Congress Doubles US Weapons Storage in Israel

In the last day before its recess Friday, the US House of Representatives and Senate approved loan guarantees to Israel and the doubling of US arms stored in Israel for emergency use.

Ezra HaLevi , | updated: 4:24 PM

The new Department of State Authorities Act of 2006 adds three years to the U.S. provision of loan guarantees to Israel, until 2011. It also includes an aid package for Israel separate from the annual U.S. aid package to the Jewish state.

In 2002 Israel requested loan guarantees from the United States to help it deal with the economic effects of the Oslo War and to prepare for the U.S. war in Iraq. In 2003, Congress approved $9 billion in guarantees over three years.

Loan guarantees are not grants; rather the U.S. is merely co-signing loans for Israel in the event that Israel were to default. This results in better terms on the loans for Israel, but has come at a price. Israel sends most of the money directly back into the U.S. economy.

Additionally, a condition of the guarantees is that the money may not be spent on development in any of the areas Israel liberated in the 1967 Six Day War, meaning Judea, Samaria and half of Jerusalem. In addition, whatever amount of government funds Israel decides to spend in those areas is deducted from the guarantees.

So far, Israel has used $4.6 billion of the $9 billion in U.S. loan guarantees, which were first extended until 2008 and now until 2011.

The Act benefits the U.S. as well, doubling the funds allotted to the existing program whereby America stores arms and equipment in classified US facilities in Israel, called War Reserve Stockpiles (WRS).

A WRS is a collection of war materials held in reserve in pre-positioned storage to be used if needed in wartime. America maintains war reserve stocks around the world -- mainly in NATO countries, but in some major non-NATO allies as well.

The bill still requires the signature of U.S. President George W. Bush. This is not expected to be a problem, as the move was initiated by his administration.