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Cutting Military Aid to Egypt Puts the U.S. in a Box

Naming the cause of Mursi’s ouster would force an end to U.S. aid
Opponents of Egypt's deposed President Mohamed Mursi burn pictures of U.S. President Barack Obama at a rally in Cairo on July 7
Opponents of Egypt's deposed President Mohamed Mursi burn pictures of U.S. President Barack Obama at a rally in Cairo on July 7Photograph by Hassan Ammar/AP Photo

In the weeks since Egypt’s military deposed President Mohamed Mursi on July 3, the Obama administration has struggled to find the right response—and the right words. President Obama has been careful not to label what happened a coup, in part because doing so would put an end to the $1.3 billion in military aid the U.S. gives Egypt each year. (Washington cannot give aid to countries whose elected head of state is ousted by the military.) On July 25, the administration declared that the U.S. is not legally required to determine if Mursi’s ouster counts as a coup, which conveniently allows aid to keep flowing to one of the few allies in the region. But in a decision that acknowledges the chaos and violence in Egypt—Mursi remains in military custody and at least 72 protesters were reported killed during riots on July 27—the Pentagon is delaying the long-planned delivery of four F-16 fighter jets to the Egyptian military.

There’s growing pressure from some in Congress to reduce or eliminate the flow of military hardware from the U.S. to Egypt. That wouldn’t be easy, or cheap. The aid doesn’t go directly to Egypt. Instead, the Pentagon signs contracts with U.S. companies to deliver equipment the Egyptians request. As a result, the U.S., not Egypt, is liable for unpaid funds if a contract is broken. The four delayed F-16s are part of a $2.5 billion deal signed with Lockheed Martin in 2010 to deliver a total of 20 planes by December 2014. Lockheed says that through June 30 it had delivered 14 of them. According to data compiled by Bloomberg, the U.S. has yet to pay $1.7 billion of the contract. Were the U.S. to cut aid to Egypt, it would have to negotiate a termination penalty with Lockheed, reimbursing the company for costs it incurred plus reasonable profit. The Pentagon won’t say how much that would come to.