How Much Money Does America Give to Israel?: The $3.8 Billion Breakdown

The United States gives Israel a guaranteed baseline of $3.8 billion per year in military assistance, but that number understates what has actually flowed in recent years. Emergency spending tied to the Gaza war pushed total direct aid past $10 billion in both fiscal 2024 and fiscal 2025, and the current administration authorized nearly $12 billion in additional arms sales in early 2025 alone. Across the full relationship since 1946, cumulative American aid to Israel totals roughly $174 billion in nominal dollars, or about $298 billion adjusted for inflation, making Israel the single largest recipient of U.S. foreign assistance in history.¹

Where the $3.8 Billion Figure Comes From

The annual baseline is set by a ten-year Memorandum of Understanding signed in September 2016 and covering fiscal years 2019 through 2028. The MOU pledges $38 billion in total military aid over the decade: $33 billion in Foreign Military Financing grants and $5 billion for cooperative missile defense.² Divided evenly, that is $3.8 billion each year.

The MOU itself is a non-binding executive pledge. Money only moves when Congress passes annual appropriations, and Congress has funded the agreement at its full amount every year. In 2020 it went further, codifying the commitment in Section 1273 of the FY2021 National Defense Authorization Act, which requires “not less than” $3.3 billion annually in military grants to Israel through 2028.³ That statutory floor makes the annual number effectively guaranteed for the life of the agreement.

The $3.3 Billion in Foreign Military Financing

The largest piece of the annual package is $3.3 billion in Foreign Military Financing, known as FMF. These are outright grants, not loans, and they are authorized for purchasing American-made defense equipment and services. Most of the money cycles back to U.S. defense manufacturers as contract revenue.⁴

Israel receives its FMF differently from any other country. Since 1991, Congress has required the entire annual amount to be disbursed as a lump sum within 30 days of the appropriations bill being signed, rather than parceled out through the year. The money sits in an interest-bearing account at the Federal Reserve Bank, and Israel earns interest on the balance while drawing it down for procurement.¹ No other recipient has this arrangement.

A second special feature is cash flow financing, which lets Israel sign multi-year contracts for expensive platforms like the F-35 fighter and the KC-46 refueling tanker and pay across future annual grants. Without it, a single major aircraft purchase could consume most of one year’s allocation.

Historically, Israel could also spend a portion of its FMF, roughly 26.3%, on its own domestic defense industry through a privilege called Off-Shore Procurement. Under the current MOU, that carve-out is being phased out and reaches zero by FY2028. For FY2025 the allowance was $450.3 million, already well below historical levels.¹

The $500 Million for Missile Defense

The remaining $500 million of the annual $3.8 billion funds cooperative missile defense through the Department of Defense budget rather than the State Department. It supports three layered systems: Iron Dome for short-range rockets, David’s Sling for medium-range threats, and Arrow for long-range ballistic missiles.² Many interceptor components are built by American contractors, and the United States uses combat data from these systems to inform its own missile defense planning.

A fourth system, Iron Beam, is a laser-based defense designed to shoot down short-range threats at a fraction of the per-shot cost of a traditional interceptor. The 2024 supplemental appropriated $1.2 billion specifically for Iron Beam procurement, available through September 30, 2026.⁵

Supplemental Aid Since October 2023

The $3.8 billion is a floor, and during conflicts Congress has repeatedly added much more on top. The Gaza war triggered the largest burst of supplemental aid in the program’s history. In April 2024, President Biden signed P.L. 118-50, which included $26.4 billion in Israel-related spending. The main allocations were:

$3.5 billion in additional Foreign Military Financing for weapons and ammunition, with a portion permitted for Israeli-made equipment
$4 billion to replenish Iron Dome and David’s Sling interceptor stockpiles
$1.2 billion to procure the Iron Beam system
$4.4 billion for U.S. military operations in the region

Those amounts came on top of the standard $3.3 billion in FMF and $500 million in missile defense that Israel received under the regular FY2024 appropriation.¹ Across the full period of the conflict, total supplemental military and defense aid reached about $12.5 billion: $6.8 billion in FMF, $4.5 billion in missile defense, $1.2 billion for Iron Beam, plus smaller allocations.⁵

Arms Sales and 2025 Policy Changes

Arms sales are a separate channel from foreign aid. Israel pays for the equipment, often drawing on its FMF allocation, but the volume of the pipeline is a major part of the overall financial and military relationship. Within weeks of taking office in 2025, the Trump administration notified Congress of four arms sales to Israel totaling $8.4 billion, including a $6.75 billion munitions package that was the largest single weapons sale to Israel since 2015. The administration then invoked emergency authority under the Arms Export Control Act to expedite roughly $4 billion in additional sales, bypassing the normal congressional review period.⁶

