If Mubarak decides to resign, it will be due to a range of factors outside the immediate control of the White House—e.g., whether Mubarak’s inner circle abandons him, or whether the military somehow manages to convince him to leave (perhaps even by force), etc. Phone calls from an ally alone (as important as that may be) are not going to get him to leave, if they have not already done so. The $1.3 billion aid figure mentioned is military assistance. Now is not the time to slash military aid which, however one thinks of the strategic value of funding the Egyptian army, police and paramilitaries in light of what we have been witnessing in Tahrir Square, has provided benefits in the form of counter-terrorism support and Gaza border control.
The same, apparently, cannot be said for the approximately $6 billion that Egypt has received in U.S. economic aid over the last 10 years—mostly in the form of budget support, and without very strict conditions. It is possible that tightening economic aid may be a more viable response. But note that many aid commitments to Egypt were probably made in previous years so we are really talking about suspending disbursements of already-committed funds.
So let’s be clear what this means: it means that fewer classrooms will be added, fewer hospitals renovated, fewer infrastructure and utility services expanded, fewer loans made to small and medium-sized enterprises, and all the things that rely on U.S. aid will be similarly affected. It does suggest, however, that U.S. foreign assistance (and, for that matter, aid from other donors)—whether to the Middle East or other countries—should be granted in ways that create strong incentives for recipients to make progress on curbing corruption and improving governance, rather than simply to allow regimes to give out public goodies so they can remain in power.
Finally, “faulty intelligence” cannot be blamed for this. In Egypt, at least, the warning signs that Mubarak was coming to the end of his tenure—whether voluntarily or involuntarily—have been there for some time. If anything is to be faulted, it is that we did not prepare adequately for this eventuality by, e.g., reaching out to a wide range of opposition figures, encouraging and supporting organizational efforts of these groups, and in initiating the dialogue concerning “peaceful transitions” with Mubarak long ago.