The Moral Hazard of Biden’s Support for Israel

In the surreal two and a half hours between Israel’s announcement on April 13 that an Iranian attack was underway and the arrival of the first weapons, I, like many others, found myself pondering the likelihood of a regional war. My assessment, as I posted on X at the time, was that “preventing further escalation may hinge on both sides feeling able to claim victory—Iran on the basis of what gets through, and Israel on the basis of what doesn’t.” By this metric, the prospects for preventing further escalation seem good. Both sides have indeed declared victory—Israel on the basis of its defensive prowess and Iran on the basis of exaggerated claims of the strike’s success—which would normally be enough to prevent further fighting.

But these aren’t necessarily normal conditions. Governments around the world are clearly concerned that Israel may launch a punitive attack on Iran that could spark a regional conflagration—and with good reason. Benny Gantz, a member of Israel’s three-man war cabinet, has vowed to “exact a price from Iran, in a way and at a time that suits us.” Israeli Defense Minister Yoav Gallant has reportedly informed his U.S. counterpart that “Israel has no choice but to respond.” And Prime Minister Benjamin Netanyahu’s prospects of staying in office will dim when the shooting in Gaza and with Iran eventually ceases and the Israeli public holds him to account for failing to prevent the Oct. 7 atrocities and to bring back so many of the hostages captured that day.

If U.S. President Joe Biden is as serious about avoiding a wider war as he says he is, his administration must do more than simply ask Israel to show restraint. The United States cannot stop Israel from retaliating in whatever way it wants against Iran, but it can choose whether to help Israel manage the consequences. To this end, Washington should use the best leverage it has—its commitment to defend Israel—to make clear that if Israel wants U.S. help in fighting the regional war that could be unleashed by its retaliating against Iran, it had better make sure that Washington is on board with whatever action it takes.

So far, two factors have prevented the Iranian strike from precipitating an all-out war: the stunning effectiveness of Israel’s defensive operations and the willingness of Iranian leaders, who apparently want to avoid a regional conflict, to tolerate Israel’s success.

With help from France, Jordan, the United Kingdom, and the United States, Israel’s defenses proved remarkably effective in the attack. Fighters succeeded in destroying many unmanned aerial vehicles, or UAVs, and conceivably some cruise missiles, while missile defenses took care of the rest. Israel says 99 percent of the incoming weapons were intercepted. As a result, the Iranian strike appears to have caused no deaths, only one serious casualty (a seven-year-old Bedouin girl), and just light damage to a single air base. Had the attacks been more destructive and Israeli television on Saturday night been filled with images of the dead and wounded, it seems likely that Israel would have struck back already. Instead, Israel’s successful defense reduced—though did not eliminate—the pressures on its leaders to retaliate.

There is probably some truth to the claim that Iran sought to launch a spectacular-looking strike with less-than-spectacular effects. It telegraphed its actions in advance. It launched slow-flying UAVs from Iran (as opposed to Syria or Lebanon), from where they took more than two hours to reach their targets, making it easier for Israel to blunt the attack. Even so, given the strike’s size—a remarkable 300-plus UAVs, cruise missiles, and ballistic missiles—it seems likely that Iran was hoping to inflict greater costs on Israel that it actually did.

Iranian leaders have hidden their disappointment and instead cleverly declared victory over Israel. State television reported (wrongly) that half the incoming missiles destroyed their intended targets and showed months-old footage of a fire in Chile, claiming (again, wrongly) that it was footage of Israel following the strike. Rather than undermining Israeli interests, such misinformation was likely intended to reduce pressure on Iranian leaders to do more.

The current equilibrium, however, is an uneasy one. If Israel chooses to strike back hard against Iran, Tehran may decide that Israel has been emboldened by its defensive prowess and change its tactics to ensure that its next strike on Israel inflicts more damage than the last one. In such a scenario, if Israeli defenses perform merely well—as opposed to almost perfectly, as they did over the weekend—Israeli deaths could easily end up being measured in the hundreds, and the Middle East would find itself in a major regional conflagration.

As Israeli leaders decide what to do next, they are no doubt aware of the insurance policy that Biden has offered them. Immediately after the attack, Biden reaffirmed “America’s ironclad commitment to the security of Israel”—a commitment he has more than upheld during the seven months of Israel’s war against Hamas (much to the detriment of the Palestinians in Gaza and the dismay of much of the world).

Counterintuitively, this commitment may undermine the United States’ goal of preventing a regional conflict. Israel may now figure that, if things get out of hand with Iran, there’s a decent chance that Washington will bail it out.

To be sure, the U.S. role in the defense of Israel over the weekend was laudable. By destroying more than 80 UAVs and at least six ballistic missiles, the United States saved lives, directly (by blunting Iran’s attack) and indirectly (by reducing the pressures on Israel’s leaders to respond). However, by underscoring both the willingness and the ability of the United States to defend Israel, Washington may have prompted Israeli leaders to downgrade the risks of military operations against Iran.

As a result, Israel may behave more aggressively than it otherwise would—an example of so-called moral hazard. This phenomenon is well known in the insurance industry. For example, one study (from Israel, appropriately enough) showed that drivers who receive subsidized insurance drive more aggressively—and get into more accidents—than those who don’t. The United States’ security guarantee to Israel is a form of insurance—and Israel doesn’t even have to pay a premium.

The United States should not want its security guarantees to embolden any ally, but in the case of Israel, the problem is particularly acute. The United States has no formal security treaty with Israel, in no small part because Israel has never wanted to accept the constraints that inevitably come with such an arrangement. If Israel does not want to accept such constraints, however, the United States should not be willing to write Israel an unconditional insurance policy.

In public, and reportedly also in private, U.S. leaders have urged their Israeli counterparts to show restraint. Yet, however urgent they may be, exhortations alone may be insufficient for preventing escalation since there is currently little incentive for Israel to restrain its behavior on Washington’s behalf.

Israel frequently ignores U.S. interests. For example, it reportedly did not inform the United States before conducting the April 1 strike on an Iranian consular building in Syria that induced Iran to attack Israel. Netanyahu’s political survival is likely more important to him than reactions from Washington, and his precarious domestic position may be bolstered if regional tensions continue to boil. Moreover, because Biden has offered Israel unconditional public support so frequently and because a prolonged conflict in the Middle East would undermine U.S. interests, Israel’s leaders may calculate (rightly or wrongly) that, if push comes to shove, the president will have no choice but to come to their defense.

To reduce the danger of Israel starting a war that it needs the United States to finish, U.S. officials should make it very clear—ideally in public as well as in private—that the U.S. commitment to Israeli security is conditional. The United States’ help in a prolonged conflict against Iran—supplying munitions, intercepting UAVs and missiles, and conducting strikes—would be invaluable. If Israel wants such help, it should ensure that the United States supports any near-term retaliation against Iran.

Israel is a sovereign state, of course; it can choose to attack Iran whether or not Washington blesses its actions. But the United States is a sovereign state, too. And if Netanyahu takes actions that Biden views as needlessly reckless, and hence damaging to U.S. interests, the United States can—and, indeed, should—choose to let Israel deal with the consequences.