WASHINGTON — WASHINGTON (AP) — The U.S. decision to slash hundreds of millions of dollars in aid to Egypt will create new friction in Washington's already uneasy relations with the military-backed government that ousted the first democratically elected Egyptian president. And the consequences won't end there.
Whether the cuts are deep or symbolic, the move will anger Persian Gulf states, push Egypt to seek assistance from U.S. rivals and upend decades of close ties with the Egyptians that that have been a bulwark of stability in the Middle East
The U.S. has been considering such a move since July, when the Egyptian military ousted President Mohamed Morsi. Ensuing violence between authorities and Morsi supporters has killed hundreds. The scheduled Nov. 4 trial of Morsi on charges that he incited the killings of opponents while in office and the U.S. decision to cut its aid to Egypt threaten to add to the turmoil.
The planned cutoff of some, but not all, U.S. aid also underscores the strategic shifts underway in the region as U.S. allies in the Gulf forge ahead with policies at odds with Washington. Saudi Arabia and other Gulf states, including the United Arab Emirates and Qatar, are strong backers of Syrian rebel factions and were openly dismayed when the U.S. set aside possible military strikes against Bashar Assad's government. The Gulf states also feel increasingly sidelined as Washington reaches out to their rival, Iran.
Iran had moved quickly to heal long-strained ties with Egypt following Morsi's election but now is redirecting its policies with Egyptian leaders who don't share Tehran's agenda.
At midday Wednesday, White House spokesman Jay Carney said President Barack Obama "has been clear that we are not able to continue with business as usual. ... We will announce the future of our assistance relationship with Egypt once we have made the appropriate diplomatic and congressional notifications."
In Cairo, Gen. Abdel-Fattah el-Sissi, who led the military effort that ousted Morsi, described Egypt's relations with the United States as "strategic" and founded on mutual interests. But he said his country would not tolerate pressure, "whether through actions or hints." His comments were in an interview published Wednesday by the Cairo daily Al-Masry al-Youm.
U.S. aid to the Egyptians has a long history. Since the late 1970s, the country has been the second-largest recipient — after Israel — of U.S. bilateral foreign assistance, largely as a way to sustain the 1979 Egypt-Israeli peace treaty.
The United States gave Egypt $71.6 billion in assistance between 1948 and 2011, according to a Congressional Research Service report issued in June. That included $1.3 billion a year in military aid since 1987. The rest was economic assistance, some going to the government, some to other groups.
How much will the loss in U.S. aid matter?
Egypt has other allies who may be able to fill the financial void. In fact, Saudi Arabia and some of its Gulf Arab partners have provided a critical financial lifeline for Egypt's new government, pledging at least $12 billion so far and aiding in regional crackdowns on Morsi's Muslim Brotherhood. On Monday, Egypt's interim president, Adly Mansour, visited Saudi Arabia on his first foreign trip in a sign of the importance of the Gulf aid and political backing.
But Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies in Washington, said he isn't convinced that Saudi Arabia, for instance, is interested in providing the amount of long-term aid that Egypt has received from the United States for more than three decades. The Gulf states, generally, will express their disappointment over any cuts in U.S. aid to Egypt, he said.
"The Gulf states aren't happy because they think that not only has Egypt not done anything wrong, but that Egypt has done a lot of things right in snuffing out the early flames of political Islam," Alterman said. "They will feel that the U.S. in the interest of ... democracy is acting against its own concrete interests and the interests of its friends."
"Countries like China and probably Russia will likely see this as an opportunity to find new markets and to build a new relationship," he added.
A suspension of U.S. aid to Egypt, regardless of its size, also could feed the wave of nationalist sentiment gripping Egypt since the ouster of Morsi and boost the popularity of Egypt's military chief, el-Sissi, who has not ruled out a presidential run next year.
It will also resonate with Egyptians who believe that the United States was sorry to see Morsi go.
The aid decision is getting mixed reviews on Capitol Hill.
Rep. Eliot Engel, the top Democrat on the House Foreign Affairs Committee, criticized the Obama administration's expected announcement.
"The Egyptian military has handled the recent transition clumsily, but they have begun a democratic transition which will serve the Egyptian people well in the future and have also worked to maintain regional stability," Engel said in a statement. "During this fragile period we should be rebuilding partnerships in Egypt that enhance our bilateral relationship, not undermining them."
Others, including some sharp political opponents of Obama, supported the president's decision.
Sen. Rand Paul, R-Ky., whose bill to halt aid to Egypt was roundly defeated in the Senate in July, said he was happy to see the administration "finally thinking about following the law."
The administration has refrained from declaring that Morsi's removal amounted to a military coup, a designation that would have required the U.S. to suspend all but humanitarian assistance to Egypt. It did delay the delivery of some fighter planes, and as Egypt's military began a crackdown on Morsi supporters the president's advisers started to consider more muscular action. Obama canceled a joint military exercise and announced a new review of assistance.
President Barack Obama's top national security aides recommended the aid cutoff in late August, including all financing for Egypt's army except for money that supports security in the increasingly volatile Sinai Peninsula and along Egypt's border with the Gaza Strip, U.S. officials said. Counterterrorism funding may also continue.
Assistance that is used to pay American companies that sell Egypt military equipment would be suspended under those recommendation, but those firms would be compensated with payments that could amount to hundreds of millions of dollars, according to the officials.
Associated Press writers Matthew Lee in Brunei, Bradley Klapper in Washington, Brian Murphy in Dubai, United Arab Emirates, and Hamza Hendawi in Cairo contributed to this report.