Posting #27: The Defense Industry, the US economy, and the Israeli war in Gaza

The Story: In a December 29^th, 1940 radio broadcast, President Franklin D. Roosevelt called the United States the “Arsenal of Democracy.”  In the broadcast, FDR asserted that the United States would activate its vast industrial capacity “to build the weapons of war needed by the last struggling democracies to save themselves, and the idea of democracy itself, from the threat of conquest by fascism and militarism in Europe and Asia.”  This story from the “greatest generation” is one Americans still tell themselves: that American armaments are used primarily if not exclusively in the pursuit of goodness, nobility, and democratic freedoms.

My take on the story:  I think this story’s assurances of goodness is why more than half of the US population disapproves of providing American-made weaponry to Israel as it decimates Gaza while trying to obliterate Hamas. 

Here’s the situation.

(I’m trying to make a very complicated geopolitical and socio-economic system more easily understandable, so forgive me if my explanation seems simplistic.)  

On October 7^th, 2023, Gaza-based Hamas attacked Israel, killed nearly 1200 people, and took hostage 251 Israelis and foreigners.  Soon after that attack, Israeli Prime Minister Benjamin Netanyahu declared “Israel is at war” and US President Joe Biden pledged the backing of the United States: “Israel has a right to defend itself and its people.” A year later, the US continues to support Israel militarily in its ongoing war against Hamas and Israel claims to have killed 17,000 Hamas members. (Israel also has recently opened a second front on its border with Lebanon, where its enemy, Hezbollah, is based.  Israel also bombed Yemen-based Houthis on September 29, 2024. US-made weapons are likely being used by Israel in those locales, too.)

People across the world accuse Israel of practicing genocide against the Palestinians who live in Gaza, with more than 43,000 of approximately 2 million people having been killed by the Israelis, 85% of the population displaced,  and 59% of Gaza's buildings either damaged or destroyed.  Meanwhile, diseases like cholera, measles, and polio are rampant and famine threatens.  

And this has all been done with the military support of the United States.  Though Israel has its own defense industry, other countries sell weaponry to Israel to fuel its military.  The United States, however, has long been the primary supplier of conventional arms even before Israel’s recent war.

In fact, in 2008, what had been the practice for decades— Qualitative Military Edge (QME)—was put into US law on a bipartisan basis by the US legislative branch of government, Congress, and signed by President Obama.  This “edge” requires the U.S. government to maintain Israel’s ability:

to defeat any credible conventional military threat from any individual state or possible coalition of states or from non-state actors, while sustaining minimal damage and casualties.

Under the 2008 law, the United States must ensure that any weapons it provides to other countries in the Middle East do not compromise Israel’s QME. In several cases, this has required the United States to provide Israel with offsetting weaponry as part of larger regional arms sales. QME has also ensured that Israel is the first in the region to receive access to the most sophisticated U.S. military weapons and platforms, such as the F-35 stealth fighter, of which Israel has fifty.

Here's how the United States supplies these weapons to Israel.

The State Department, as part of the Executive branch of government, uses the current Conventional Arms Transfer policy to authorize to whom the United States sells weapons through its Foreign Military Sales program.  In this program, the United States has two ways to distribute weapons to other nations: Foreign Military Financing and Direct Commercial Sales. 

First, the United States provides aid—Foreign Military Financing—to countries the State Department has selected, aid that must be used by those nations to purchase US-made weapons and services through the Department of Defense acquisition system.  These countries include Israel, Poland, Germany, Kuwait, Qatar, Egypt, Bulgaria, the Czech Republic, South Korea, and others.  Memoranda of Understanding (MOU) stipulate how much that aid will amount to. 

Second, with the permission of the State Department, nations can use their own funds to privately purchase weaponry from US defense contractors through the Direct Commercial Sales program.  Saudi Arabia is the largest Direct Commercial Sales customer.  In 2023, Foreign Military Financing amounted to $80.9B, whereas Direct Commercial Sales were nearly twice that amount at $157.5B.

Furthermore, Congress must be notified about the State Department/Executive branch’s authorizations for sales over a certain amount, as Congress has oversight responsibility. Congress has little power, however, to block those transfers. It has tried to block transfers of weaponry to Saudi Arabia (1981, 1986, 2017, 2021), Pakistan (2016), United Arab Emirates (2020), and Israel (2021), among others.  But although the 1976 Arms Export Control Act authorizes Congress to adopt a “joint resolution of disapproval for arms sales” to protest weaponry being sent to nations that violate US and International law, this maneuver has never been successful at preventing a President from controlling the import and export of weaponry. 

