H.R. 7540 and S. 3855: Integrating Israel into America’s Defense and Technological Core
By Robert McDonald, Senior Legislative Researcher, A New Policy
Two new bills introduced on February 12, 2026, H.R. 7540 by Representative Ronny Jackson (R-TX-13) and S. 3855 by Senator Ted Budd (R-NC), would establish a U.S. - Israel Defense Technology Cooperation Initiative designed to accelerate joint research, development, and integration of Israeli origin defense technologies directly into U.S. military systems. On paper, this may sound like standard allied cooperation. In reality, it represents something much deeper and more consequential, entrenching Israel’s defense and intelligence ecosystem deep inside America’s own defense technology ecosystem and military supply chain.
At a moment when political pressure is mounting to reconsider unconditional military support to Israel, these bills offer an alternative strategy: make U.S. support to Israel structurally inseparable from America’s own defense industrial base.
What the Bills Actually Do:
H.R. 7540 and S. 3855 authorize $150 million annually from FY2027 - FY2029 and directs the Department of Defense to formalize deeper integration across:
Counter drone systems;
Missile and air defense;
Artificial intelligence and autonomous systems;
Quantum computing;
Cyber and electronic warfare;
Directed energy systems;
Defense industrial base coproduction; and,
Pathways from research and development into procurement
Unlike traditional Foreign Military Financing (FMF) this funding is framed as mutually beneficial technological cooperation. But functionally, it accomplishes the same objective of FMF: expanding U.S. - Israel defense entanglement. However, H.R. 7540 and S. 3855 do so in emerging domains that represent the “crown jewels” of future American military capability.
This Is Not Normal
The United States does not broadly share advanced AI, quantum, and next generation cyber capabilities. These technologies are tightly restricted, even among close allies, and shared in limited frameworks such as AUKUS Pillar II with the United Kingdom and Australia which is a core partnership in countering People Republic of China influence in the Pacific. You also might have noticed that there is no I in AUKUS or NATO. Yet H.R. 7540 and S. 3855 would facilitate deeper integration with Israel in exactly those areas that have to-date been limited to only Australia, the UK, and Canada.
That raises several hard questions:
Why are we expanding Israel’s access in domains we tightly restrict elsewhere?
What counterintelligence safeguards are included?
What legal guardrails exist regarding technology developed in occupied territory and tested on an occupied people?
We cannot ignore that many of Israel’s military technologies have been field-tested in the occupied West Bank and Gaza. Israeli AI enabled targeting systems, surveillance platforms, and predictive tools have been used in operations that human rights organizations and U.N. experts have linked to war crimes and genocide.These bills contain reporting requirements but do not contain binding human rights safeguards. They rely largely on general assurances rather than enforceable counterintelligence or legal protections. Embedding U.S. research, capital, and defense procurement pathways into technologies tested against an occupied civilian population risks implicating American institutions in the normalization of those systems.
Counterintelligence Risks Are Not Theoretical
Israel has previously been implicated in unauthorized technology transfers and has been identified by U.S. officials and analysts as posing persistent counterintelligence risks. This is not speculation. It is part of the historical record. Expanding access to AI, quantum, cyber, and directed energy research, without structural safeguards, exposes U.S. defense capabilities to:
Economic espionage
Diversion to adversaries, including the People’s Republic of China
Long-term erosion of U.S. military technological dominance
Once sensitive integration occurs, disentanglement becomes nearly impossible.
What This Really Is
These bills are not occurring in a vacuum. They follow earlier efforts such as H.R. 1229 and S. 554, which sought to expand similar cooperation and were inserted into must-pass legislation like the NDAA when standalone passage became difficult. When direct military aid becomes politically controversial, the strategy shifts to embedding the relationship into America’s own defense backbone to make separation economically and institutionally painful.
H.R. 7540 and S. 3855 are not simply about cooperation. They are about integration. They are about moving the U.S. - Israel defense ties from the realm of appropriations and oversight into the structural DNA of America’s defense industrial base. Once embedded, disentanglement becomes politically, economically, and strategically costly.
And that appears to be the point.
