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What Happens if US Aid to Egypt is Cut?

As the US administration has decided to suspend some foreign military assistance to Egypt, consider this article from Reuters, carried by Ahram Online, from a few weeks previous:

Richard Genaille, deputy director of the Pentagon’s Defense Security Cooperation Agency, said he hoped the Obama administration reached a decision soon on whether to continue $1.23 billion in U.S. military assistance to Egypt, given the large number of weapons shipments in the pipeline.

“We’re kind of antsy about that,” Genaille said after a speech at the ComDef industry conference in Washington. “There’s a whole bunch of contracts out there. The bills keep coming in and we’ve got to be able to pay them somehow otherwise we go in default.”

….

Funding for the weapons sales must be finalized or “obligated” by September 30, when the U.S. government’s 2013 fiscal year ends, or the funds will revert to the U.S. Treasury, officials say.

“We’re kind of hoping that sometime pretty soon they’ll make a decision one way or another – either we terminate or they actually give us some more of the Egyptian (foreign military funding) so we can pay the bills,” Genaille said.

He said the administration was trying to sort through the potential costs associated with terminating contracts, but the amount would be “substantial – in the billions.”

US ‘aid’ to Egypt is a useful foreign policy tool, worthy to be debated as a legitimate budget expenditure. But it is important to remember this aid is essentially a subsidy to the defense industry. It’s just nice to hear the Pentagon brass say so.