Foreign Aid to Israel by Year: Military Aid and Missile Defense

The United States has provided Israel approximately $174 billion in bilateral assistance and missile defense funding since 1948 in nominal dollars, or more than $300 billion adjusted for inflation, making Israel the largest cumulative recipient of U.S. foreign aid since World War II.¹² Looking at U.S. foreign aid to Israel by year, the annual figure has climbed from tens of millions in the 1960s to a $3.8 billion baseline today, with a supplemental package pushing the first year after October 2023 to roughly $17.9 billion.

1948 Through the 1960s: Modest Beginnings

For Israel’s first two decades, American assistance ran in the tens of millions of dollars per year. Most of it came through Food for Peace and modest economic loans rather than military grants. As late as 1970, total U.S. assistance was roughly $93.6 million.³ The 1967 Six-Day War began reshaping how Washington viewed the relationship, but the real jump in dollar amounts came in the following decade.

The 1970s: Aid Jumps Into the Billions

The 1973 Yom Kippur War was the inflection point. In fiscal year 1974, total assistance surged to about $2.6 billion, including the first-ever U.S. military grant aid to Israel: a $1.5 billion emergency military grant on top of nearly $1 billion in military loans.³ Annual totals through the decade:

1970: $93.6 million
1971: $634.3 million
1972: $430.9 million
1973: $492.8 million
1974: $2.6 billion (post-Yom Kippur War emergency)
1975: $778 million
1976: $2.3 billion
1977: $1.8 billion
1978: $1.8 billion
1979: $4.9 billion (Camp David / Sinai withdrawal)

The 1979 spike came from the Special International Security Assistance Act of 1979, which authorized $7.5 billion for Israel and Egypt combined at a 3:2 ratio favoring Israel. That legislation included $2.2 billion in military loan guarantees for Israel and $1.5 billion for Egypt.⁴ The Camp David framework locked in large annual commitments that carried into the following decades.

The 1980s and 1990s: A Steady $3 Billion a Year

Through the 1980s, Congress settled into a pattern of roughly $3 billion per year, split about evenly between economic grants through Economic Support Funds and military grants through Foreign Military Financing. In the mid-1980s, with Israel’s economy in a triple-digit inflation crisis, the U.S. added roughly $750 million per year in emergency economic grants on top of the regular package, conditioned on market-oriented reforms.

The $3 billion baseline held through the 1990s, with the composition beginning to shift toward military aid. During the 1990s, the U.S. also provided about $80 million per year through the Migration and Refugee Assistance program to help resettle Jewish refugees in Israel.⁵

1999–2008: Economic Aid Phased Out

The first formal ten-year Memorandum of Understanding between the two countries covered fiscal years 1999 through 2008 and provided at least $26.7 billion in combined economic and military aid, of which $21.3 billion was military. Under this deal, Economic Support Funds dropped by about $120 million each year while Foreign Military Financing rose by about $60 million annually. The result was a slight decline in the annual total during the transition but a significant shift in composition. By fiscal year 2008, Israel stopped receiving bilateral Economic Support Fund grants entirely.⁵

2009–2018: All Military, Plus Missile Defense

The second ten-year MOU covered fiscal years 2009 through 2018 and committed $30 billion in military aid.⁵ Annual Foreign Military Financing ran at $3.1 billion, with an additional roughly $400 million per year for missile defense appropriated through the Department of Defense budget. Iron Dome, David’s Sling, and Arrow funding flowed through DOD rather than through the State Department’s FMF account, so the total annual aid regularly exceeded the headline FMF figure.⁶

2019–2028: The Current $3.8 Billion Baseline

The MOU governing annual aid today was signed in September 2016. It covers fiscal years 2019 through 2028 and pledges $38 billion over the decade: $33 billion in Foreign Military Financing at $3.3 billion per year, plus $5 billion for missile defense at $500 million per year, for a $3.8 billion annual baseline.⁷ President Obama called it the single largest pledge of military assistance in U.S. history.⁸

The agreement also included Israel’s commitment not to seek additional funds from Congress beyond the agreed amounts, except in cases of war or significant emergency.⁷ Events since October 2023 triggered that exception.

Off-Shore Procurement Phase-Out

The current MOU also phases out “off-shore procurement,” a long-standing arrangement unique to Israel that let it spend a portion of FMF funds on equipment from its own domestic defense industry rather than from American contractors. Under prior agreements, up to 26.3% of FMF could go to Israeli manufacturers.⁷ The scheduled ramp-down runs 26.3% through FY2024, 21% in FY2025, 15.8% in FY2026, 10.5% in FY2027, 5.3% in FY2028, and zero from FY2029 onward.⁹ The FY2024 emergency supplemental carved out a limited exception, allowing up to $769.3 million of $3.5 billion in FMF to be used for off-shore procurement.⁵

2024: The Emergency Supplemental

The war that began in October 2023 pushed spending well past the MOU baseline. In April 2024, Congress passed the Israel Security Supplemental Appropriations Act as part of a broader national security package. The Israel-specific portion totaled $26.38 billion:¹⁰

$4 billion to replenish Iron Dome and David’s Sling interceptor stocks
$1.2 billion for the Iron Beam laser defense system, funds available through September 30, 2026
$3.5 billion in additional Foreign Military Financing for weapons procurement
$4.4 billion to replace defense equipment previously transferred to Israel from U.S. stockpiles
$2.4 billion to cover the costs of expanded U.S. military operations in the region
$1 billion for artillery and critical munitions production

Combined with baseline MOU funding, U.S. military aid to Israel in the first year after October 2023 reached approximately $17.9 billion, roughly seven times the annual MOU baseline in a single appropriation. Aid dropped back to about $3.8 billion in the second year as the supplemental funds were distributed and the regular MOU cycle resumed.

After 2028

The current MOU expires at the end of fiscal year 2028, and negotiations over a successor agreement are already under discussion in policy circles. A new ten-year MOU starting in FY2029 would set aid levels through the following decade. Open questions include whether the annual baseline will rise above $3.8 billion, how missile defense funding will be structured given the new Iron Beam program, and whether Congress will continue making large supplemental appropriations outside whatever baseline the next MOU sets. By FY2029, off-shore procurement will be fully phased out, and Israeli FMF will be subject to the same buy-American requirement as every other recipient country.

1
Congressional Research Service. U.S. Foreign Aid to Israel: Overview and Developments since October 7, 2023
2
Council on Foreign Relations. U.S. Aid to Israel in Four Charts
3
EveryCRSReport.com. U.S. Foreign Aid to Israel
4
Office of the Law Revision Counsel. 22 USC Chapter 49 – Support of Peace Treaty Between Egypt and Israel
5
Congressional Research Service. U.S. Foreign Aid to Israel: Overview and Developments since October 7, 2023
6
EveryCRSReport.com. U.S. Foreign Aid to Israel – Section: Defense Budget Appropriations for U.S.-Israeli Missile Defense Programs
7
The White House. Fact Sheet: Memorandum of Understanding Reached with Israel
8
The American Presidency Project. Statement on the Memorandum of Understanding Between the United States and Israel
9
EveryCRSReport.com. U.S. Foreign Aid to Israel
10
House Committee on Appropriations. House Passes Series of Security Supplemental Bills