Psaki: We Did Recently Obligate The Remaining FY 2013 FMF To Egypt

State Department Press Secretary Jen Psaki was asked if the Foreign Military Financing for Egypt in fiscal year 2013 could still be released even with a government shutdown going on. Psaki revealed that, "we did recently obligate the remaining FY 2013" to Egypt, and claimed "the president still has flexibility here."

Psaki was unable to answer how much of the  1.1 billion dollars in FMF to Egypt was spent calming, "some of that is harder to track."

Below is a transcript of the exchange:

Q: Very quickly -- (off mic) -- Foreign Military Financing cut off by the shutdown?

MS. PSAKI: I do have a little bit on that too I can tell you about. One moment. So I mentioned, of course, the status of our programs. But there are some broader financing programs, to your point, Josh, that could be impacted, because in the absence of a CR, we have no FY 2014 Foreign Military Financing, IMET programs and peacekeeping operations funds to obligate, so hence the challenge. So the processing -- as well as the processing of foreign military sales, which will continue, but the pace may be slowed over time because of furloughs in the military service. So those are of course some of the impacts, broadly, on where we stand with our budgetary challenges in Congress.

Q: So the Egypt FMF -- that was still 2013 money?

MS. PSAKI: That is exactly right. But we don't have a 2014 CR at this point, so --

Q: Can the Egypt money that's on hold -- just one second.

Q: Yeah, yeah.

Q: The Egypt money that's on hold, that's still under review? That could still be released even during the shutdown?

MS. PSAKI: Well, the --

Q: The review's ongoing, right?

MS. PSAKI: The review is ongoing.

Q: But right now it's not going?

MS. PSAKI: Of course, the end of the fiscal year was yesterday, so we did recently obligate the remaining FY 2013, which would expire on September 13th unless obligated. However, it is still -- it is -- we still -- the president still has flexibility here. We still have the ability to control kind of how this is used. So --

Q: Can you explain that? So you gave them the 585 --

MS. PSAKI: We don't -- it doesn't go to the Egyptian government. It was obligated because yesterday was the end of the fiscal year. But this --

Q: It's more than a week ago. It's more than a week ago.

Q: So --

MS. PSAKI: Let me just -- let me must finish, Josh. The type of obligation does not result in funds being put under contract. So this is funds -- this is funds that -- it doesn't mean -- we still maintain control over how FMF and other assistance will be spent. It's just that we had to obligate the money because of the end of the fiscal year yesterday.

Q: So you're obligating it to whom?

MS. PSAKI: Well, it goes to -- let's see, I believe I actually have something on this.

Q: Could I pop my question here?

MS. PSAKI: Sure, go ahead.

Q: It's my understanding --

Q: Sorry, can I have the answer to my question before you --

Q: Yeah, absolutely. It's a related thing, so if you don't mind, I'm going to say it, unless you --

MS. PSAKI: We'll continue. We'll continue here. Go ahead, Arshad. We'll -- we're not finishing, Josh. Go ahead.

Q: The way that it was explained to me was the need to obligate it had no effect on what you might ultimately do with the money because those decisions had not yet been made and that in fact, you needed to obligate the money in part so that if you wanted to terminate assistance, you would have money available to pay for the terminations costs.

MS. PSAKI: For the windup. That's exactly right.

Q: OK.

MS. PSAKI: But no decision has been made about that. It still is under review. It typically goes to a federal account, but it's not there yet. And it -- either way, we still would approve purchases.

Q: The federal account being the Egyptian government's bank account in New York.

MS. PSAKI: Well, it's a -- it's an account that we control and we approve purchases for.

Q: I see.

Q: (Off mic) -- New York Federal Reserve?

MS. PSAKI: My understanding is it's not there yet.

Q: Right, but it's going to get there.

MS. PSAKI: Well, that would be the next step, but it's not there yet.

Q: How much is it?

MS. PSAKI: It was 584.

Q: 584 -- and that's the remaining amount from the federal -- from FY 2013?

MS. PSAKI: Right. And as we've talked about before in the last couple of months, broadly speaking, if a decision were to be made about funding that would impact it, there would be windup spending that would need to be used because of programs or obligations being part of the way through. So --

Q: So the remainder of what must have been around 500 million (dollars) or $600 million was spent or --

MS. PSAKI: Well, that was money -- you mean the --

Q: Because the total sum is about 1.1 billion --

MS. PSAKI: It's a little higher than that, but that was previously obligated before. This was the chunk that was left over. In terms of how much of that has been actually spent, I'd have to check on that. Some of that is harder to track, but --

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