Several policy changes accompanied the sales. The administration released 2,000-pound bombs that had been withheld under a Biden-era hold, exempted Israel and Egypt from a broader executive order freezing foreign aid, and rescinded National Security Memorandum 20. NSM-20 had required recipients of American weapons to provide written assurances that they would comply with international humanitarian law and would not obstruct humanitarian aid deliveries.⁶

As of April 2025, the United States had 751 active Foreign Military Sales cases with Israel valued at a combined $39.2 billion. That figure represents the total contracted pipeline of equipment, not annual spending.⁷

Loan Guarantees and Non-Military Aid

The mix of American support has shifted over time. From 1971 through 2007, Israel received substantial economic aid through the Economic Support Fund, direct cash grants meant to stabilize the broader economy. That program ended in FY2008, and virtually all bilateral aid since has been military.⁶

The one significant non-military tool still in place is a federal loan guarantee program, originally authorized in 2003 and most recently reauthorized through 2030. It lets Israel borrow on international capital markets with the full faith and credit of the United States backing the debt, which lowers interest rates.⁸ No taxpayer money changes hands unless Israel defaults, which has never happened. The original authorization reduces the amount of available guarantees by any sum Israel spends on activities the President determines are inconsistent with the program’s objectives.¹

Legal Conditions on the Money

Several federal statutes place conditions on U.S. military aid to any recipient, though they have rarely resulted in a cutoff to Israel.

The Leahy Law, actually two parallel statutes, prohibits assistance to any foreign military unit when the Secretary of State has credible information that the unit committed torture, extrajudicial killing, enforced disappearance, or rape. One provision covers State Department-funded assistance; a companion in Title 10 covers Defense Department programs.⁹ Units are vetted before they can receive American training or equipment, with checks at the embassy level and reviews of open-source and classified records in Washington.¹⁰ Aid can resume if the foreign government takes effective steps to hold responsible individuals accountable.

Section 620I of the Foreign Assistance Act separately bars military assistance to any government that restricts the transport or delivery of American humanitarian aid. The President can waive the restriction by determining that continued assistance serves the national security interest and notifying Congress in advance.¹¹ It has never been systematically enforced against any country.

Once equipment is delivered, the Arms Export Control Act requires end-use monitoring to verify that transferred defense articles are being used for their intended purpose, not diverted, and stored securely.¹² The Defense Security Cooperation Agency runs the program, called Golden Sentry, through officers at U.S. embassies.¹³ A Government Accountability Office investigation once found that a Defense Department contractor and Israeli officials had circumvented program restrictions and diverted $12.5 million through an overpricing scheme, and that even U.S.-managed sales “lack proper controls and oversight.”¹⁴ The finding is decades old, but the challenge of tracking billions of dollars in equipment across borders is not.

What the Numbers Mean in Context

Between the MOU baseline, the recent supplementals, and smaller programs, the United States gave Israel well over $10 billion in direct aid during both FY2024 and FY2025. The FMF grants alone account for roughly 14% of Israel’s overall defense budget. The $3.3 billion in annual military aid works out to about 1% of total U.S. discretionary spending: modest inside the federal budget, but larger than what any other single country receives.

What happens after fiscal 2028 depends on whether the current MOU is renewed, expanded, or replaced. Bipartisan legislation introduced in 2025 would establish new cooperative programs for counter-drone systems and deepen defense-industrial integration between the two countries. If enacted, those measures would push annual spending above current MOU levels even before a successor agreement is negotiated.⁶

1
Congressional Research Service. U.S. Foreign Aid to Israel – Overview and Developments
2
United States Department of State. Ten-Year Memorandum of Understanding Between the United States and Israel
3
Congressional Research Service. U.S. Foreign Aid to Israel
4
Office of the Law Revision Counsel. 22 USC 2763 – Credit Sales
5
Congress.gov. H.R. 8034 – Israel Security Supplemental Appropriations Act, 2024
6
Congressional Research Service. U.S. Foreign Aid to Israel – Overview and Developments Since October 7, 2023
7
Congressional Research Service. U.S. Foreign Aid to Israel
8
U.S. Government Publishing Office. Public Law 108-11 – Emergency Wartime Supplemental Appropriations Act, 2003
9
Office of the Law Revision Counsel. 22 USC 2378d – Limitation on Assistance to Security Forces
10
United States Department of State. About the Leahy Law
11
Office of the Law Revision Counsel. 22 USC 2378-1 – Prohibition on Assistance to Countries That Restrict United States Humanitarian Assistance
12
Office of the Law Revision Counsel. 22 USC 2785 – End-Use Monitoring of Defense Articles and Defense Services
13
Defense Security Cooperation Agency. Golden Sentry End-Use Monitoring Program
14
U.S. Government Accountability Office. Foreign Military Aid to Israel – Diversion of U.S. Funds and Circumvention of U.S. Program Restrictions