Why Netanyahu Suddenly Wants a Deal on U.S. Aid

Ronen Zvulun/Pool Photo via AP

Israeli Prime Minister Benjamin Netanyahu attends the weekly Cabinet meeting in Jerusalem Sunday, July 24, 2016. 

Here's one more twist to the Year of Bizarre Politics: Benjamin Netanyahu, prime minister of Israel and Republican-in-all-but-name, has recognized that the best deal on American aid he can get is from Barack Obama.

The timing of this decision, just after the GOP formally nominated a certain oft-bankrupt businessman and racist agitator for president, may be a coincidence. People running out of a house just as smoke starts coming out the windows, I suppose, could also be due to some coincidence. The more logical explanation is that like many of his conservative ideologue friends, Netanyahu has concluded that a Republican victory in November will not bring salvation.

Here's the plot line up to now: The current 10-year U.S.-Israel memorandum of understanding on military aid will expire in 2018. It provides for $3.1 billion per year in American aid for Israel. Congress has allocated additional funds each year for missile defense, which creates an opening for ongoing Israeli lobbying.

Negotiations on a new 10-year memorandum of understanding (MOU) began back in 2013, broke off, and resumed late last year. The administration has offered a more generous package than the last one, even though the negotiations are taking place after the Iran accord was signed—and therefore after Netanyahu threw away the bargaining chip of acquiescing in the agreement.

But Netanyahu has pressed for better terms. Key points of contention: Israel originally sought a steep increase to $5 billion per year, in part to compensate for Iran having more money for conventional weapons after the agreement ending its nuclear program. According to reports here in Israel, the administration offer runs between $3.7 billion and $4 billion annually—including funds for missile defense, and with the proviso that there will be no additional allocations from Congress and no lobbying. The administration wants to phase out the provision that allows Israel to spend over a quarter of the aid in Israel and another eighth on fuel. In line with the terms of American aid to other countries, the money would have to be spent in the United States. Netanyahu opposed the change.

The talks stalled. Back in February, Netanyahu told his cabinet that if Israel's needs weren't met, “perhaps we will ... need to come to an agreement with the next administration.” It was a comment meant to be leaked, meant to be a threat. This was fairly extraordinary. The leader of the client state getting the aid portrayed himself as being in the stronger negotiating position. And he essentially adopted the GOP position that there's no need to deal with this president. Real business could wait till next year, when a Republican might be in the White House.

Let's note that in February, when Netanyahu said this, the conventional wisdom was that a reality TV star couldn't win the Republican nomination.   Netanyahu is all too closely tied in with the Republican establishment, and I'm sure this is what his friends told him. The interloper would fade, and one of the mainstream GOP conservatives would become the nominee.

Oh well, so much for that.

 Suddenly, hours before the Republican convention began last week, Netanyahu said in the Knesset that he hoped to reach an agreement with the United States “within a few weeks.” A week later, after the last Republican revolt was suppressed and the reality TV star accepted his party's nomination with a dark rant, a statement from Netanyahu dropped into the inboxes of Israeli journalists. It said that his negotiator, acting National Security Council head Jacob Nagel, would fly to Washington this coming Sunday, “for meetings with his White House counterparts, for the purpose of signing a new MOU between the two countries as soon as possible.” Meanwhile, reports attributed in ways that usually mean, “someone senior in the Prime Minister's Office,” said that Netanyahu had decided to fold on “most” of the remaining issues and accept the administration's conditions. There are still details to work out, including how many years it will take to phase out Israeli use of the aid outside the United States. But Netanyahu definitely wants a deal in a hurry.

Now it's true that some of Netanyahu's senior coalition partners thought he was daft to delay the agreement, and said so publicly. But the timing suggests that Netanyahu's shift has a lot more to do with American politics than Israeli politics.

The Republican nominee is running on the isolationist, anti-Semitism-stained slogan, “America First.” He has said that Japan and South Korea should build their own nukes rather than depending on America to spend money on helping them. He didn't mention the Middle East, but the same pro-proliferation logic could apply to Egypt or other countries in the region. Vladimir Putin's favorite American politician has questioned whether the United States should take action to protect Estonia, a NATO member. This has to make one wonder what the nominee thinks of keeping commitments to other allies.

At a press conference in March, He Who I Will Not Name said that Israel was among the “countries that can pay and they can pay big league” for American defense. The same day, of course, he reversed himself. He does that. But it's not hard to figure out that he's not a guy you should count on for an aid package.

Netanyahu's sudden switch suggests that he can, indeed, work this out. It seems he has also figured out that Hillary Clinton is likely to be his negotiating partner if he waits till next year, and that she has no reason to reward him for blowing off Obama.

Actually, Netanyahu and the Republican nominee have been keeping their distance. At this time four years ago, Mitt Romney was about to touch down in Israel, to be so warmly received by Netanyahu that it was virtually an endorsement. An Israeli official (I hate vague attributions, but that's what the source asked for) told me this week that he was “not aware of any upcoming trips of [American] candidates to Israel.”

Does this mean that Netanyahu is on the outs with his billionaire American backer, Sheldon Adelson? In May, Adelson was reported to have promised up to $100 million to the campaign of his less-successful fellow casino mogul. More recently, though, it's been reported that Adelson has “put his plans on hold.” For now, it's unclear where he stands.

I won't make any predictions on how fast Netanyahu and Obama will reach a deal on aid, or whether the prime minister's current attack of good sense will last. Right now, though, it seems that even Benjamin Netanyahu, who has spent the last seven and a half years publicly tangling with the president, has realized that he, too, will miss Obama. Truly, this is a year of unfathomable events.

Prospect Senior Editor Eliza Newlin Carney contributed information to this story.

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