The shift to military rule raises both a legal and political question concerning Egypt’s $1.3 billion in military aid (as opposed to the $250 million in economic assistance it receives from the United States). Under the Foreign Assistance Act, the federal of government is barred from providing military aid to a country that has undergone a coup d’etat, and a provision authored by Sen. Patrick Leahy (D-Vt.) as part of the annual appropriations process sets specific conditions under which Egypt can receive foreign aid. While the executive branch can unilaterally waive the conditions set out under the State Department’s annual spending bill — both the Obama and George W. Bush administrations have done so — the coup provision under the Foreign Assistance Act can only be addressed through additional congressional action.
In a statement on July 3, Leahy issued a statement saying that while former Egyptian president Mohamed Morsi “squandered a historic opportunity,” the military government still faces the sanctions laid out under U.S. law even as it will hopefully make a transition to democracy.
“In the meantime, our law is clear: U.S. aid is cut off when a democratically elected government is deposed by military coup or decree,” Leahy said. “As we work on the new budget, my committee also will review future aid to the Egyptian government as we wait for a clearer picture. As the world’s oldest democracy, this is a time to reaffirm our commitment to the principle that transfers of power should be by the ballot, not by force of arms.”
And other prominent politicians have reached a similar conclusion: ““Reluctantly, I believe that we have to suspend aid until such time as there is a new constitution and a free and fair election,” Sen. John McCain (R-Ariz.) said Sunday on CBS’s “Face the Nation.”
However the White House has refrained from saying whether a coup has taken place in Egypt: “I think it would not be in the best interest of the United States to immediately change our assistance programs to Egypt,” White House press secretary Jay Carney told reporters on Monday. “We are reviewing our obligations under the law, and we will be consulting with Congress about the way forward.”
Regardless of whether the Obama administration concludes a coup has, indeed, taken place, several Mideast policy experts said the time had come for a serious look at setting out new conditions for U.S. foreign aid to Egypt.
Jon Alterman, who directs the Middle East program at the Center for Strategic and International Studies, said neither country has “thought deeply about our aid relationship” since the 1970s.
While Alterman said a sudden cutoff of all financial assistance to Egypt, “does not strike me as a wise policy… thinking about what do we get and what do we give, and is the balance right, is not a bad thing.”
Georgetown University religion and international affairs professor John L. Esposito said America needs to impose some conditions on the money it gives Egypt because it “is the only leverage we have” to influence the actions of the Egyptian military.
“The question of aid is a bargaining chip, and the only bargaining chip we have,” Esposito said, adding that if the Obama administration does not raise the prospect of cutting off assistance, at least in part, “We will be formally seen as endorsing whatever this military government does -- not only what it does in the future but what it’s done recently.”
But the academics who monitor the region closely also warned that there are inherent risks in doing anything to undermine Egypt, which has not only historically helped maintain stability in the region through its peace treaty with Israel, but provided critical military access to U.S. ships and planes through its airspace and the Suez Canal.
Severing the assistance, or placing strict conditions on it could alienate Egyptians, many of whom are already angry about America's approach to Morsi and his ouster. And since America provides the military aid by purchasing weapons systems from U.S. contractors and shipping them to Egypt, University of Minnesota public policy professor Raghui Assaad said revoking that aid "is going to have a much more devastating effect on the U.S. defense contractors than the Egyptian economy."
“It’s a relationship that both sides value greatly and benefit from greatly,” said Tamara Cofman Wittes, director of the Saban Center for Middle East Policy at the Brookings Institution, adding that U.S. policymakers are grappling with “a near-term issue about what can the U.S. do more effectively to get Egypt back on a stable democratic trajectory.”
Assaad cautioned against threatening to cut off aid, saying it would “dramatically reduce the U.S. presence in the region” at a time when Saudi Arabia has just pledged $5 billion and the United Arab Emirates has promised $3 billion in assistance for Egypt.
“It will send a signal to Egyptians that the U.S. is on the side of Morsi,” he said. “They will not interpret it as signaling the U.S. is on the side of due process and democracy.”
For Alterman, even holding a spirited debate about whether to change the way we provide aid could help influence the political outcome in Egypt.
“The reality is that people in Egypt would pay attention to the debate in Congress and would pay attention to what the White House is saying about this. Even articulating those things -- what the advantages are and what the concerns are -- is, I think, a helpful thing,” he said. “That would send a powerful message. Egyptians have come to treat U.S. assistance as entitlement, and I think that’s a problem.”
But since actually cutting off aid is such a loaded proposition, Wittes noted, the fact that the White House has delayed deciding how to proceed could allow it to use its best form of leverage without losing it altogether.
“Aid conditionality is a gun with a single bullet. Once you fire it, it’s empty,” she said, adding the administration could “drag this determination process out and use that period of time for intensive conversation” with Egypt about the best path forward.
Assaad embraced that analogy, but framed it a little differently. "It’s the one bullet that is going to ricochet and come back and hit the U.S.," he said.