President Trump’s announcement on the cancellation of military aid to Israel is most dramatic. Not only because the cancellation was declared unexpectedly without any gradual phase-out but also because it defies all expectations, coming just one year before the expiration of a ten-year aid agreement. Furthermore, as recently as July, the US House of Representatives voted on an amendment proposed by Republican Congressman Thomas Massie to eliminate military aid to Israel for the year 2028. An overwhelming majority of 314 House members voted against ending the aid, including the entire Republican caucus, save for one, while 104 Democrats supported the measure.
Trump’s announcement, which actually falls outside his authority because budgetary authority lies exclusively with Congress, represents a stinging slap in the face. It is likely linked to the midterm elections and to his assessment that Israel is no longer popular. He may have viewed the cancellation of aid as a last-ditch effort to counter the looming "blue wave" that led to a massive Democratic victory.
Large-scale aid to Israel began following the 1973 Yom Kippur War and has consistently transcended both political parties and presidential administrations. In September 2016, the Obama administration and the Israeli government signed a defense assistance agreement for 2019-2028, totaling $38 billion.
This agreement continued a long-standing tradition. The Clinton administration committed to $26.7 billion in aid for the years 1999-2008, while the George W. Bush administration increased the assistance to $30 billion for the years 2009-2018. In addition, the Biden administration provided further special assistance amounting to $8.7 billion in the wake of the October 7 war. According to data from the US Congressional Research Service, from its founding through 2025, Israel has received a cumulative total of about $300 billion in aid from the US (adjusted for inflation, in today’s dollars). 90% of this amount has been provided since 1973.
Under the ten-year agreement, regular defense assistance to Israel stands at $3.8 billion annually. Of this, $3.3 billion is allocated for the ongoing procurement of weapons, ammunition, and aircraft, while an additional $500 million is part of a special $5 billion, ten-year budget, established by the Obama administration, for missile defense systems, namely Iron Dome, David’s Sling, and Arrow. In 2024, at the request of President Biden, Congress approved an additional $1.2 billion, over and above the existing aid, for the Iron Beam laser air defense system.
It is not only Israel that will be hit
Overall, the weight of US aid in the Israeli defense budget has amounted, on a multi-year average, to 25%-35% of total defense spending. In the decade preceding the October 2023 war, routine US aid financed about 15%-20% of defense spending, while in 2024-2025, it accounted for an average of 23%-24% of these costs. This aid, totaling roughly NIS 12 billion annually is equivalent to the entire budget of the Ministry of National Security (which encompasses the Israel Police, the Israel Prison Service, and the Fire and Rescue Authority). Funding this independently would require an across-the-board increase of 2% to 2.5% in all personal income tax brackets, or a 1% hike in Value Added Tax (VAT).
However, it is not only Israel that would suffer from a reduction in aid. US defense contractors, like Boeing, Raytheon, and Lockheed Martin, could also be negatively impacted, as the vast majority of these aid funds flow back to them in procurement orders. These companies, along with their labor unions, maintain extensive lobbying operations in Washington. The President’s claim that the cut was coordinated with Israel and carried out with its consent appears intended to preempt any opposition in Congress, including from numerous lawmakers, to the halting of aid in the budget approval process.
Regardless of the ultimate fate of the aid or the extent of any cuts, this sudden and dramatic move by the President will not only place an additional burden on the Israeli economy, which is already grappling with a defense budget that has been expanding since October 2023, but also offers a glimpse into the atmosphere that the new Israeli government will have to navigate in Washington following the US elections.
Published by Globes, Israel business news - en.globes.co.il - on November 4, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.