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President Barack Obama has dramatically cut funds to promote democracy in Egypt, a shift that could affect everything from anti-corruption programs to the monitoring of elections.

Washington's cuts over the past year - amounting to around 50 percent - have drawn accusations that the Obama administration is easing off reform pressure on the autocratic government of Egyptian President Hosni Mubarak to ensure its support on Mideast policy, including the peace process with Israel.

"Obama wants change that won't make the Egyptian government angry," said Ahmed Samih, head of a Cairo-based organization that in 2005 used U.S. funds to monitor parliament elections. And in the Egyptian context, that means there will be no change.

In a statement, USAID - Washington's main international aid agency - said, the United States is committed to the promotion of democracy and human rights and the development of civil society in Egypt. It said the cuts came as Washington was drawing down nonmilitary aid to Egypt in general over recent years.

The administration has made similar cuts in democracy aid to Jordan, another U.S. ally.

The policy in part reflects a change in focus, with more development and economic aid to Afghanistan and Pakistan. It also reflects how Obama has moved away from his predecessor George W. Bush's aggressive push to democratize the regimes of the Middle East.

Egypt was the centerpiece of the Bush policy, straining U.S. ties with Mubarak - though by the end of the Bush administration, the American reform push had already seemed to fall by the wayside.

The democracy cuts for Egypt are of particular concern as the environment there becomes increasingly restricted - as evidenced by recent crackdowns against political activists, bloggers, and journalists, the U.S.-based democracy watchdog Freedom House said in a report released Friday.

Egypt has been one of the top recipients of U.S. foreign aid ever since it became the first Arab country to sign a peace accord with Israel, in 1979. The aid was as high as $2 billion a year in the past, including $1.3 billion in funds for Egypt's military. But since the Bush administration, Washington has been reducing the nonmilitary part of the package.

This year's aid, like last year's, is $1.55 billion, including $250 million in nonmilitary aid.

In 2008, the Bush administration dedicated around $45 million of that to programs for Governing Justly and Democratically. A portion directly funded non-governmental organizations - known as civil society groups - that carry out independent programs to promote human rights, hold the government accountable and promote reform.

For the 2009 budget, the Bush administration dedicated the same amount. But when it came to office, the Obama administration rearranged the funds, with only $20 million put to the democracy program, moving the difference to strictly economic projects, according to State Department reports to Congress. It has laid out slightly higher funds, $25 million, for the 2010 and 2011 fiscal years.

It has also imposed new rules barring USAID money to unregistered groups, both Egyptian and international. Many groups do not register with the Egyptian government because they fear pressure and interference.

USAID said funds from other American agencies continue to go to unregistered groups, and cited the constrained budget environment.

But the amount is reduced from $10 million in 2008 to around $2.6 million now, according to a report by the Project on Mideast Democracy, a Washington-based group that studied the budget.

Freedom House warned that the new rules are essentially giving the Egyptian Government veto power over who receives funding from USAID.

The changes come at a murky time for Egypt, the Arab world's most populous nation. Presidential elections are due in 2011, but the recent illness of the 81-year-old Mubarak has raised questions about whether he will run. Mubarak does not have a clear successor.

Past elections have been notorious for reports of widespread rigging to ensure ruling party victories.

Samih was unable to apply to USAID for funds to monitor upcoming parliamentary elections in November. He was also rejected for funds for another project - Radio Horytna (Our Freedom Radio), Egypt's first youth-run online radio station.

The Egyptian Center for Human Rights was turned down for $300,000 from USAID to monitor elections for parliament's upper house last year, said its director, Safwat Girgis. He turned to one of the American agencies authorized to fund unregistered groups, but was told it does not deal with election monitoring.

USAID also yanked funding for another project of Girgis' group to promote the rights of women and the disabled and communication between Egypt's Muslims and Christians through public workshops, he said.

The Egyptian government now appears to be moving to shut down unregistered groups.

A bill before Egypt's parliament would impose heavy punishments on these groups unless they apply to the state. Under the bill, the government can refuse registration for any NGO if security agencies do not approve. The state can also disband the board of directors of any registered nonprofit or pull its license.

Samih warned that if the legislation passes, he would have to shut down his Andalus Institute for Tolerance and Anti-violence Studies, which promotes democracy among youth and trains bloggers and new media writers.

Obama wants to democratize the region the way the leaders of the Arab countries want, not the way the Arab people want, Girgis said.