Because the President always can invoke the “security interests of the United States” or an “emergency” to dismiss Congress’s disapproval, Congress has minimal power to restrict arms transfers.  Recently, in 2019, for instance, President Trump overrode Congress’s objection to arms being sent to Jordan, Saudi Arabia, and the United Arab Emirates. (According to War on the Rocks, “During the Trump administration, Capitol Hill opposed the arms sales [to Saudi Arabia] because of the increasingly destructive Saudi war in Yemen, the murder of Jamal Khashoggi, Riyadh’s alleged role in the 9/11 terrorist attacks, and Saudi Arabia’s long record of human rights abuses.”) 

In 2022 and 2024, President Biden overrode Congress’s disapproval of rocket systems and non-standard munitions being sent to Ukraine, and in 2023, tank cartridges being sent to Israel.  On September 25, 2024, Senators Sanders, Merkley, and Welch introduced a resolution of disapproval to block $20B of offensive weapons being transferred to Israel.  Because there is no precedent for such a disapproval being successful since the 1976 law enactment (e.g. almost fifty years), this one is unlikely to do more than formally express Congress’s condemnation of arming Israel in its war on Gaza and now, Lebanon and Yemen.

Since Israel’s 1948 founding, the United States has provided over $310B to assist the nation.  Most recently, that aid has been almost entirely military so that globally, Israel receives the largest amount of money through the Foreign Military Financing program.  In 2016, the U.S. and Israeli governments signed a 10-year MOU, covering the period from Oct. 1, 2018 to Sept. 30, 2028. The MOU provides a total of $38B in military aid over the 10 years: $33B in grants to buy military equipment and $5 billion for missile defense systems.  That means the US provides Israel $3.3B every year to bolster its military forces and monies for its Iron Dome.   Unlike any other country receiving Foreign Military Financing, however, Israel is permitted to use that aid to purchase weaponry from its own defense manufacturers.

So, here’s the situation as I understand it when it comes to Israel:

·      US law says that Israel must be guaranteed by the United States of a military “edge”

·      That means that if Saudi Arabia or Jordan or the United Arab Emirates purchase weapons from a US-based defense contractor, the US must somehow counter-balance that weaponry to ensure Israel’s “edge”

·      Since the beginning of Israel’s war in Gaza, that “edge” has meant providing additional billions of dollars and weaponry to Israel beyond what the MOU provides.  The Costs of War project estimates the US spending to be about $18B in the last year.

·      Israel is the world’s greatest beneficiary of American Foreign Military Financing

·      Unlike all other beneficiaries, Israel is permitted to use some of the US-provided financing to purchase its own weaponry

·      Though Congress enacts laws, it has almost no power to prohibit the Executive branch from transferring weapons as it chooses

But why else might the United States continue to support Israel?

First, National Security.  The national security of the United States has benefitted from having Israel as what is more or less a well-armed proxy in the Middle East.  Having a militarily strong Israel means that the United States can contain Iran, especially, without having to put boots on the ground.  Historically, too, other allies in the region—Egypt, Saudi Arabia, Turkey—have been less consistent and more problematic, especially in regard to their practices of democracy and following international human rights laws. 

Still, Israel’s status as a reliable proxy is now being called into question with accusations that it is committing genocide, thereby violating International humanitarian obligations, and also the US Leahy Law, which prevents “the U.S. Government from using funds for assistance to units of foreign security forces where there is credible information implicating that unit in the commission of gross violations of human rights.”  Loopholes in the Leahy Law apparently make exceptions for countries like Israel, however.

Most importantly, even when Israel is threatening other countries in the region with US weapons, it still relies on the US to defend it when those threats boomerang back on Israel. For instance, Israel’s recent killing of the Hezbollah leader in Lebanon provoked Iran, and “Israel asked the U.S. to take steps to deter Iran from attacking Israel in response to the Israeli airstrike in Beirut that killed Hezbollah leader Hassan Nasrallah and a top Iranian general.”  Now, the United States is sending several thousand more troops to the 40K it already has there…to protect Israel. 

Meanwhile, President Biden is feeling pressure on multiple fronts.  Republicans on Capitol Hill are pressing Biden to punish Iran’s recent missile attacks on Israel and escalate military aid to Israel, whereas nearly 100 health American volunteers who worked in Gaza demanded a U.S. arms sales embargo to Israel in an October 2, 2024 letter to President Joe Biden and Vice President Kamala Harris. 

So much for relying on a well-armed Israel taking care of things.

Second, the US Economy.   The sales of US-made armaments and services (i.e. private military contractors) have become a “defining feature” of the US economy and so the State Department is under pressure to permit US weapons to be sold to Israel.  That is, the American defense industry makes up so much of the economy across the nation that it now has the “unwarranted influence” President Eisenhower warned about in his January 17, 1961 farewell address.  

