other specific items.

According to the prime minister, the political terrain has changed in the United States in terms of how much the country is willing to spend on foreign aid, and the Israeli economy has grown enough that it can attempt to move toward greater independence in arms production.

History of American aid to Israel

Historically, Washington has provided substantial military aid to Jerusalem, dating back to the 1967 Six-Day War, with a major leap during the 1973 Yom Kippur War.

This was followed by a long series of memorandums of understanding beginning in 1981 with an additional $425 million increase in aid to Israel, a significant sum at the time until today.

There were no reports that US President Donald Trump asked Netanyahu to ask for less aid before his comments.

U.S. President Donald Trump points at Israeli Prime Minister Benjamin Netanyahu as they shake hands during a news conference after their meeting at Trumps Mar-a-Lago club in Palm Beach, Florida, U.S., December 29, 2025. (credit: REUTERS/JONATHAN ERNST)

Sources indicated that the prime minister could have acted preemptively based on his reading of the MAGA movement and the Trump administration's aggressive anti-foreign aid stances, as well as strong criticism of military aid to Israel from US Democrats since 2024.

Despite these sweeping changes, Netanyahu has received no criticism from his main opponents, such as former Prime Minister Naftali Bennett.

The prime minister also did not encounter negative reactions from the opposition and former senior security officials, including Blue and White leader Benny Gantz, Yashar Chairman Gadi Eisenkot or Democrats leader Yair Golan, despite requests for comment from The Jerusalem Post.

It is unclear whether they did not comment because they agree with Netanyahu, something they did not want to emphasize, or because even if they disagree they might believe they will have less political traction with average citizens on this issue.

These political figures may also think they would do better by sticking to criticism of the government's support for the Israeli military's ultra-Orthodox exemptions, the failure to investigate the October 7 massacre, and criminal cases like Cases 1000, 2000, 4000, and Qatargate.

Moreover, no current defense official has commented on the issue either. Additionally, most former IDF and Mossad defense officials, including those who have at times been willing to criticize Netanyahu, declined to comment on the matter when asked by the Post, or said they would need more recent classified updates to fully assess the situation.

Part of this started with a 2025 US Heritage Foundation report that called for reducing aid to Israel starting in 2032 and ending it by 2047.

Supporters of a new approach to the Israeli-U.S. memorandum of understanding, while not necessarily the same as the Heritage Foundations' position, said change was needed to respond to changes in the United States and Israel.

These supporters include former Ambassador to the United States Michael Herzog, the Misgav Institute for National Security and Zionist Strategy, and likely Israeli Ambassador to the United States Yeichel Leiter, who was supposed to attend the launch of the Heritage Foundation reports until its controversial contents were leaked.

US senator encourages Israel's aid independence

A FASCINATING and rapid turnaround on the issue came from Republican Senator Lindsey Graham, a staunch supporter of Israel.

Less than three weeks ago, and before Netanyahu's critical meeting with Trump on December 29 in Florida, Graham vehemently rejected the new model of partnership rather than aid.

Some in Israel, I think, including Netanyahu, think these days that Israel should scale back the next memorandum of understanding with regard to dependence on the United States. Big mistake… The day it becomes clear in Washington that you really don't need us will be a big mistake… The people you're trying to please will never be happy, Graham told the Post.

There is an element of anti-Semitism, anti-Israel in America, and it is growing. In my opinion, the biggest mistake we can make is letting these loud voices subjugate the relationship, he added. Now is the time for relationships to develop. If you think the time has come to weaken relations with Washington, you do so at your peril.

However, immediately after Netanyahu's public comments on Friday, Graham reversed course, saying we don't need to wait 10 years to start cutting military aid to Israel.

The billions in taxpayer money that would be saved by accelerating the end of military aid to Israel will and should be reinvested in the U.S. military. I will present a proposal to Israel and the Trump administration to significantly accelerate the timetable, Graham wrote on X/Twitter.

