This is a rush transcript from "Special Report," March 4, 2013. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
SEC. JOHN KERRY, STATE DEPARTMENT: It is paramount, essential, urgent, that the Egyptian economy gets stronger. That it get back on its feet. There has to be a sense of security and there has to be a sense of economic and political viability.
(END VIDEO CLIP)
BRET BAIER, ANCHOR: Secretary Kerry on his trip in Cairo, meeting with Egyptian President Mohamed Morsi. His Islamist government run by the Muslim Brotherhood. And Kerry had this statement about some specific dollars.
"Today we are launching the Egyptian-American Enterprise Fund, with the install of $60 million in U.S. government capital now, rising to $300 million in the coming years as we work with our Congress on funding this and other programs…And in light of Egypt's extreme needs and President Morsi's assurance that he plans to complete the IMF process, today I advised him the United States will now provide the first $190 million of our pledged $450 million in budget support funds in a good-faith effort to spur reform and help the Egyptian people at this difficult time."
We're back with the panel. Steve, a lot of people here look at this and then look at the U.S. and its difficult time.
STEVE HAYES, WEEKLY STANDARD: Yeah.
BAIER: And, you know, put the two together.
HAYES: Yes. Those are entirely legitimate questions as we just are coming off this big fight over the sequester and the president complaining about the cutting of funding for things that don't even amount to that total. I think that the central question is her, is our aid to Egypt doing more harm than good at this point? And as somebody who's been critical of the administration for a long time for disengaging, particularly in the region, I think it's a -- it's a hard question.
But if you look of the way that the Morsi government is behaving, with its enabling of Salafist groups, it's making common cause with jihadist even beyond the Muslim Brotherhood which is already a bad group, the fact that they won't give us access to Muhammad Jamal al Kashef, who's one of the lead – the ringleaders of the attack in Benghazi, trained many of the attackers in Benghazi. They just won't give us access to him.
And here we are shoveling money at Egypt. I think it's a big question right now and at the very least we should condition our money on real political reforms and do in a way that's measurable. I mean, this is a problem with the U.S. policy vis-a-vis Egypt going back into the Bush administration and before. That the aid that we're giving is not measurable, it's not quantifiable, and we're not -- we're not judging outcomes in the way that we ought to be.
So if we're going to provide any aid at all, which is a serious question, we at the very least should be evaluating it in a proper way.
BAIER: Mara, Morsi has said some very explosive things. And it's not decades ago. This is from almost exactly three years ago.
(BEGIN VIDEO CLIP)
PRES. MOHAMED MORSI, EGYPT (Through Translator): Dear brothers, we must not forget to nurse our children and grandchildren on hatred toward those Zionist and Jews, and all those who support them.
(END VIDEO CLIP)
BAIER: You know, so he's got, you know, a history here. And while the U.S. and the State Department talk about the importance of the relationship between Egypt and the giant, broad implication in the Middle East, yeah, you look at the funding and you look at all of this. Thoughts?
MARA LIASSON, NATIONAL PUBLIC RADIO: Well, you know, the United States is faced, as Steve said, with a difficult dilemma. If it pulls out aid because we don't like what he said in the past and we're not so crazy about how he's moving forward or moving backward on reforms, then you perhaps have Egypt turning completely and utterly anti-American.
We have don't want that. We want to somehow nudge this post-Mubarak Egypt into a more Democratic pro-Western channel. And making aid contingent on reforms would seem to me the -- be the way to go and I think many in Congress want it to be that way.
BAIER: Charles?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: But if you are going to engage, and I think that we have to, the mistake, I think, the administration is doing is having the engagement and the money and the support hinge on economic reform and not on political reform. The economic reform, as Kerry said, you know, he had to urge the Egyptians to actually go ahead and to request the money from the IMF. That isn't exactly an economic reform. I don't see why it's a concession to us.
But the economy in and of itself is not a U.S. interest. The only U.S. interest is in the nature of this government. It's a government that won the election but narrowly. It's suppressing journalists. It's suppressing the opposition. The opposition is boycotting the upcoming elections as a result of the fact that it's being suppressed. And we ought to be demanding political concessions as a reward for any kind of money. And not economic concessions.
It's an elementary idea and I don't understand why the administration doesn't see it. It's our leverage. We have to use it. You don't want to lose Egypt. You don't want to disengage but you don't give them a free hand to do anything they want. And simply say well, he was elected. So I have to accept everything he does.
BAIER: There are -- you know, there are increasing numbers of people out there who look at our financial system -- our financial situation and say foreign aid should be among the first things that we look at off the top because they say, especially the countries that don't like us particularly, we should look at that first. There are many arguments on both sides of that. Your thoughts?
KRAUTHAMMER: Look, I believe in that and if you have a country that's resolutely anti-American I wouldn't give them a penny. But Egypt is in play. It's got a government that has a history or a regime that has a history of being anti-American, anti-Israeli, anti-Semitic, et cetera. But it isn't a fait accompli. Egypt still is a side that could go either way. Elections are coming. It has a very strong opposition that was out there on the streets. Again, it came a close second in the election. So I wouldn't concede it. I would support it but only on condition.
(CROSSTALK)
HAYES: The question is, is the opposition strong? And can it be strengthened? And the opposition is making sounds that it doesn't want to take our aid in any case. So I think it's a difficult situation.
BAIER: Well, chief Washington correspondent James Rosen will be talking with Secretary of State John Kerry tomorrow. You can see that interview here on "Special Report." 6:00 p.m. et. James Rosen has been on this trip all the way. And we expect to see that interview tomorrow night.
That is it for the panel. But stay tuned to see behind the scenes of a very secret selection process.
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