US Defense contracts—some armaments and services going to the Department of Defense, some going to other nations—at last count are worth over $500B annually and support at minimum, 200K US-based companies.  According to Forbes Magazine, this is a good thing: the industry is “strong” and “stock prices surge” as “Geopolitical tensions and weapons depletion are fueling a surge in global defense spending.” 

Domestic Sales

In terms of the domestic Department of Defense expenditures, in 2023:

DoD contract obligations, payroll spending, and grant awards in the 50 states and the District of Columbia totaled $558.7 billion, which is 2.2 percent of the country's gross domestic product.  If the total spending were divided across every U.S. resident, it would amount to $1,679 per U.S. citizen.  Of those funds, $389.5 billion (70 percent) were spent on contracts for products and services, $159.4 billion (28 percent) paid the salaries of DoD personnel, and $9.7 billion (2 percent) were awarded as grants.

These DoD funds go primarily to Virginia, Texas, and California, although Virginia, Hawaii, and Connecticut were most reliant on the monies relative to their state economies.

Foreign Sales

According to the Stockholm International Peace Research Institute, the United States is the largest exporter of arms, providing 40% of the global output, and the three largest importers of US arms are Saudi Arabia, Japan, and Australia.  Very expensive US weapons exported include armored vehicles (including tanks), combat aircraft, artillery, surface-to-air missile systems, and warships.   With a single F-35 Stealth Fighter costing $110M (remember, Israel has 50 of these) and one M1 Abrams Tank costing $10M, one can imagine the wealth generated for the US economy.  Even if the top producers of these armaments—Raytheon, Lockheed Martin, General Dynamics, Boeing, Northrup Grumman—pay less in taxes than they ought, they provide jobs that drive the economy.  

And this is how the defense industry has become the US’s “defining feature” or “big business.”  Half of the monies allocated to DoD every year go to the defense industry; these companies that specialize in defense understand how to sell to the government, and lobby furiously to ensure the bipartisan support for their industry.  The Watson Institute reports that “ Weapons makers have spent $2.5 billion on lobbying over the past two decades, employing, on average, over 700 lobbyists per year over the past five years. That is more than one for every member of Congress.” 

But not only do these lobbyists come from the US military and federal government, the Pentagon even has a program called the Secretary of Defense Executive Fellows (SDEF) program that promotes lobbying and expands the big business of the defense industry.  This program “sends U.S. military officers to work at major corporations for a year, and then [they] return and provide recommendations to the DoD for how it might improve.”  Not only do a large portion—43%—of these military officers go on, post-military, to work for these defense contractors, according to the Quincy Institute for Responsible Statecraft,

Decades of SDEF recommendations have consistently focused on reforms that would both benefit corporations and bolster their influence over the DoD, including calls for a greater share of the agency’s budget to be given to military contractors, reduced oversight, greater private outsourcing of agency responsibilities, and the loosening of international arms trade regulations. (emphasis added)

So what?

Whoever is the President makes the policy governing the transfer of US-made weapons. Nearly every president since the Arms Export Control Act of 1976—Carter, Reagan, Clinton, Obama, Trump, and now Biden—has crafted a new Conventional Arms Transfer (CAT) Policy.  Until the next president crafts a new policy, however, the policy of the previous occupant of the White House prevails.  These policies seesaw, though, from limiting weapons transfers for social and humanitarian reasons to growing weapons transfers in order to benefit the US economy.  One can understand how this dramatic and frequent change might confuse friends and allies of the United States, let alone those nations who purchase weaponry from the US. 

In short, the United States’ decision to offer aid to other nations is not made based on a common morality, defending democracy, or as a favor to the benefitting country, as the American story tells us.  Instead, the aid is dependent on American national security, American values, and the advantages to the American defense industry.  Regardless of the focus of the CAT Policy of the current president in office, however, what is a constant in regard to Israel—and no other country—is that the US is obliged by law to ensure Israel’s Qualitative Military Edge. 

And that’s where we are now.

This is a complex issue for which I have no answers.  Such social-political-economic-military issues are ALWAYS convoluted and thorny, and, in this case, President Biden’s hands are, so to speak, morally tied when trying to decide NOT to send offensive weapons to Israel or to use leverage to influence Israeli policy. Despite the Israeli Prime Minister’s unresponsiveness to Biden’s diplomatic efforts, and despite the French President Emmanuel Macron calling for an embargo of western arms to Israel, any US President since 2008 is obliged by law to ensure Israel’s Qualitative Military Edge.

What we can see, then, is this prime example of the BIG BUSINESS of modern war.