Yes, it’s mostly for US MIC. But it is debated and voted on by Congress and signed by the President. It’s on the American ballot.
But it means the IDF can have dangerous independence from the democratically elected government of Israel. And Israel is an industrious, hi tech, and prosperous country with a growing Jewish population that can afford such debt while the US is drowning in debt.
Historically, Israel’s defense spending has fluctuated, averaging 12.01% of GDP from 1960 to 2022, with a peak of 30.46% in 1975
About the only rationale for the spending is that a nuclear exchange between Israel and Iran, or a wider regional war, would cost us much more.