You don't have a welfare state on $120 million.
Read.
Civilian aid to Israel is near an end.
Military aid, a pittance compared to the cost of stationing US forces protecting Korea, Europe, etc, is wholly spent in the United States.
Israel benefits but so do companies and workers in the US.
And it's all for a common cause: fighting radical Islam
$150 million in aid for the Palestinian Authority will be subject to review, and the US will continue funding ongoing projects.
My guess, US aid to the palestinians will go on as usual through USAID. All humanitarian, of course. Last year they picked up about $250 million in a supplemental appropriation, won't be surprised if they do this year too. After Hamas "recognizes" Israel in a press release.
Did you forget a decade in Saudi Arabia and Kuwait?