Recent Congressional Developments on Egypt Aid

The US Senate and House of Representatives appropriations committees have now each passed their versions of the bills that fund the foreign assistance programs for the new Fiscal Year (FY) 2016 that begins on October 1. Both bills provide Egypt aid at the level requested by the Obama administration, but as in recent years, the Senate gives relatively more attention to human rights issues. As is also typical for politically-sensitive Egypt aid, both bills are filled with numerous directives regarding how the executive branch can use the appropriated funds.

Common Features

Both committees’ bills appropriate up to $1.3 billion in Foreign Military Financing (FMF) and up to $150 million in Economic Support Funds (ESF)—the same as current law.

The House and the Senate versions both require the Secretary of State to certify to Congress that the Egyptian government is “sustaining the strategic relationship with the United States” and “meeting its obligations under the 1979 Egypt-Israel Peace Treaty” before any assistance for the government can be made available.

Both bills continue to allow Egypt’s FMF to be deposited, following the required certifications and consultations with Congress, in an interest-bearing account at the Federal Reserve Bank of New York. Since 2000, this privilege has enabled Egypt to use the interest earned to buy additional defense items and services. Israel is the only other country with this benefit.

Both bills are silent on the Obama administration’s announcement in late March that starting in FY 2018 the United States will end cash flow financing for Egypt—another special perk that allows Egypt (and Israel) to pay for weapons in installments rather than up-front—and to use FMF only for counter-terrorism, border security, maritime security, Sinai security, and sustainment of existing US-purchased weapons systems. This suggests congressional agreement with, or at least not opposition to, the administration’s new policy, which would implement the most significant changes to Egypt’s FMF program since its 1979 inception. The House committee bill does require the Secretary to “consult” with appropriators on the planned restructuring.

Regarding ESF, Congress, with executive-branch concurrence, has been gradually reducing Egypt’s appropriation from $415 million in FY 2008, to $250 million from FY 2009 through FY 2014, to $150 million in FY 2015 and FY 2016. Both bills require (in the House bill, the provision is in the accompanying non-binding but important report language) that $45 million of the $150 million go toward higher education and scholarship programs. Together with a planned allocation of $60 million for the Egyptian-American Enterprise Fund, this would leave relatively few resources for other development priorities.

The desire to shrink ESF reflects congressional and administration fatigue over the forty-year-old economic assistance program, which is often a source of friction with Egypt and has generated a sizeable pipeline of unspent funds from prior years. A Government Accountability Office (GAO) report released earlier this year found that from 2009 through 2014, USAID had spent only $370 million, or 26 percent, of the $1.4 billion in ESF appropriated by Congress during those years. The administration recently has taken steps to use some of the unspent funds. The backlog results from a combination of slow approval by the Egyptian government (with which the United States negotiates all assistance projects), US bureaucratic procedures, repeated shifts in the administration’s assistance plans for Egypt since 2011, and Egypt’s challenging operating environment.

Beyond these similarities, the bills differ in their requirements for the release of FMF and in their emphasis on democracy and human rights.

House Version

The House committee bill removes entirely the democracy certifications on FMF in existing law. Instead, the aid would be released after the Secretary of State makes the Peace Treaty and strategic cooperation certifications. The bill calls for the Secretary to submit a “governance report” to Congress every ninety days, but this is not required for the release of aid. Rather, it is a gesture to show that the Committee has not forgotten about human rights issues altogether. The report, which the bill says “may be provided in classified form if necessary” (presumably to avoid embarrassing Egypt), would simply describe the “steps being taken” by the Egyptian government to hold parliamentary elections, uphold the due process of law, and improve the transparency and accountability of security forces.

Concerning ESF, the House bill says funds “may” be made available for democracy programs, but specifies no amount. Congressional attitudes on democracy aid for Egypt have shifted greatly in recent years. For example, the FY 2008 appropriations law directed the administration to spend “not less than $20 million” on democracy programs.

The House bill, like current law, states that no criminal convictions handed to US citizens in Egypt’s 2013 NGO trial “will be considered a conviction for the purpose of US law.”  Sixteen Americans were among the forty-three NGO workers convicted in a trial that was part of the Egyptian government’s campaign against foreign funding of civil society programs. The US government considers the trial politicized and unfair.

The House committee report language stresses the priority of providing security assistance to Egypt. The report urges the Secretary of State “to take steps to enhance the military-to-military relationship with Egypt, including by expediting the delivery of equipment withheld since 2013.” It directs the Secretary of State, in coordination with the Secretary of Defense, to report on a timeline for the delivery of outstanding items. (This refers to weapons systems that the Obama administration had suspended in October 2013 in response to mass human rights violations; the White House lifted the suspension in March.)

Senate Version

Like current law, the Senate committee bill requires that the Secretary of State make several democracy certifications before certain FMF can be released. Similar to the FY 2014 and FY 2015 bills, FMF used for counterterrorism, border security, nonproliferation programs, and development programs in the Sinai Peninsula is exempt from these certifications.

The proposed new democracy conditions, tougher than what is in the existing law, would require that the Secretary certify that

  • “is protecting religious minorities and the rights of women,”
  • “is implementing reforms that protect freedoms of expression, association, and peaceful assembly
  • “has released all political prisoners and is providing detainees with due process of law” and
  • “is conducting credible investigations and prosecutions of the use of excessive force by security forces.”

These conditions, however, are probably just symbolic, because the Senate bill allows, like current law, the Secretary of State to waive the democracy certifications if he determines that doing so is in the interest of US national security. There is little indication that Egypt’s increasingly authoritarian government will take any of these steps; in the past, the administration has always chosen to use its waiver authority rather than give Egypt false credit for democratic reforms.

The Senate committee report emphasizes the need to apply the so-called Leahy Law, which prohibits the State and Defense Departments from providing security assistance to units of foreign security forces that commit gross human rights violations. This likely reflects the committee’s concerns about possible civilian casualties during the Egyptian military’s counterterrorism campaign in the Sinai Peninsula, where it is reportedly using FMF-purchased weapons such as F-16 fighter jets and Apache attack helicopters to attack militants in populated civilian areas. The report states that while the committee shares the Egyptian government’s “assessments regarding the threats posed by Islamic extremists in neighboring countries and the Sinai, it remains concerned with the status of democracy, human rights, and the rule of law in Egypt.”

In contrast to the House committee bill, the Senate version does not invalidate the NGO trial convictions, or refer to democracy assistance. It does require the administration to withhold from FY 2016 ESF the amount spent by the US government for legal fees in the NGO trial.  According to a 2014 GAO report, these fees were nearly $5 million.

Next Steps

Congress must take a number of steps by September 30 to complete the appropriations bills before the new fiscal year starts on October 1. Each full chamber will vote on the committees’ bills. Then a House-Senate conference of appropriators will resolve any differences between the two bills to create a final bill for each chamber to vote on for the president’s signature.

The major issue to watch for is how the Senate and House hammer out a common position on democracy conditions on FMF. Although the general mood in Congress these days is sympathetic to Egyptian president Abdel Fattah al-Sisi’s counterterrorism fight and to prioritizing security cooperation, a few influential legislators are concerned about the human rights situation. Overall, Egypt aid remains a complex and sensitive issue that does not divide neatly between chambers or along partisan lines.  

Amy Hawthorne is a senior fellow at the Rafik Hariri Center for the Middle East at the Atlantic Council.  Elissa Miller is a Program Assistant at the Hariri Center.