The US House of Representatives passed a bill on Thursday prohibiting further security assistance to Egypt, Lebanon and the Palestinian Authority and stipulating strict conditions for granting aid extensions to those countries, mostly related to Israel's security.
For Egypt, the US president has to certify that the government of Egypt is not directly or indirectly controlled by a foreign terrorist organisation; is fully implementing its peace treaty with Israel; and is actively destroying tunnels used to smuggle materials into Gaza.
The bill is far from binding as it was issued by the House's Committee on Foreign Affairs, which is not entitled to appropriate funds. Another House body, the Committe on Appropriations, is the only body inside the lower house that has the right to actually pass legislation for disbursing funds.
However, bills approved by the House of Representatives have political significance as they convey the House’s stands on different issues. Such bills gain more significance and will become binding if they are also approved by the Upper House of Congress, the Senate.
The Senate currently has a Democrat majority, while the House has a Republican majority.
This bill, entitled the Foreign Relations Authorization Act: Fiscal Year 2012, proposes to cut overall American foreign aid by US$6.4 billion.
It prohibits further security assistance to Lebanon until the US President certifies that no members of Hezbollah hold key positions in any governmental authority; the same restriction applies to the Palestinian Authority with members of Hamas.
The Palestinian Authority also has to continue dismantling the extremist infrastructure in Gaza and West Bank and to actively halt anti-Israel incitement, along with its recognition of Israel’s right to exist as a Jewish state.
The bill kept the US$3 billion annual military aid to Israel untouched, indicating the inclination of Congress’ lower house.
The Enterprise Support Fund
Another bill is currently being reviewed by the House to establish an "Enterprise Support Fund" to promote the strengthening of the private sector in Egypt and Tunisia.
The bill, which is entitled Egyptian-American Enterprise Fund Act, suggests establishing a fund similar to those established to support Eastern European democracies after the fall of the Berlin wall.
The bill has better chances of materialising, as a companion piece of legislation supporting the same fund and sponsored by Senators John Kerry, Joe Lieberman and John McCain, was approved by a panel in the US Senate. This bill has been scheduled for a vote in the Senate.
Also, the Enterprise Fund is supported by US President Barack Obama, who touched upon in it during his May 19 speech on the Middle East.
The two bills introducing the fund, however, have not specified the amount of funding pledged for it.
The congressional Budget Office has estimated that the fund would be financed with US$60 million for Egypt and US$20 million for Tunisia; a meagre amount compared to funds pledged earlier by the US President.
The US has been very keen on keeping its Egyptian interests secure. President Obama has often commented on developments in the Egyptian arena, dedicating an entire speech to the issue after the abdication of President Mubarak.
The House bill's main purpose is to “support a transition to democracy in Egypt that is successful, lasting, and reflective of the aspirations of the Egyptian people for greater economic opportunity and political freedom”.
Detailed objectives include securing funding for the private sector and providing it with technical assistance; particularly for small and medium size enterprises (SMEs).
It also cites promoting good corporate governance and transparency in Egypt, fostering competition and promoting job creation for the middle class as part of its purposes.
The bill claims serving US interests in Egypt includes securing an “orderly and peaceful transition to democracy in Egypt”. It explains that Egypt has an important role in “global and regional politics” and acts as an “intellectual, economic, and cultural centre of the Arab world".
In May 2011, Obama pledged US$2 billion of aid for Egypt; US$1billion as a debt swap and the other US$1 billion in loan guarantees.
Egypt, the second largest recipient of US in absolute terms, has received an average of US$2 billion annually since its signing of the Camp David accords in 1979. Out of this aid, more than 65 per cent or US$1.3 billion is directed towards the military; which plays an important role in shaping Egypt’s foreign policy.