U.S., Israel Should Begin Thinking About Next MOU, Analysts Say

The current 10-year, $38 billion Memorandum of Understanding between the U.S. and Israel, which provides $3.8 billion in military aid and missile-defense funding to Israel annually, is set to run out in 2028. But some policy analysts say that now is the time for Washington and Jerusalem to begin thinking about what the next MOU should entail.

Jewish Insider asked several senators, including key defense leaders, this week about the prospect of the next MOU, but none offered specific recommendations or indicated that they’d begun thinking in detail about the upcoming negotiations. Multiple lawmakers said they’d been more focused on the near-term issues Israel is facing.

But one issue that is troubling senators: some voices on the anti-Israel right, who have advocated for a decreased U.S. role in the Middle East and a pullback on U.S. aid to Israel, have taken prominent roles within the Defense Department, and could potentially influence the talks.

One Republican senator, speaking on condition of anonymity, told JI that several GOP lawmakers planned to keep a close eye on MOU negotiations to ensure recent isolationist Pentagon hires did not try to interfere with talks. “It’s on our radar, big time,” the senator said. “We’re engaged on this.”

Former U.S. Ambassador to Israel Dan Shapiro, who had a lead role in negotiating the current MOU, wrote an op-ed in late January calling for the U.S. to start considering the next MOU. He said in an interview with JI that, to keep to the same timeline on which the last MOU was signed, the U.S. and Israel need to begin considering funding levels and requests now, a process that will take time.

A report compiled by a Foundation for Defense of Democracies committee led by senior fellow Jacob Nagel, who was a lead Israeli negotiator on the 2016 MOU, which came into effect in 2018, also said that negotiations on the MOU should begin as early as the middle of this year, with the goal of completing them before the midterm elections.

Despite increasing skepticism of U.S. foreign aid broadly from conservative Republicans and of U.S. aid to Israel specifically from progressive Democrats, Shapiro said he expects “pretty broad bipartisan support” for the deal, which does not require preemptive congressional buy-in.

Shapiro said he expects the “most interesting political dynamic [to be] internal to the administration,” between pro-Israel hawks and isolationists.

“I don’t suggest in any way that Israel doesn’t have broad support across the administration, but I do think that those are policy decisions that different voices will point in somewhat different directions internally, and that’s where the most interesting debate will be,” Shapiro said.

Shapiro said it’s likely too early to say what the toplines of the MOU will be, whether they’ll be consistent over the period of the MOU or how the funding will be divided between missile defense and other military aid, though he said that Israel’s conflicts in the region will likely prompt Jerusalem to ask for more funding coming into the talks.

David Makovsky, the Ziegler distinguished fellow and director of the Koret Project on Arab-Israeli Relations at The Washington Institute for Near East Policy, told JI that he expects Israel to raise the issue of offshore procurement — funds from the U.S. that Israel can use to buy weapons from its domestic defense industry — in the new negotiations.

Nagel said in a memo that was one of the most difficult issues in the negotiations for the current MOU.

That funding was gradually reduced to zero over the course of the current MOU, requiring Israel to spend its annual $3.3 billion in military funding entirely in the U.S. by the end, but Makovsky said that ammunition shortages Israel has faced in its current wars make it a “safe bet” that Israel will try to add back some funding in the new MOU to support its own defense industry.

John Hannah, a senior fellow at the Jewish Institute for National Security of America, said JINSA believes the new MOU should focus less on direct military funding and more on bilateral U.S.-Israel cooperation “that incorporates Israel more formally and securely into U.S.-led global competition against China, Russia, Iran,” creating a more formalized partnership along the lines of the U.S.’ AUKUS agreement with the United Kingdom and Australia.

Hannah said that should include more co-development and co-production of new technologies, bringing Israel more deeply into U.S. defense production lines and supply chains and greater intelligence sharing between the U.S. and Israel.

And he said that the next agreement should span 25 years, rather than 10, “to help facilitate such long-term cooperation, and to insulate the relationship against future U.S. political vagaries and uncertainties.”

Nagel’s report said that Israel should prioritize its air force, including attack helicopters and aerial tankers, in its future acquisitions.

Originally published in Jewish Insider.