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(B) external threats to Egyptian stability 
are, in fact, minimal; 
(2) to provide non-military assistance to Egypt 
which results in actual, sustainable, and, to the extent 
possible, measurable outcomes in terms of economic 
growth, poverty reduction, humanitarian conditions, 
health, education, and political reform; 
(3) to restructure Egypt’s assistance package 
over time so as to diminish military assistance and 
end the reduction of economic assistance and to begin 
the process of this restructuring without delay; and 
(4) to ensure that this restructuring is done in 
such a manner that ensures that maintenance and 
spare parts for existing Egyptian military equipment 
is not jeopardized and that Egyptian military pur-
chases and projects to which the United States has al-
ready committed itself be funded fully in accordance 
with previous understandings. 
(c) AMENDMENT TO THE FOREIGN ASSISTANCE ACT 
OF 1961.—
(1) IN GENERAL.—Chapter 4 of part II of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2346 et 
seq; relating to the ‘‘Economic Support Fund’’) is 
amended by inserting after section 534 the following 
new section:
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‘‘SEC. 535. REQUIREMENTS RELATING TO ASSISTANCE FOR 
EGYPT. 
‘‘(a) REQUIREMENT
FOR
ASSISTANCE.—Assistance 
may be provided for Egypt under this chapter for a fiscal 
year only if Egypt provides to the United States for the 
fiscal year a proposal described in subsection (b) that is 
evaluated and approved in accordance with subsection (c). 
‘‘(b) PROPOSAL.—
‘‘(1) IN GENERAL.—A proposal described in this 
subsection is a proposal that reflects Egyptian prior-
ities to use assistance provided under this chapter to 
meet the requirements of paragraph (2). 
‘‘(2) REQUIREMENTS.—The requirements de-
scribed in this paragraph are—
‘‘(A) promoting economic growth (including 
economic freedom); 
‘‘(B) reducing poverty; 
‘‘(C) improving humanitarian conditions 
among the poorest individuals in Egypt; 
‘‘(D) improving education and health sys-
tems for the people of Egypt; 
‘‘(E) reducing corruption in the public and 
private sectors; and 
‘‘(F) strengthening democratic institutions 
and individual freedoms. 
‘‘(c) EVALUATION AND APPROVAL OF PROPOSAL.—
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‘‘(1) 
EVALUATION.—The 
President, 
acting 
through the Secretary of State, and in consultation 
with the Secretary of the Treasury, the United States 
Trade Representative, and the Administrator of the 
United States Agency for International Development, 
shall evaluate the proposal provided to the United 
States pursuant to subsection (a) to determine the ex-
tent to which the proposal meets the requirements of 
subparagraphs (A) through (F) of subsection (b)(2). 
‘‘(2) APPROVAL.—The President shall approve 
the proposal only if the President determines that—
‘‘(A) the proposal sufficiently meets the re-
quirements of subparagraphs (A) through (F) of 
subsection (b)(2) in a manner that achieves, in 
particular, lasting economic growth and poverty 
reduction and substantially strengthened demo-
cratic institutions and individual freedoms; and 
‘‘(B) the Government of Egypt—
‘‘(i) has adopted and implemented re-
forms necessary to implement the proposal; 
‘‘(ii) has implemented the proposal 
provided to the United States and approved 
for the prior fiscal year in accordance with 
the requirements of subparagraphs (A) 
through (F) of subsection (b)(2); and
210
‘‘(iii) has demonstrated high standards 
of fiduciary controls and accountability 
with respect to assistance provided for 
Egypt under this chapter. 
‘‘(d) SUSPENSION
AND TERMINATION
OF ASSIST-
ANCE.—The President, acting through the Secretary of 
State, may suspend or terminate assistance in whole or in 
part for Egypt under this chapter if the President deter-
mines that the Government of Egypt is not implementing 
the proposal in accordance with the requirements of sub-
paragraphs (A) through (F) of subsection (b)(2). 
