U.S. Faces Financial Troubles As Egypt Needs Aid

The U.S. has poured $28 billion of economic assistance into Egypt in recent decades. But now when Egypt's needs are the greatest, the U.S. and Europe are cash strapped. The Obama administration is trying to quickly reprogram aid to make sure it helps bolster democratic forces in the country and creates jobs to help ease the country's transition. The International Monetary Fund's chief Christine Lagarde says her door is open as well, but countries like Egypt need to ask for aid, which does come with some conditions. Meanwhile, leading members of Congress say the U.S. has to also start imposing conditions, particularly on U.S. military aid.

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In recent decades, the U.S. has poured tens of billions of dollars into Egypt, for both development and the military. But as Egypt changes, that formula may be changing too. The U.S. is facing financial troubles just when Egypt's needs are the greatest. And some members of Congress are raising questions about military aid. There is a lot of that still flowing.

But as NPR's Michele Kelemen reports, lawmakers are calling for tougher restrictions.

MICHELE KELEMEN, BYLINE: The Obama administration has been leery of using its military aid as leverage in Egypt and tried to talk members of Congress out of placing conditions on the money. But Senator Patrick Leahy, who is leading the charge, says there should be no blank check.

SENATOR PATRICK LEAHY: If the administration stops to think about it, I'm doing them a favor. If there are conditions on it, it allows them to do a carrot and stick kind of situation. It allows them to say here we've got all this aid, the money will be there, provided you do the things that you have promised you're going to do.

KELEMEN: In the past, U.S. aid was meant to reward Egypt for its 1979 peace treaty with Israel and its support for U.S. policies in the region. But everything has changed now, Leahy says, and the U.S. should make sure its money isn't helping Egypt's military cling to power.

LEAHY: I don't want American aid to be used to repress the people of Egypt or any other country.

KELEMEN: The Vermont Democrat chairs the Senate Appropriations Subcommittee on Foreign Operations and he's worried about the recent use of American-made tear gas by Egyptian police against protesters in Cairo. Those concerns are echoed by Adotei Akwei of Amnesty International USA.

ADOTEI AKWEI: We're really looking at the tear gas issue, but we have - since the whole crisis in Egypt erupted earlier this year - we have consistently called for a cessation of all military transfers across the board.

KELEMEN: The State Department says it's looking into the use of teargas by Egyptian authorities. Akwei is holding out for a stronger response to what he calls the excessive use of force by Egyptian authorities.

AKWEI: The onus is now on the Egyptian government to improve the accountability and to answer the allegations of ill treatment, but also for the U.S. to really look at its role in unwittingly or unknowingly facilitating the violence that we did see.

KELEMEN: He'd like to see the U.S. recalibrate its aid program to be less focused on military assistance. U.S. officials say they have spent $165 million this year on new development projects and are looking for other creative ways, including debt relief, to help Egypt through this rocky period.

Undersecretary of State Bob Hormats says there is a sense of urgency.

ROBERT HORMATS: We're not going to wait till things quiet down. There's still a lot of turmoil in the region, there's still a lot of uncertainty. You can't wait until there's total certainty. We have to do this stuff now.

KELEMEN: Hormats told the conference at the Woodrow Wilson Center that the U.S. and international financial institutions should provide some measure of stability in Egypt and across the region.

HORMATS: The worst thing that could happen is not to provide support. The economies continue, in some cases, to deteriorate or at least don't perform very well. That makes the political transition process more difficult. So we see these things as going hand-in-hand with one another.

KELEMEN: U.S. officials say they have been generous over the decades to Egypt, though non-military aid has fallen off in recent years to a couple hundred million dollars a year, while military aid remains steady at 1.3 billion. That gives a certain impression, says Senator Leahy.

LEAHY: If you go and to talk to the demonstrators, they say, hey, the United States is giving you development aid. What they're going to do is hold up the tear gas canisters that say, made in the USA.

KELEMEN: Despite his concerns, Senator Leahy remains an advocate of U.S. assistance for Egypt, provided it helps move the country in the right direction. Michele Kelemen, NPR News, Washington.

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