US aid gap hits $10 billion
Israel faces a funding shortfall for existing American arms contracts as President Trump signals a shift away from direct grants.
By Pedro Tanaka ·
A new funding requirement has emerged for Israel’s military procurement, with the country needing approximately $10 billion beyond current commitments to settle outstanding American weapons orders. The Wall Street Journal reported this finding on Thursday, citing a State Department document provided to Congress. This financial gap extends past the current assistance agreement, which is set to expire in 2028.
The State Department letter, sent to Democratic Representative Joaquin Castro of Texas, outlines the shortfall based on purchase data from April 1. While Washington has pledged nearly $7 billion in military aid over the next two years, that amount does not cover all existing obligations. The department indicated that the remaining costs could be met through further American support, Israel’s own budget, or a combination of both. The agency did not reply to subsequent requests for comment.
President Donald Trump announced his intention to terminate military aid to Israel on Tuesday. Israeli officials, including those in the defense establishment, reportedly expressed surprise at the timing, despite months of bilateral talks regarding a gradual reduction in assistance. Prime Minister Benjamin Netanyahu has previously suggested that direct US military aid could end within a decade.
The existing framework, signed during the Obama administration, allocates roughly $3.3 billion annually for Israeli purchases of US military gear. This arrangement allows Israel to order equipment against funds pledged for future years. In 2024, Congress separately approved about $26 billion in additional aid following the October 7, 2023, Hamas attack and the subsequent Gaza war. Cumulative US military assistance to Israel from 1948 through May 2025 totals approximately $174 billion, according to Congressional Research Service figures.
US lawmakers are currently considering legislation to prioritize defense investment and joint technology production over direct grants. This proposal is expected to be included in the annual defense policy bill, which is due for finalization by year’s end. Supporters argue that such integration would strengthen Pentagon cooperation on projects like Iron Dome. Critics caution that deeper entanglement in US supply chains could make future congressional efforts to scale back cooperation more difficult.
Israel’s reliance on American weaponry remains substantial, including thousands of bombs used in recent conflicts and planned purchases of 25 F-35 fighter jets. Defense spending already accounts for about 7% of the Israeli gross domestic product, a higher share than in any other NATO nation. Vice President JD Vance noted on X that the Iran war and Israel relations were key factors behind Republican losses in Tuesday’s midterms. Former State Department official Josh Paul told the Journal that existing budget commitments make an immediate cutoff unlikely.
The debate over aid levels coincides with shifting political support in the US. Trump suggested that ending direct assistance might remove a campaign issue for Democratic critics, specifically naming newly elected Michigan Senator Abdul El-Sayed. However, any reduction must still adhere to the legal requirement to maintain Israel’s qualitative military advantage. Current and former officials agree that a rapid halt is improbable due to established congressional budgets.
