$2.5b aid for Israel in Bush 2007 budget

$150 million in aid for the Palestinian Authority will be subject to review, and the US will continue funding ongoing projects.

In its 2007 budget proposal submitted to Congress, the Bush administration is asking for $2.46 billion in aid for Israel: $2.34 billion in military aid, and $120 million in civilian aid.

The amount of aid is calculated under a formula devised by former Minister of Finance Yaakov Neeman and then-Israel’s Economic Minister to Washington Ohad Marani. The Clinton administration and Congress approved the formula. Under the formula, US military aid is increased by $60 million a year, up to a ceiling of $2.4 billion, and civilian aid is cut by $120 million a year, until it is finally eliminated. 2007 will be the last year in which Israel will receive US civilian aid.

The US fiscal year begins on October 1, and Israel receives the full amount of annual aid a few weeks later, assuming there are no legislative delays, which occur almost every year. Israel is the only recipient of US aid that receives it in a single tranche.

The 2007 US budget request includes $150 million in aid for the Palestinians, the same amount as in the 2006 budget. US spokespersons quickly emphasized that aid to the Palestinian Authority (PA) would be subject to review, depending on developments in the PA.

State Department spokesman Sean McCormack said US financing of ongoing PA projects would continue, but each project would be examined on its own merits. The budget proposal states that aid for the Palestinians is intended to promote democracy, the rule of law, and economic recovery.

The 2007 US budget proposal also includes $1.3 billion in military aid and $455 million in civilian aid for Egypt. US civilian aid to Egypt is cut by $40 million a year. Jordan will receive $245 million in civilian aid and $206 million in military aid, the same as in previous years.

Published by Globes [online], Israel business news - www.globes.co.il - on February 8, 2006

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