US aid to Israel will total $2.528 billion in the 2006 fiscal year, under the budget proposal the Bush administration submitted to the Senate and House of Representatives yesterday. The US 2006 fiscal year begins on October 1, 2005.
Military aid will total $2.28 billion and civilian aid $240 million. An additional $40 million will be allocated for immigrant absorption, to reflect the ongoing decline in the number of Jewish immigrants to Israel, in the words of the budget bill.
US military and civilian aid to Israel is calculated using a formula devised by the Clinton administration in the mid-1990s to gradually eliminate civilian aid, at the initiative of then-Israeli Minister of Finance Yaakov Neeman and then-Minister for Economic Affairs at the Israel Embassy in Washington Ohad Marani.
Under the formula, US civilian aid to Israel will be reduced by $120 million a year until it is eliminated altogether in 2008, while military aid will be increased by $60 million a year to a ceiling of $2.4 billion a year, beginning in 2008. US civilian aid to Israel is $360 million in 2005, and military aid is $2.22 billion.
Although the amount of US aid to Israel was expected, pro-Israeli sources in Washington were surprised by White House policy toward the Palestinians, who will receive $390 million in aid in the 2005 and 2006 fiscal years.
Published by Globes [online], Israel business news - www.globes.co.il - on February 8, 2005