Claim of Egypt aid cut-off fuels confusion over Obama policy

Adding to the confusion over its Egypt policy, claims surfaced Tuesday that the Obama administration has decided to suspend aid to the military-backed government on a temporary basis -- though officials continued to insist publicly that such a decision was never made.

The Daily Beast first reported that, according to a U.S. senator and unnamed administration officials, the administration has temporarily suspended most of the $1.3 billion in military aid, as well as the delivery of weapons and economic aid amid a review of the financial support.

The office of Sen. Patrick Leahy, D-Vt., seemed to back up this claim. An aide to Leahy, in a statement to Fox News Radio, echoed what was reported in The Daily Beast -- that Leahy's subcommittee "was told that the transfer of military aid was stopped, that this is current practice, not necessarily official policy, and there is no indication of how long it will last."

But White House officials said Tuesday that no decisions have been made on whether to "cut or postpone" aid.

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Spokesman Josh Earnest said reports that suggest an aid cut-off are "not accurate." He confirmed that Obama planned to hold a Cabinet meeting Tuesday afternoon, though, to discuss Egypt aid.

Pentagon spokesman George Little also said "no changes have been decided."

"I am unaware of any de facto suspension of assistance. I don't know where that came from," he said of the reports of an aid cut-off.

However, if true, the move to temporarily suspend aid would be a significant step. To date, officials have said that aid is merely under review, and that they would not make a determination on whether the ouster of ex-President Mohammed Morsi qualifies as a coup -- because such a finding would, under U.S. law, require the administration to cut off aid.

The Daily Beast report indicates that the administration, for the short-term anyway, is treating the overthrow like a coup in all but name.

One administration official reportedly told the Daily Beast: "The decision was we're going to avoid saying it was a coup, but to stay on the safe side of the law, we are going to act as if the designation has been made for now. By not announcing the decision, it gives the administration the flexibility to reverse it."

The conflicting claims, and the possibility that the government has a distinct public and private approach to the crisis in Egypt, only add to the confusion over what the administration's policy actually is.

Violence exploded in Egypt, as the military and Muslim Brotherhood backers of Morsi clashed in the streets, while President Obama was on vacation in Martha's Vineyard. The president returned to find himself pulled in both directions by vocal members of Congress. Some, like Sen. John McCain, R-Ariz., say the administration should clearly label the ouster a coup and suspend aid. Others argue the administration, despite misgivings about the military's handling of the situation, should nevertheless sustain aid in order to prevent the Brotherhood from taking power.

Yet the White House and State Department, in public, say their policy of not making a determination on whether a coup had taken place has not changed.

"We have determined that it is not in the best interest of the United States to make that determination," White House spokesman Josh Earnest said Monday, adding that aid is under review.

State Department spokeswoman Jen Psaki said a separate New York Times report that said economic aid programs are on hold is incorrect.

She acknowledged that roughly $585 million in military aid has not yet been obligated.

"But it would be inaccurate to say that a policy decision has been made with respect to the remaining assistance funding," she said.

One senior Capitol Hill staffer explained to Fox News that the remaining money in the Egypt aid pot for this year "may not have been stopped yet, but we built in the ability to push it through fast or to slow the line down to get their attention. It's diplomacy."

The money expires if it is not spent by Oct. 1.