‘‘(e) CASH ASSISTANCE.—
‘‘(1) 
REQUIREMENT.—Notwithstanding 
any 
other provision of this section, cash assistance may be 
provided to Egypt under this chapter for a fiscal year 
pursuant to the memorandum of understanding speci-
fied in paragraph (2) only if a proposal provided to 
the United States pursuant to subsection (a) for the 
fiscal year has been evaluated and approved in ac-
cordance with subsection (c). 
‘‘(2) MEMORANDUM
OF
UNDERSTANDING.—The 
memorandum of understanding specified in this 
paragraph is the memorandum of understanding 
agreed to by the Government of the United States and 
the Government of Egypt in March 2005, including
211
any modification to the memorandum of under-
standing, except—
‘‘(A) a modification to increase the amounts 
of assistance agreed to be provided under the 
memorandum of understanding; or 
‘‘(B) a modification to reduce significantly 
the scope of, or to extend significantly the time 
for, the performance by Egypt of obligations that 
it has undertaken under the memorandum of un-
derstanding. 
‘‘(f) CONGRESSIONAL NOTIFICATION.—Assistance may 
not be obligated for Egypt under this chapter until 30 days 
after the date on which the President has provided notice 
thereof to the Committee on International Relations and the 
Committee on Appropriations of the House of Representa-
tives and to the Committee on Foreign Relations and the 
Committee on Appropriations of the Senate in accordance 
with the procedures applicable to reprogramming notifica-
tions under section 634A(a) of this Act. 
‘‘(g) REPORT.—The President, acting through the Sec-
retary of State, shall prepare and transmit to the Com-
mittee on International Relations of the House of Rep-
resentatives and the Committee on Foreign Relations of the 
Senate a report for each fiscal year that contains—
212
‘‘(1) the proposal provided to the United States 
pursuant to subsection (a) for the fiscal year; and 
‘‘(2) the evaluation of the proposal carried out 
pursuant to subsection (c)(1). 
‘‘(h) RULE OF CONSTRUCTION.—The provisions of this 
section shall not be superseded except by a provision of law 
enacted after the date of the enactment of the Foreign Rela-
tions Authorization Act, Fiscal Years 2006 and 2007, which 
specifically repeals, modifies, or supersedes the provisions 
of this section.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall apply with respect to assistance 
for Egypt under chapter 4 of part II of the Foreign 
Assistance Act of 1961 for fiscal year 2007 and each 
subsequent fiscal year. 
(d) MILITARY
ASSISTANCE
LEVELS
FOR
EGYPT; 
TRANSFER REQUIREMENT.—The following amounts avail-
able for assistance for Egypt under section 23 of Arms Ex-
port Control Act (22 U.S.C. 2763; relating to the ‘‘Foreign 
Military Financing’’ program) shall be transferred to and 
consolidated with amounts available for assistance for 
Egypt under chapter 4 of part II of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2346 et seq.; relating to the ‘‘Eco-
nomic Support Fund’’):
213
(1) For fiscal year 2006, the amount that exceeds 
$1,260,000,000. 
(2) For fiscal year 2007, the amount that exceeds 
$1,220,000,000. 
(3) For fiscal year 2008, the amount that exceeds 
$1,180,000,000. 
(e) CASH-FLOW FINANCING FOR EGYPT.—As soon as 
practicable after the date of the enactment of this Act, the 
President shall modify the program of cash-flow financing 
for Egypt under section 23 of the Arms Export Control Act 
(22 U.S.C. 2763; relating to the ‘‘Foreign Military Financ-
ing’’ program) so as to accomplish the purposes of the pol-
icy set forth in paragraphs (3) and (4) of subsection (b) 
of this section. 
(f) TRANSFER OF CERTAIN INTEREST FOR EGYPT.—
For fiscal year 2006 and subsequent fiscal years, any inter-
est earned from amounts in an interest bearing account for 
Egypt to which funds made available under section 23 of 
the Arms Export Control Act (22 U.S.C. 2763; relating to 
the ‘‘Foreign Military Financing’’ program) are dis-
bursed—
(1) shall be transferred to and consolidated with 
amounts available for assistance for the Middle East 
Partnership Initiative under chapter 4 of part II of 
the Foreign Assistance Act of 1961 (22 U.S.C. 2346