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U.S. Senate proposes $47 million cut to aid to Egypt
Published in Daily News Egypt on 13 - 05 - 2006

CAIRO: The United States Senate quietly added a $47 million cut to aid to Egypt in its latest legislation for war and disaster-recovery funding.
The bill allocates some $109 billion toward military expenditure in Iraq and Afghanistan and domestic hurricane recovery efforts. Senators added the provision reducing aid to Egypt at the last minute prior to passing the bill.
The bill is subject to the approval of the U.S. House of Representatives and President George W. Bush. The amount allocated by the bill is also approximately $17 billion more that Bush is willing to approve.
I ve requested a bill that would provide emergency funds for the war on terror and hurricane relief, Bush said in a speech in Washington prior to the senate s vote on the bill. Unfortunately, there are some here in Washington trying to load that bill up with unnecessary spending. This bill is for emergency spending, and it should be limited to emergency measures.
Bush added that he would veto any bill that exceeds the $92.2 billion he requested. Although he did not refer to the cut in aid to Egypt, the U.S. State Department repeated it s stance on the continuation of aid.
We have, in the past, and currently do support continued disbursement of that aid at the levels at which we have proposed, which is fairly consistent over the past several years, and disbursement of that aid to allocations broken down between military and nonmilitary items, says U.S. State Department Spokesman Sean McCormack.
Discussions are underway between the house and senate to try to reach a compromise. Meanwhile, at least one member of the house has expressed concern about the reduction of aid to Egypt.
Egypt is a strategic ally. We shouldn t be doing something like this right now, Jim Kolbe, chairman of the foreign operations subcommittee of the U.S. House of Representatives, tells the National Journal.
Egypt is the second-largest recipient of U.S. aid after Israel, with $1.2 billion provided annually in military assistance and another $495 million in grants managed by the U.S. Agency for International Development (USAID).
The agency spends $200 million on loans to Egyptian businesses to import commodities and an equal amount on its cash transfer program, under which payments are made to the Egyptian government upon the fulfillment of pre-agreed reforms. The remaining funds are spent mainly on development projects.
The agency s budget was already set to reduce by 5 percent per year for the next four years. USAID tells The Daily Star Egypt that the cut, if signed into law, will be over and above the 5 percent reduction and that it will come out of the agency s cash transfer program.
Congress is frequently critical of both military assistance as well as USAID s programs in Egypt. Each year, in exchange for the cash transfer, Egypt is supposed to undertake additional economic reforms, said Henry Hyde, chairman of the House of Representative s council on international relations, in 2004. Yet, [U.S.] administration after administration has assented to conditionality packages that are remarkably similar to one another.
Mohammed El-Sayed Saeed of the Al-Ahram Center for Political and Strategic Studies adds that American legislators have been keen to convert the military assistance into grants to push economic and political reforms, a move strongly opposed by the U.S. administration. The latest provision may therefore indicate a compromise between the positions of Congress and the Bush administration.
The provision also falls far short of what was expected from Congress. It is clear that the serious threat of the U.S. Congress has ended and that they are now resorting to symbolic measures, says Saeed. It reflects the anger of Congress towards recent political developments in Egypt.
The military assistance is critical to the Egyptian government and Saeed explains that its elimination would result in a substantial schism in relations between the U.S. and Egyptian governments.
The military assistance is fundamental for the balance of power in the region, says Saeed. It is not easy to substitute because U.S. military products and technology are difficult to replace. The Egyptian military also relies on U.S. companies for the maintenance of its equipment.


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