The U.S. sends about $4 billion to Israel in military and economic aid every year, in addition to tax-exempt contributions. About $3 billion is mandated directly from Congress (the rest comes in smaller increments from specific U.S. agencies) and amounts to about one-quarter of the entire U.S. aid budget. U.S. laws require that aid to Israel remain at least above Israel's international debt, thus insuring that U.S. tax funds act as a guarantee of all Israeli loans. Israel is among only a tiny number of countries whose U.S. aid allotments have remained steady even in recent years of economic slump.
Other U.S. laws insure specific aid commitments to Israel as a result of the first Camp David process between Israel and Egypt. Under those arrangements, Egypt, with nearly 70 million people and a per capita annual income of just over $3000, receives only about two-thirds of the funds allocated to Israel.
In 2001 Israel itself requested that the apportionment of its U.S. aid be shifted. Instead of the current balance of about $1.8 billion in military aid and $1.2 billion in economic assistance, the new plan called for a reduction by about 10 percent of the economic aid, to be matched by parallel increases in military aid. The goal would be, after ten years, to have Israel's entire aid allocation in the form of military assistance.
Since the creation of the Palestinian Authority, the U.S. has provided some economic aid to the Palestinians. But unlike European and Japanese aid to the Palestinian Authority, or U.S. aid to Israel, U.S. financial support for Palestinians is provided only to non-governmental organizations working in the occupied territories—none goes directly to the PA. While the PA, like so many fully sovereign governments that the U.S. supports, certainly has serious problems of corruption, bypassing it only insures the PA's continued weakness and inability to even begin to function as a government.