President Barack Obama announced that the cuts to aid for Israel resulting from the sequester budget cuts, an automatic 8 percent cut across the federal budget that went into effect last Friday, will be much lower than originally thought.
Estimates earlier in the week said that Israel stood to lose $250 million in U.S. aid according to the across-the-board 8% figure. The reduction for Israel, however, will be only 5%. This means that the cut will be $155 million, $95 million less than the original amount, in the 2013 fiscal year, out of a total of $3.1 billion.
Sources in Washington confirmed the adjusted amount to Finance Minister Yuval Steinitz. The Finance Ministry chose not to officially publish the decision, allowing Obama to make the announcement during his visit to Israel in March, but someone from within the ministry leaked it.
U.S. foreign aid to Israel stands at $3.1 billion for 2013, $2.4 billion of which goes into Israel's 2013 budget under "other revenue." As a result, the continued development of the Iron Dome missile interceptor will not be effected by the cut. The budget cut does, however, provide the Finance Ministry with good reason to recommend that Prime Minister Benjamin Netanyahu trim Israel's defense budget by 4.5 billion shekels ($1.2 billion): 1.5 billion shekels (about $403 million) in 2013 and another 3 billion shekels (about $805 million) the following year.