The United States is cutting hundreds of millions of dollars in aid to Egypt in response to the ouster of President Mohamed Morsi and the crackdown by the military-backed government on his supporters.
The U.S. provides $1.5 billion in aid each year to Egypt. While the State Department did not provide a dollar amount of what was being withheld, most of it was expected to be military aid. A U.S. official said the aid being withheld included 10 Apache helicopters at a cost of about $500 million.
The official provided the information only on condition of anonymity because the official was not authorized to comment by name.
The U.S. decision to slash aid to Egypt will create new friction in Washington's already uneasy relations with the government that ousted the first democratically elected Egyptian president. And the consequences won't end there. The move will anger Persian Gulf states, push Egypt to seek assistance from U.S. rivals and upend decades of close ties with the Egyptians that that have been a bulwark of stability in the Middle East.
State Department spokeswoman Jen Psaki said in a statement Wednesday that the U.S. will withhold delivery of certain large-scale military systems as well as cash assistance to the Egyptian government until "credible progress" is made toward an inclusive government set up through free and fair elections.
The U.S. will still provide health and education assistance and money to help Egypt secure its borders, counter terrorism and ensure security in the Sinai.
The U.S. also will continue to provide parts for military equipment coming from the United States as well as military training and education. The U.S. military has continued shipments of thousands of spare parts for American weapons systems used by the Egyptian forces, including armored bulldozers for border security, radars and missiles.
In Cairo, military spokesman Col. Ahmed Mohammed Ali declined immediate comment.
Other details about what military assistance is being cut were not immediately known.
The U.S. had already suspended the delivery of four F-16 fighter jets to Egypt and canceled biennial U.S.-Egyptian military exercises.
The next military weapons shipment for Egypt was slated to include the Apache helicopters as well as a number of M1A1 tank kits, including machine guns and other equipment used with the tanks. That shipment also was to involve some used missiles — which have been moved and handled, but not yet fired. They could be used for spare parts by the Egyptian military or they could be refurbished and fired.
The U.S. and Egypt have gotten used to relying on one another. Egypt gives the United States permission to fly over its territory to supply American troops in the Gulf, allows the U.S. to move men and materiel through the Suez Canal without delay and cooperates with American intelligence agencies. It is unclear if cooperation on these fronts will be affected by the aid decision.
The decision also is not just about money. There are fears that the suspension of some aid will embolden pro-Morsi supporters who oppose the current government to stage more protests because they think the military-backed government will be weakened by the cut in aid.
The U.S. has been considering such a move since July, when the Egyptian military ousted Morsi. Ensuing violence between authorities and Morsi supporters has killed hundreds. The scheduled Nov. 4 trial of Morsi on charges that he incited the killings of opponents while in office and the U.S. decision to cut its aid to Egypt threaten to add to the turmoil.
The cutoff of some, but not all, U.S. aid also underscores the strategic shifts underway in the region as U.S. allies in the Gulf forge ahead with policies at odds with Washington. Saudi Arabia and other Gulf states, including the United Arab Emirates and Qatar, are strong backers of Syrian rebel factions and were openly dismayed when the U.S. set aside possible military strikes against Bashar Assad's government. The Gulf states also feel increasingly sidelined as Washington reaches out to their rival, Iran.
Iran had moved quickly to heal long-strained ties with Egypt following Morsi's election but now is redirecting its policies with Egyptian leaders who don't share Tehran's agenda.
In Cairo, Gen. Abdel-Fattah el-Sissi, who led the military effort that ousted Morsi, described Egypt's relations with the United States as "strategic" and founded on mutual interests. But he said his country would not tolerate pressure, "whether through actions or hints." His comments were in an interview published Wednesday — before the U.S. decision was announced — by the Cairo daily Al-Masry al-Youm.
U.S. aid to the Egyptians has a long history. Since the late 1970s, the country has been the second-largest recipient — after Israel — of U.S. bilateral foreign assistance, largely as a way to sustain the 1979 Egypt-Israeli peace treaty.
The United States gave Egypt $71.6 billion in assistance between 1948 and 2011, according to a Congressional Research Service report issued in June. That included $1.3 billion a year in military aid since 1987. The rest was economic assistance, some going to the government, some to other groups.
How much will the loss in U.S. aid matter?
Egypt has other allies who may be able to fill the financial void. In fact, Saudi Arabia and some of its Gulf Arab partners have provided a critical financial lifeline for Egypt's new government, pledging at least $12 billion so far and aiding in regional crackdowns on Morsi's Muslim Brotherhood. On Monday, Egypt's interim president, Adly Mansour, visited Saudi Arabia on his first foreign trip in a sign of the importance of the Gulf aid and political backing.
But Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies in Washington, said he isn't convinced that Saudi Arabia, for instance, is interested in providing the amount of long-term aid that Egypt has received from the United States for more than three decades. The Gulf states, generally, will express their disappointment over any cuts in U.S. aid to Egypt, he said.
"The Gulf states aren't happy because they think that not only has Egypt not done anything wrong, but that Egypt has done a lot of things right in snuffing out the early flames of political Islam," Alterman said. "They will feel that the U.S. in the interest of ... democracy is acting against its own concrete interests and the interests of its friends."
"Countries like China and probably Russia will likely see this as an opportunity to find new markets and to build a new relationship," he added.
A suspension of U.S. aid to Egypt, regardless of its size, also could feed the wave of nationalist sentiment gripping Egypt since the ouster of Morsi and boost the popularity of Egypt's military chief, el-Sissi, who has not ruled out a presidential run next year.
It will also resonate with Egyptians who believe that the United States was sorry to see Morsi go.
The aid decision is getting mixed reviews on Capitol Hill.
Rep. Eliot Engel, the top Democrat on the House Foreign Affairs Committee, criticized the Obama administration's expected announcement.
"The Egyptian military has handled the recent transition clumsily, but they have begun a democratic transition which will serve the Egyptian people well in the future and have also worked to maintain regional stability," Engel said in a statement. "During this fragile period we should be rebuilding partnerships in Egypt that enhance our bilateral relationship, not undermining them."
Others, including some sharp political opponents of Obama, supported the president's decision.
Sen. Rand Paul, R-Ky., whose bill to halt aid to Egypt was roundly defeated in the Senate in July, said he was happy to see the administration "finally thinking about following the law."
The administration has refrained from declaring that Morsi's removal amounted to a military coup, a designation that would have required the U.S. to suspend all but humanitarian assistance to Egypt. It did delay the delivery of some fighter planes, and as Egypt's military began a crackdown on Morsi supporters the president's advisers started to consider more muscular action. Obama canceled a joint military exercise and announced a new review of assistance.