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Where U.S. aid to Egypt goes

August 20, 2013: 12:48 PM ET

In the photos and television footage of the military takeover in Egypt over the last few weeks, it's impossible not to notice how many of the weapons on the ground are U.S.-built. Humvees, armored personnel carriers -- protesters have certainly noticed the "made in the USA" stamps on tear gas canisters.

But this is actually the small stuff. For the last few decades the United States has given Egypt billions in aid -- $1.55 billion last year alone. Most of it -- $1.3 billion -- goes for military equipment, upkeep and training.

The money is deposited into an account at the Federal Reserve Bank of New York, which Egypt can access to make payments on long-term contracts it signs with defense companies. The U.S. government is a co-signer on the contracts, guaranteeing the payments will be made. If aid to Egypt is suspended, the U.S. government could still be responsible for the deals Egypt has made so far, according to a Congressional Research Service report.

Here are the most expensive items Egypt has sought over the last few years, according to a list maintained by the Department of Defense:

F-16 Fighter Jet Egypt

24 F-16 fighter aircraft
Year: 2009
Total cost: $3.2 billion

Lockheed Martin makes the F-16 for Egypt and 25 other counties. Most of Egypt's order, which was parred down to 20 planes, has been delivered. President Obama has temporarily halted the delivery of the remaining planes pending a "review." The remaining aid payments for 2013 are also under review. The next tranche of funding for Egypt's Federal Reserve account needs to be deposited by September 30 or else the funding authorization will expire, said a U.S. government official.

The F-16s are built at plants in Fort Worth, Texas, and Turkey. The Fort Worth plant employes 450 people, and there are concerns that cutting off aid to Egypt will cost U.S. jobs -- not only at the main assembly plants but at the dozens of companies that supply parts.

130820105456-m1-abrams-tank-614xa

125 kits for M-1 Abrams main battle tanks
Year: 2011
Total cost: $1.3 billion

Since the late-1980s Egypt has had a deal to co-produce the M-1. Parts for the tank -- or kits -- are made by General Dynamics at plants in Anniston, Ala., Tallahassee, Fla., Sterling Heights, Mich., Lima, Ohio, and Scranton, Penn. The parts are then shipped to Egypt and assembled at a plant outside Cairo.

Egypt has just over 1,000 M-1's so far, and plans to eventually have 1,200.

130820104539-apache-ah-64-helicopter-614xa

12 Apache attack helicopters
Year: 2009
Total cost: $820 million

130820105107-f-16-engine-614xa

156 new engines for the F-16
Year: 2009
Total cost: $750 million

130820105300-ch-47-chinook-transport-helicopter-614xa

6 Chinook transport helicopters
Year: 2009
Total cost: $308 million

Egypt receives about a quarter of all U.S. foreign military aid, according to the CRS report. (Israel gets the most -- nearly 60%). The money accounts for about a third of Egypt's overall defense budget, and pays for 80% of its new weapons systems.

U.S. lawmakers have long justified the aid as helping to preserve U.S. interests in the region. Egypt has agreed to not attack Israel, and to give U.S. ships preferential access to the Suez Canal.

It's also thought the aid gave the United States influence in the country. That calculation is one factor likely under review as the administration undergoes the complex task of figuring out if this aid is worthwhile, and what the ramifications are if it's suspended.

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About This Author
Steve Hargreaves
Steve Hargreaves
Senior Writer, CNNMoney

Steve Hargreaves is a senior writer covering economic, energy and environmental issues at CNNMoney. Previously, he worked out of Istanbul and Bangkok, and has been published in the Village Voice and the Australian Financial Review. He tweets at @HargreavesCNN

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