Direct aid to Israel should be phased out to ‘reduce US leverage,’ influential conservative groups argue

A new report from the conservative Heritage Foundation calling for the U.S. to phase out direct aid to Israel in favor of a “strategic partnership” is facing backlash from pro-Israel advocates.

But the report’s authors tell Fox News Digital they’ve been misunderstood. The “best thing” for Israel would not be to leave them at the mercy of U.S. policymakers who can choose to withhold direct aid, they say. 

“Our goal is actually to reduce U.S. leverage over Israel. I don’t want to force them to do stuff,” said Victoria Coates, deputy national security advisor to President Donald Trump during the first administration and co-author of the report.

“We want them to do stuff because we have a strong partnership and they have confidence that the United States is their best partner, but we don’t want that to be because we bought and paid for them,” she explained in an interview with Fox News Digital. 

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A current memorandum of understanding [MOU] signed in 2016 stipulates that the U.S. provides Israel $3.8 billion in foreign military financing per year until 2028. Congress allocated a supplemental $9 billion in 2024 for Israel’s war against Hamas.

The memorandum must be renegotiated in 2026, which Heritage argues will allow Israel’s relationship with the U.S. to evolve from “primarily a security aid recipient” to that of a “true strategic partnership.”

The Heritage plan calls for a new MOU that increases Israeli aid to $4 billion from fiscal year 2029-2032, and requires all of it be spent on equipment made in the U.S., before decreasing that number by $250 million per year until it ends in FY 2047. 

But the call to wind down military aid raised some eyebrows when it was first reported by Jewish Insider on Tuesday.

Rep. Steny Hoyer, D-Md., said it was, “wrong, dangerous, and gives comfort to those who seek [Israel’s] destruction.”

House Foreign Affairs Chairman Brian Mast, R-Fla., and Israeli Ambassador to the U.S. Yechiel Leiter had been slated to headline an event at the Heritage headquarters Wednesday to discuss the report, but they abruptly withdrew the day before. An Israeli embassy spokesperson said the ambassador would not be able to attend due to a “miscommunication regarding the format for the event,” but “looks forward to future engagement” with Heritage.

Still, the idea of reorienting the Israeli relationship got the backing of Jonathan Schanzer, executive director at the Foundation for Defense of Democracies, a hawkish pro-Israel think tank.

“It’s a legitimate debate that I think needs to unfold,” Schanzer told Fox News Digital. “What happened over the last year with the Biden administration withholding military assistance to Israel… must not happen again.

“I believe that is the impetus for the discussion that is now taking place. There does need to be discussion about making sure that America’s closest ally in the Middle East does not find itself in a position where it’s begging for the assistance that it expects.” 

Biden halted arms transfers to Israel last year amid frustrations over Prime Minister Benjamin Netanyahu’s handling of the war on Gaza. 

“There is a legitimate debate about whether this is healthy for Israel to continue down the path of total reliance on the U.S.,” Schanzer asserted. 

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“Some are trying to cast us as alt-right isolationists. It’s so disingenuous as to be laughable,” said Coates, who last year authored a book entitled ‘The Battle For The Jewish State: How Israel – And America – Can Win.’ 

She claimed the plan was “non-controversial” among the Israeli officials Heritage had circulated it to.

“The Biden administration used their control of Israeli resupply to try to coerce their behavior,” she said. 

Once Trump leaves office, “we can’t assume we’ll have another friendly president to this alliance, and if we have started a process like this now, we’ll be all the further along to having a more equal footing between Israel and the United States.”

Coates said the goal was for the U.S. to have the same sort of relationship it has with Israel as it does the United Kingdom.

“We want to continue to invest in joint programs, the way we do with the U.K. Do joint exercises, station stuff in the country which gives them a lot of confidence, but not necessarily direct aid.

“Given the scale of their economy, they don’t actually need $4 billion a year from us.” 

The report also calls for an increase in spending on U.S.-Israeli joint programs, like developing missile, rocket, and projectile defense capabilities for both nations, to $2.25 billion. 

Beginning in 2039, the plan calls for a $250 million per year increase in the amount of weapons the U.S. sells to Israel, until Israel is buying $2.25 billion worth of U.S.-made defense goods by 2047. 

Heritage also calls for an increase in intelligence sharing and joint counterterrorism measures, establishing a cybersecurity partnership, loosening export controls and establishing “high-level economic dialogue.”

It also said the U.S. should condition aid to Palestinians on “robust deradicalization and disengagement programming in Palestinian territories to undo decades of antisemitic and anti-Israel propaganda.”

In response to the backlash against the report, Coates added: “The outburst of antisemitism here in the United States, you know, the attacks on Israel, showed that there’s a lot of work to do here.”

“Rather than trying to tear us down for contributing, you know, maybe, maybe we should look more to getting after the substance of these issues, instead of instituting a circular firing squad.”