Officials: US moves to keep future Egypt aid money

The Obama administration moved to ensure it does not lose more than $500 million in potential Egypt aid as it weighs suspending assistance after this summer's coup, US officials and congressional aides said.

In a notification to Congress, the State Department outlined its intention to spend the money. But left unclear in the procedural step was how it would use the funds, with officials still mulling whether to punish Egypt's military by withholding economic and military assistance.

Under that approach, much of the cash would be used to compensate American companies for "wind up" costs to help them end assistance programs.

Halting aid to Egypt would be a dramatic shift for an administration that has declined to label the ouster of Egyptian President Mohamed Morsi on July 3 a coup and argued it was in US national security interests to keep American support flowing. It would also likely have profound implications following decades of close US-Egyptian ties that have served as a bulwark of security and stability in the Middle East.

President Barack Obama's top national security aides have recommended suspending much of the money, US officials have said. That would include all foreign military funding except money that supports security in the increasingly volatile Sinai Peninsula and along Egypt's border with the Gaza Strip.

The recommendation has been with Obama since late August, but officials said yesterday they do not expect him to make a decision while Syria's crisis over chemical weapons use is commanding so much time and energy.

The officials spoke on condition of anonymity because they weren't authorized to speak publicly on the matter.

The US provides Egypt with about USD 1.5 billion a year, mostly military aid.

But with only 10 days left in the fiscal year and a third of the money still undefined, the administration was nearing a deadline to declare its intention to use the money. It has a longer period of time to provide Congress more detailed plans. Egypt's coup has divided members of both parties in Congress. Some say aid should be cut off. Others contend the money is critical for U.S. And Israeli security.