The 10-year period to cut aid was also much shorter than Heritage's proposal to cut aid by 2047.

Criticisms of Netanyahu's new policies

Some nevertheless criticized Netanyahu's new policy.

Yesh Atid leader Yair Lapid told KAN News that he viewed Netanyahu's statement as merely seeking global headlines and that the prime minister had committed a professional error.

This is no reason to abandon such important security cooperation. This will increase the tax burden on Israel and take us out of the world military-technological summit. This will weaken the Israeli-American lobby, which is already weakened, Lapid said.

Former head of the National Security Council and head of the Government 2025 defense committee, Professor Jacob Nagel, also criticized Netanyahu's abandonment of foreign aid ideas, while remaining broadly supportive of the vast majority of the prime minister's policies.

In a recent opinion piece in the Post, which Nagel said he still supports, he wrote that Netanyahu should outline Israel's urgent need for major U.S. platforms over the next decade: various fighter jets, aerial tankers, helicopters, munitions and thousands of light armored vehicles for ground forces.

The next deal must include full implementation of all aid to the United States, creating thousands of American jobs. It should focus only on the main platforms and eliminate all other uses that only partially characterized previous decades.

Furthermore, he stressed that discussions are ongoing about the need to reduce Israel's dependence on the United States, but that it is important to understand that the air platforms do not increase Israel's dependence, since Israel would purchase them from the United States anyway.

The construction of an Israeli Defense Industrial Base (DIB) to strengthen Israeli munitions independence was strongly recommended by the Nagel Committee, and it will receive billions of shekels of investment over the coming decade. However, this will not include the development and production of these major platforms in Israel, Nagel wrote.

Purchasing the main platforms with US assistance will allow Israel to allocate its own budget to building a stable DIB in areas where Israel needs to be independent. At the same time, Israel will use these air platforms to conduct vital missions not only for Israel but also for the United States throughout the Middle East, at the lowest cost President Trump can find. [while] help build the American DIB.

Critically, he made clear that irresponsible claims that the Trump administration's pressure on the Prime Minister to make diplomatic concessions stemmed from security assistance demonstrated complete ignorance and lack of understanding of the global balance of power.

The United States is Israel's central and sometimes only ally, the defense expert noted. As the world's leading superpower, it will put legitimate pressure on its allies, including Israel, to support U.S. interests, even if security assistance is cut to zero.

In other words, Nagel said Israel should try to maintain military aid for critical platforms, emphasizing that eliminating such aid would not free the Jewish state from U.S. pressure over its policies from time to time.

Foundation for Defense of Democracies Senior Director Bradley Bowman provided detailed recommendations for restructuring the previous memorandum of understanding into a strategic partnership that would maintain substantial U.S. aid to Israel.

For example, he writes, Israel, for its part, would commit to 1) devoting at least 4.5% or 5% of its gross domestic product (GDP) each year to defense for the duration of the agreement; 2) spend at least $1 billion. each year, with its own resources, it purchases military equipment made in the United States and strengthens the American defense industrial base (DIB); and 3) invest at least $150 million. annually on combined U.S.-Israeli military research and development efforts to advance shared combat readiness priorities.

In exchange for these commitments, the United States would provide Israel with $5 billion. each year through what would be called a Partnership Investment Incentive or PII. This personal information would allow Israel to use existing foreign military financing (FMF) mechanisms to acquire American military equipment, Bowman said.

There would be two differences from the current MoU. First, Israel would be required to spend all of its personal information in the United States. Israel would also be required to spend PII in areas designated by both militaries as combat readiness priorities and by the Pentagon as DIB priorities, he wrote.

It is unclear whether Netanyahu's public statements indicate that turning military aid into joint investments is a done deal, or whether they were aimed at building goodwill with Trump in a way that would allow the prime minister to preserve aspects of military aid in creative ways behind the scenes.

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