What You Need to Know About Egypt’s FY18 Appropriations

Amr Kotb, Advocacy and External Relations Manager
UPDATE, September 7, 2017

The Senate Subcommittee on State, Foreign Operations, and Related Programs released on September 6 a summary of its fiscal year 2018 appropriations bill. As reflected in the updated chart, the bill, which goes to full committee on September 7, has reduced Egypt’s foreign military financing (FMF) by $300 million to $1 billion, and increased the amount of FMF contingent on democracy and human rights conditions from 15 percent to 25 percent while maintaining a national security waiver. The summary of the bill and its markup in full committee on September 7 come just a little over two weeks after the decision by President Donald Trump’s administration to withhold $195 million in FY16 FMF, and reprogram $65.7 million in FY14 FMF and $30 million in FY16 Economic Support Funds (ESF). The Tahrir Institute for Middle East Policy (TIMEP) has issued a detailed and updated special briefing on these developments. As described in the post, the Senate has been consistently frustrated with Egypt’s assistance package, on account of both FMF and ESF’s effectiveness as well as Egypt’s intensified crackdown on human rights. As noted in TIMEP’s special briefing, the Trump administration’s decision, on the other hand, comes on the heels of an inconsistent policy toward Egypt and, more broadly, a strict review of foreign assistance programs. Regardless of the reasons underpinning their actions, the Senate and the administration seem to be on the same page, and given the Senate’s influence over the FY17 process, this could pave the way for an Omnibus that passes significant reductions to Egypt’s assistance package.

July 13, 2017

On July 12, 2017, the House of Representatives’ State, Foreign Operations, and Related Programs Subcommittee (SFOPS) released its Fiscal Year 2018 State and Foreign Operations Appropriations bill. The bill is the latest development in the FY18 SFOPS appropriations process, following the release of the federal budget on May 23, and a series of hearings across the Senate and the House where Secretary of State Rex Tillerson testified on the State Department’s budget. The above table places the bill’s allocations for Egypt’s Foreign Military Financing (FMF) and Economic Support Fund (ESF) numbers within the context of FY18 appropriations stages, with comparison to the same process in FY17.

With respect to Egypt, FY18’s appropriations process is following a similar trajectory to that of FY17. In FY17, then-President Barack Obama’s budget allocated the usual $1.3 billion in FMF (a number that has remained unchanged since 1987), and sought to remove language that withheld 15 percent of this sum on the basis of democracy and human rights conditions. The House followed the executive’s lead, but the Senate’s FY17 draft bill included the conditions, which ultimately found their way into the FY17 Omnibus signed on May 5, 2017. The Senate proved its might again with ESF, where it deviated from Obama and the House’s allocation of $150 million (consistent since FY15) and halved it to $75 million while adding a “Cooperation Determination Clause,” which makes funds reprogrammable to other countries should the Egyptian government interfere with their disbursement. The FY17 Omnibus not only brought Egypt’s ESF account to its lowest in decades at $112 million, but additionally included language on reprogramming funds as the Senate stipulated.

Once again in FY18 the executive and the House seem to be speaking the same language on FMF, agreeing to maintain it at $1.3 billion and eliminating democracy and human rights conditions. The primary difference comes with ESF, as the executive has brought it down to the Senate’s previously allocated $75 million. This may however have more to do with the Trump administration’s stated desire to cut economic and development assistance across the board, than the Senate’s frustration with the backlog of $500 to $700 million of previously appropriated funds that have not been obligated (with $460 million of this amount accumulating between 2009 and 2014). Regardless of the reasons, both have been pushed to the same conclusion, leaving the House with even less influence than the norm.

The Senate’s frustration with Egypt’s foreign assistance package has been mounting. An April hearing on U.S. assistance to Egypt unveiled bipartisan agreement among members of the Senate SFOPS subcommittee that Egypt’s FMF package could be better tailored to its security challenges, particularly the insurgency that the military continues to fight in North Sinai. Other members expressed concern over the wide range of human rights violations committed by the Egyptian armed forces and a crackdown on civil society that may be fueling extremism rather than curbing it.

While President Donald Trump’s close relationship with Egyptian President Abdel-Fattah El Sisi is likely good news for an Egyptian government hoping to keep FMF at $1.3 billion, Trump’s plans to drastically cut foreign assistance across the board, with a particular focus on economy and development resonates with the Senate’s ESF leanings for different reasons. Given its FY17 bill and rising bipartisan criticism, it is likely the Senate will vote to keep FMF at $1.3 billion with 15 percent conditions and bring ESF down to $75 million while maintaining the Omnibus’ stipulations on reprogramming.

TIMEP will continue to issue updates as Fiscal Year 2018 Appropriations developments continue to occur.

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