A growing number of US officials are warning that Egypt’s insistence on prosecuting at least 16 Americans in a crackdown on pro-democracy organizations will have drastic consequences.

As the diplomatic crisis escalates, the looming threat is that the US will cut off its $1.3 billion per year in military assistance to Egypt, which has flowed every year since 1987 as unofficial compensation for Egypt’s peace treaty with Israel.  

Yet despite the warnings, Egypt has refused to back down, instead escalating the crisis at every turn. It's unclear whether Egypt sees the US threats as serious. But some say that the military rulers may see the domestic gains to be made in establishing Egypt's independence from the US, which supported former President Hosni Mubarak for decades, as outweighing the benefits of the aid.