THE FACTS
What you need to know about the United States’ Aid to Israel.
Total: The U.S. will provide Israel with $38B over 10 years (2019–2028).
Annual breakdown: $3.3B in FMF grants + $500M for missile defense (Iron Dome, David’s Sling, Arrow).
FMF mechanics: Israel must use FMF on U.S.-origin goods/services (training, weapons, sustainment).
Off-Shore Procurement (OSP): Israel was allowed to spend 25% domestically, but OSP is phasing out to 0% by 2028.
2019–2028 Memorandum of Understanding (MOU)
Arkansas: RTX (Raytheon) and Rafael (Israel) are building a $33M Tamir (“SkyHunter”) missile plant in East Camden, creating jobs and tax revenue. This will create 30-50 new jobs.
Boeing: Co-producer of Arrow-3/4 missile components in U.S. facilities.
In 2022, Arrow-3 co-production contract that was worth $3.5B was signed with Boeing which shows that a lot of the money we give for aid flows directly back into the United States.
In 2024, Israel signed a $5.2B contract with Boeing for 25 F-15 fighter jets
Lockheed Martin and Israel’s business includes a $6B joint collaboration with Israeli firms
$660M for a Hellfire missile FMF contract
$3B F-35 contract for 25 jets
$26M in contracts for Israel defense development
U.S. industry benefit
Deliveries since Oct 7, 2023: 57,000 artillery shells; 36,000 cannon rounds; 20,000 M4A1 rifles; 13,981 anti-tank missiles; 8,700 Mk-82 (500 lb) bombs.
U.S. policy aims to maintain Israel’s QME (Qualitative Military Edge). Israel is the only regional operator of the F-35.
Post–Oct. 7, 2023: Deliveries and QME
FY2024 federal outlays: ~$6.75T (OMB/Treasury).
FY2024 defense budget: ~$874B (NDAA).
Israel’s $3.8B aid = ~0.055% of federal budget; ~0.45% of defense budget.
U.S. contractors benefiting: Lockheed, Boeing, RTX
U.S. Budget Context
We should care because the $3.8B annual aid package to Israel mostly gets rerouted back into American industries, jobs, and tax revenue.
The MOU requires Israel to spend FMF funds on U.S.-made goods and services, fueling contracts with Boeing, Lockheed Martin, RTX, and smaller defense plants like the new $33M missile facility in Arkansas.
Understanding how these funds are flowing back into the U.S. reframes the debate. U.S. taxpayer dollars are not a “gift” but actually a cycle that strengthens domestic industry and maintains U.S. strategic influence in the Middle East.
Why should we care?
Gen Z should take away that U.S. aid to Israel is both a foreign policy tool and an economic tool. It sustains Israel’s security while also creating jobs across the U.S. defense sector.
For Gen Z, the key point is that aid is not just abstract billions going overseas for nothing, it is tied to local economics, weapons manufacturing, and political lobbying at home.
Most of that spending comes back into the U.S.