The Obama administration has decided to drastically cut foreign aid to the Egyptian government after months of deliberating and slowly tapering off aid in light of violent crackdowns by the government over the past few months. A large percentage of the foreign aid the United States dispenses throughout the world goes into Egypt, to the tune of $1 billion per year. The decision comes amidst news that former President Mohammed Morsi's trial date has been set in early November.
An anonymous U.S. official says that the reason for the cessation of aid is "an accumulation of events," the latest incident occurring October 6, when 54 people were killed in clashes between pro and anti-Morsi activists. However, monetary support for security and counterterrorism operations in Sinai and upholding the terms of the Camp David Accords will most likely continue. The White House is still reluctant to make a formal announcement.
The latest and larger cut has been a long time coming as the situation in Egypt continues to deteriorate, the main reason apparently being that the administration's patience with Egypt is starting to erode. According to CNN, the decisive moment came with the ouster of Morsi in July, and a "principals meeting" last month between the president, Secretary of State John Kerry, Secretary of Defense Chuck Hagel, and National Security Adviser Susan Rice.
The hemming and hawing also stems from the fact that the United States refuses to call Morsi's removal a coup, even though the Egyptian military was involved in the former president's ouster. To officially refer to it as a coup would mean that all aid going into Egypt must be stopped, and the U.S. government does not want to cross that line, as it provides them with, in the words of one U.S. official, "flexibility."
For the Egyptian government, the most recent cuts in aid are more symbolic than anything else. While it will certainly rankle Cairo that the U.S. is not happy with how they have handled the crackdown on protesters since the removal of Morsi, it should not be expected that they will overreact to the news, especially since they will still receive a fair amount of aid in the form of counterterrorism assistance and what virtually amounts to bribe money in order to keep the Camp David Accords valid. Additionally, according to CNN's international correspondent Ben Wedeman, Gulf countries have been shipping billions of dollars into Egypt after the events of July 3.
There will not be a complete cutoff of U.S. aid going into Egypt. The most populous Arab country is, in spite of the violence perpetrated by the military, a key ally of the U.S. in the region.