Egypt Aid Breakdown: What’s on the table?

Following the Egyptian military’s intervention and the removal of President Mohamed Morsi from power on June 3, the trajectory of Egypt’s democratic transition is uncertain. Amidst the ensuing media confusion, the question of whether to suspend or continue the delivery of U.S. assistance to Egypt hangs in the balance because of a U.S. law that prohibits most direct assistance to countries whose militaries depose elected heads of state.

Under law, the U.S. government is explicitly prohibited from financing directly “any assistance to the government of any country whose duly elected head of government is deposed by military coup or decree,” or “a coup d’état or decree in which the military plays a decisive role” per Section 7008 in the FY2012 Department of State, Foreign Operations, and Related Programs Appropriations Act (PDF), which was carried over into FY2013 via continuing resolution.

Section 7008 does specify that it “shall not apply to assistance to promote democratic elections or public participation in democratic processes.” Section 7041(a)(3) of the same law specifically notes that support to Egypt through the Economic Support Fund appropriations “may be made available, notwithstanding any other provision of law, for an Egypt initiative, particularly for the specific costs referred to in the authorities referenced herein, for the purpose of improving the lives of the Egyptian people through education, investment in jobs and skills (including secondary and vocational education), and access to finance for small and medium enterprises with emphasis on expanding opportunities for women, as well as other appropriate market-reform and economic growth activities.”

This means that all direct, governmental assistance allocated through the State and Foreign Operations Bill (PDF), which Congress uses to fund the State Department’s foreign assistance accounts, are at risk of suspension. These accounts include Egypt’s security assistance programs (Foreign Military Financing, International Military Education and Training, Nonproliferation, Anti-terrorism, Demining, and Related programs, and International Narcotics Control and Law Enforcement).

There is also no presidential waiver on Section 7008’s provisions, an important distinction from other Congressional democracy and human rights conditions already placed on assistance to Egypt, since those conditions are historically eligible to be – and have consistently been – waived by the administration.

Because of its “significant consequences,” according to White House Press Secretary Jay Carney, the Obama administration has not yet decided whether Morsi’s removal from power constitutes the legal definition of a coup. While declining to offer further details, State Department Spokesperson Jen Psaki confirmed on June 8 that “broadly speaking,” continuing military assistance to Egypt is a “national security priority.” In contrast, Senator Carl Levin (D–MI) joined Senators Pat Leahy (D-VT) and John McCain (R–AZ) in arguing that the U.S. needs to “suspend aid to the new government until it does in fact schedule elections and put in place a process that comes up with a new constitution.” Other members of Congress including Senator Bob Corker (R-TN) and Jack Reed (D-RI) think aid should not be suspended but instead used as leverage with the Egyptian government.

To better understand what is at stake in FY2014, the following chart identifies the funds requested for FY2014 by the administration for Egypt in U.S. dollars, and how it justifies these requests:

Account 2012 2013 2014 Request
Economic Support Fund (ESF) 250,000,000 250,000,000 250,000,000
Foreign Military Financing (FMF) 1,300,000,000 1,300,000,000 1,300,000,000
International Military Education and Training (IMET) 1,389,000

 

1,800,000 1,800,000
International Narcotics Control and Law Enforcement (INCLE) 1,000,000 7,900,000 4,106,000
Nonproliferation, Anti-terrorism, Demining and Related programs (NADR) 5,600,000 N/A N/A

 

In justifying this assistance, the State Department cites in its FY14 Congressional Budget Justification that FMF promotes “regional and global stability, strengthen[s] military support for democratically-elected governments and contain[s] transnational threats, including terrorism and trafficking in narcotics, weapons, and persons.” The State Department says that INCLE funding supports efforts “critical to combating transnational crime and illicit threats, including efforts against terrorist networks in the illegal drug trade and illicit enterprises,” while IMET funding “provides training and education on a grant basis to students from allied and friendly nations.” NADR funding, in its name alone, supports efforts to support nonproliferation, anti-terrorism, demining and related efforts.

The USD 1.3 billion Egypt is set to receive in FMF funding in 2014 is second only to Israel’s requested FMF package and represents 22 percent of all FMF funding globally (PDF). This assistance began following the Camp David Accords of 1978, when U.S. military assistance to Egypt aimed to “cement Egypt-Israel peace,” and to hedge against other security threats in the region. Military assistance since 1987 has averaged USD 1.3 billion. Though the U.S. is not obligated by the Camp David Accords to provide such assistance, the stated purpose of this aid, according to the Congressional Research Service, is to assist the Egyptian military in “halting the movement of illicit goods across Egyptian borders, increasing security in the Sinai, preventing attacks from Gaza into Israel, supporting counterterrorism operations, and securing transit through the Suez Canal” (PDF).

Economic assistance to Egypt, separate from military aid, falls under a category of funds allotted for “peace and security” by the State Department. Between 1975 and 2009, according to USAID’s budget breakdown for Egypt programs, U.S. economic assistance programs have totaled USD 28.6 billion, although not all economic assistance flows through USAID channels. Some Economic Support Funds are distributed through other mechanisms like the Middle East Partnership Initiative, DRL programs, direct budget support and loan guarantees. Per year, this economic assistance funding amounted to as much as USD 815 millionannually throughout the 1980s and 1990s, declining to roughly USD 250 million annually in recent years.  Beginning in 1998, per the “Glide Path Agreement,” economic aid to both Egypt and Israel decreased, at a time when Congress sought to reduce foreign expenditures. Deteriorating relations between the Bush administration and Mubarak’s government in the late 2000s also contributed to a decline in economic aid, despite Egypt’s worsening economic struggles at the time.

Among the Economic Support Funds that would continue even in the event of the suspension of military aid are those earmarked specifically to support democracy and electoral assistance.

USD 28.0 million is allotted in the category of Democracy, Human Rights, and Governance for FY2014. Of that total:

  • USD 9.4 million is allotted to support rule of law and human rights
  • USD 9.3 million is allotted to support good governance
  • USD 5.8 million is allotted to support political competition and consensus-building
  • USD 3.5 million is allotted to support civil society

As the debate continues among analysts and policymakers as to whether or not the U.S. should suspend aid to Egypt, legislators might look to other sources of aid to fill the gap, such as Section 1208 funding (PDF), which authorizes the Defense Department to expend up to $50 million to “support foreign forces, irregular forces, groups, or individuals engaged in supporting or facilitating ongoing operations by US special operations forces in combating terrorism.”  Senator McCain and others may be looking to Section 1208 as a potential funding source as “lawful means to cooperate with the Egyptian military on a limited basis, perhaps using Department of Defense authorities, to safeguard vital national security interests such as counterterrorism, intelligence sharing, border security, and the maintenance of regional peace.”

Other lawmakers, such as Rep. Kay Granger, have suggested that Congress may be willing to pass a waiver to the coup legislation if doing so were deemed to be in the U.S. national security interest.  The most recent example of such a waiver took place in 2001 in order to resume assistance to Pakistan after a military coup by Pervez Musharraf in 1999.

More analysis on U.S. aid to Egypt can be found in recent pieces on ProPublica and the Washington Post.

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