U.S. faces dilemma over aid to Egypt amid deadly violence

Calls for U.S. to stop financial aid to Egypt... 02:03

(CBS News) WASHINGTON - The violence is taking place in Egypt. The aid debate is taking place at home. And on Sunday, there were new calls to reassess the American relationship with an increasingly fragile nation.

With nearly 900 killed in five days of clashes with the Egyptian military, the calls to end the flow of U.S. money are getting louder.

South Carolina Sen. Lindsey Graham believes Egypt is looking more and more like a failed state.

South Carolina Sen. Lindsey Graham is among those calling for the suspension of American aid to Egypt following deadly clashes in that country. CBS News

"We're gonna have to suspend our aid, because we can't support the reaction of the military," he said on CBS' "Face the Nation" Sunday.

Historically the U.S. has been a major sponsor of the Egyptian military. Of the $1.5 billion in aid the U.S. sends Egypt yearly, $1.3 billion is for the country's security forces.

It was the military that ousted the elected president, Mohammed Morsi, and is shooting the president's supporters.

Middle East analyst Mohsin Khan said even if U.S. aid is suspended it will have little effect.

"Egypt needs something close to $15-$20 billion to get by," he said. "$1.3 billion is not that much. They are going to get a lot more from the Arab countries."

For decades, the U.S. has relied on Egypt's military to stabilize the Middle East. But the White House faces a dilemma -- preserving the relationship, but at what cost?

Of the $1.5 billion that goes from the U.S. to Egypt, $1.3 billion goes to the country's security forces. It was the military the ousted President Morsi. CBS News

"We deplore violence against civilians," said President Obama on Thursday. He cancelled joint military exercises with Egypt and vowed more punitive action if the violence continues.

Egypt's military leaders dig in despite deaths
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It is an approach Democratic Sen. Richard Blumenthal said he supports.

"Looking forward, I think that the approach has to be to condition our future aid on specific steps toward the rule of law and return to democracy," Blumenthal said.

But critics of the administration's strategy believe the White House's options are limited. Arizona Sen. John McCain said the Obama administration has lost credibility.

"We have to comply with the law," said McCain. "And this administration did not do that after threatening to do so."

Meanwhile, the president returns from his vacation Sunday evening. And increasingly there are concerns the lines of communication between Egypt's military leaders and U.S. officials are breaking down.