How Much Do We Give Israel Every Year? Military and Missile Defense Aid

The United States gives Israel a baseline of $3.8 billion in aid every year under a ten-year agreement: $3.3 billion in military financing and $500 million for missile defense.¹ That figure is a floor, not a ceiling. In fiscal year 2024, combined aid reached roughly $12.5 billion after Congress passed emergency supplemental funding tied to the war in Gaza.²

The baseline comes from a Memorandum of Understanding signed in 2016, covering fiscal years 2019 through 2028 and committing $38 billion over the decade. It is the largest single pledge of military assistance in American history. The MOU is not a treaty, so it does not bind Congress legally. It functions as a political commitment that guides annual appropriations. For FY2026, the House Appropriations Committee approved no less than $3.3 billion in Foreign Military Financing for Israel, consistent with those terms.³

The $3.3 Billion in Military Financing

The largest slice of annual aid is $3.3 billion in Foreign Military Financing, or FMF. It arrives as a grant, so Israel does not repay it. The money goes toward buying U.S.-made defense equipment and services: fighter jets, helicopters, ammunition, spare parts.⁴ The statutory authority sits in the Arms Export Control Act, which lets the President finance defense procurement by friendly foreign countries.⁵

The State Department sets policy for FMF; the Defense Department and the Defense Security Cooperation Agency handle logistics. Israel’s share alone accounts for roughly 40 percent of the entire global FMF budget, with Egypt and Jordan next in line.²

The $500 Million for Missile Defense

The remaining $500 million funds cooperative missile defense programs. It flows through Department of Defense appropriations rather than the State Department budget, because the work involves joint research, development, and production.¹

Congress typically specifies how the $500 million breaks down among several layered systems:

Iron Dome intercepts short-range rockets and mortar fire. It is the system most often activated in combat, and it burns through interceptors the fastest. Each interceptor costs roughly $50,000.
David’s Sling covers medium-range threats that fly above Iron Dome’s effective ceiling.
Arrow 2 and Arrow 3 target long-range ballistic missiles, with Arrow 3 designed to intercept threats in the upper atmosphere.

A disproportionate share of the annual $500 million goes to producing Iron Dome interceptors, which get used in large quantities during any sustained conflict.

When Annual Aid Runs Above the Baseline

Congress can appropriate more than the $3.8 billion floor through emergency supplemental legislation. It did so in FY2024. The supplemental included $3.5 billion in additional FMF, $4 billion to replenish Iron Dome and David’s Sling interceptors, and $1.2 billion for a new laser-based system called Iron Beam.⁶ Billions more replenished U.S. defense stocks that had been transferred to Israel and funded American military operations in the region.

Total FY2024 aid reached about $12.5 billion, more than triple the MOU baseline. Military financing that year doubled to $6.8 billion, and missile defense funding rose to $5.7 billion.² Supplementals are unpredictable. There is no guarantee of comparable amounts in future years.

Separately, in early 2025 the Trump Administration notified Congress of $8.4 billion in foreign military sales to Israel, including a single $6.75 billion munitions package that was the largest such sale since 2015. Foreign military sales differ from FMF grants because Israel pays for the purchases, though it often uses FMF dollars to do so.²

Where the Money Can Be Spent

For decades, Israel had a privilege no other FMF recipient enjoyed. It could convert roughly a quarter of its grant into Israeli currency and spend it on domestically produced defense products. This arrangement, called Offshore Procurement, effectively let U.S. tax dollars build Israel’s own defense industry. At its peak, Israel was converting about $815 million per year for local spending.⁷

The 2016 MOU began phasing this out. Cuts started small, then accelerated. By FY2025, the allowance dropped to $450.3 million.² It keeps falling through FY2026 and FY2027 and hits zero in FY2028. After that, every FMF dollar must be spent on American-made defense products.

Legal Restrictions on the Aid

Several layers of oversight govern how the money gets used. Annual appropriations bills set the amounts. The Defense Security Cooperation Agency tracks procurement compliance. Federal auditors review spending reports.

The most consequential legal restriction is the Leahy Law. It prohibits U.S. military assistance to any foreign security force unit where credible information exists that the unit has committed gross violations of human rights. The law applies to both State Department and Defense Department funding and requires vetting of recipient units before assistance is provided.⁸ If a violation is identified, funding to that specific unit must be cut off unless the foreign government takes effective steps to bring those responsible to justice.

The President can also suspend or terminate financing if a recipient violates the terms of an agreement. That power has rarely been exercised with respect to Israel. The Biden Administration briefly paused a shipment of 2,000-pound bombs in 2024, drawing intense political scrutiny. The Trump Administration released that shipment in January 2025 and exempted Israel from a broader executive order freezing other U.S. foreign aid.²

Loan Guarantees and Other Channels

Beyond direct grants, the United States has extended loan guarantees to Israel. A program under 22 U.S.C. § 2186 originally allowed the President to guarantee up to $10 billion in loans to help Israel resettle immigrants from the former Soviet Union and Ethiopia. Guarantees reduce Israel’s borrowing costs because lenders face less risk when the U.S. government backs the debt. Israel pays an annual origination fee covering the estimated subsidy cost plus administrative expenses.⁹

The original authorization period ended in the 1990s, but Congress has repeatedly reauthorized the program. FY2025 legislation extended the authority through 2030.² The statute includes a reduction mechanism: if Israel engages in activities the President deems inconsistent with the program’s objectives, the authorized guarantee amount can be cut by a corresponding amount the following year.

Economic aid, once a major component of the relationship, has been phased out. From 1971 through 2007, Israel received significant annual economic assistance. That ended as Israel transitioned into a high-income economy. Today, non-military assistance is limited to small humanitarian allocations, such as migration and refugee assistance managed through the State Department under the Migration and Refugee Assistance Act of 1962.¹⁰

What Happens After 2028

The current MOU expires at the end of FY2028. Discussions about a successor agreement have already begun. A new ten-year MOU starting in FY2029 would run through 2038. The open questions include the overall dollar figure, whether missile defense funding rises to reflect newer threats like drones and cruise missiles, and how Iron Beam and other emerging technologies factor into the allocation.

Nothing in current law guarantees aid continues at any specific level after the MOU expires. Each year’s funding still requires an act of Congress. The trend line across successive MOUs has moved upward, but the annual number after 2028 is not fixed.

1
United States Department of State. Ten-Year Memorandum of Understanding Between the United States and Israel
2
Congress.gov. U.S. Foreign Aid to Israel: Overview and Developments
3
House Committee on Appropriations. Committee Approves FY26 National Security, Department of State Appropriations Act
4
ForeignAssistance.gov. U.S. Foreign Assistance By Country – Israel
5
Office of the Law Revision Counsel. 22 U.S.C. 2763 – Credit Sales
6
Congress.gov. H.R.8034 – Israel Security Supplemental Appropriations Act, 2024
7
U.S. Department of State. U.S. Security Cooperation with Israel
8
United States Department of State. About the Leahy Law
9
Office of the Law Revision Counsel. 22 U.S.C. 2186 – Loan Guarantees to Israel Program
10
Office of the Law Revision Counsel. 22 U.S.C. Chapter 36 – Migration and Refugee Assistance