Outside observers might not have much trouble calling the events in Egypt on Wednesday a military coup. When a khaki-clad, beret-wearing general commandeers state TV to announce that the constitution is suspended and the president no longer president, "coup" seems like a pretty safe word.
But it's not quite as safe for the Obama administration. According to a section of the Foreign Assistance Act, a law first enacted in 1961, the United States is required to suspend foreign aid to any country that suffers a military coup. The law, according to its text, "restricts assistance to the government of any country whose duly elected head of government is deposed by military coup or decree." So if the U.S. determines that there was a coup in Egypt, that would seem to require an end to its aid for the country.
The United States sends enormous amounts of aid to Egypt, much of it direct military aid contingent on the 1979 Camp David Accords that established peace between Egypt and Israel. But it's not all military: Just in March, the Obama administration announced $250 million in aid to help Egypt through its ongoing economic struggles.
The Obama administration had suggested that it might follow through on the threat implicit in the Foreign Assistance Act. According to the Associated Press, U.S. officials told members of the Egyptian military that any coup would yield "consequences" for the U.S. aid they depend on.
It is probably unlikely that the Obama administration will want to substantially cut aid to Egypt. (Put aside the Camp David money for a moment — it's not clear to me that this is effected by the Foreign Assistance Act, and even if it is, it's very difficult to imagine Congress or the White House being willing to jeopardize this lynchpin of peace with Israel.) Like many aid programs, the hundreds of millions of dollars that goes to Egypt is not meant as a present or a reward; it's considered to ultimately serve U.S. interests. Egypt's troubled economy has been a key contributor the political instability there. That instability is bad for everyone, including U.S. interests.
If the Obama administration believes that its aid money to Egypt will ease its political transition, then it's unlikely to cut it substantially, even if that risks the appearance of hypocrisy. (It is possible that the U.S. might suspend some aid, perhaps in a symbolic gesture.) As University of North Carolina political science professor Greg Weeks points out on his blog, the Obama administration faced a similar dilemma during the 2009 Honduran political crisis that included a military coup. At first it called the events a coup, then it backpedaled, apparently to avoid triggering sanctions or other measures it wished to avoid. Politics superseded the letter of the law in that case and it may well happen again. But if you notice people in Washington getting on the White House's case to either label the events a "coup" or to not do so, this is why.