By Patricia Zengerle WASHINGTON, Jan 14 (Reuters) - The U.S. Congress' new spending bill would restore more than $1.5 billion in military and economic aid to Egypt, which had been largely cut off after Egypt's military ousted President Mohamed Mursi last summer. The bill includes up to $1.3 billion in military assistance, and $250 million in economic support for Cairo, but ties the funding to the Egyptian government taking steps toward restoring democracy. The funds also would only be available if the U.S. Secretary of State certifies to congressional appropriations committees that the Cairo government is sustaining its strategic relationship with the United States and meeting its obligations under the 1979 Egypt-Israel peace treaty. The restoration of aid to Egypt could set a precedent for assistance to any country after a coup, despite differences of opinion between Mursi's supporters and Egypt's current government over what to call the military takeover. Supporters had argued that restoring the funding, but subjecting it to conditions, struck an appropriate balance between pushing Cairo to embrace democratic reforms and continuing the U.S. commitment to Egypt. "If the military continues its repressive tactics, arresting democracy activists and does not hold free and fair elections, the certifications will not be possible and U.S. aid will be cut off," Senator Patrick Leahy, chairman of the Senate subcommittee responsible for the aid, said in a speech on the chamber floor on Tuesday. COUP - OR NOT? President Barack Obama's administration announced on Oct. 9 - after authorities in Cairo used violence to put down protests - that it would withhold deliveries of tanks, fighter aircraft and other military equipment, as well as $250 million in cash aid, from Egypt's military-backed government until it made progress on democracy and human rights. The administration held off, however, from officially declaring events in Egypt a coup. The actions prompted many lawmakers to call for a change in U.S. policy, worried that Washington was threatening its close relationship with a country that has been an important ally in an unstable region. The restoration of aid has already prompted criticism. The Washington Post said in an editorial on Tuesday that Egypt's "bogus" democracy does not deserve U.S. aid, saying that certifications that Egypt is restoring democracy cannot be honestly made. "Nor would they be wise: The military's repressive methods cannot stabilize Egypt, much less address its severe economic and social problems," the newspaper wrote. Leahy and other leaders of the Senate and House of Representatives appropriations subcommittees responsible for the aid authorization said it imposes stricter conditions on Cairo than the Obama administration had asked for or were included in proposed legislation in the U.S. Senate. Backers of Mursi, Egypt's first freely elected president, say his removal was a coup, reversing the gains of a popular uprising that toppled autocrat Hosni Mubarak in 2011. The army rejects allegations from Mursi's Muslim Brotherhood that it deposed Mursi in a coup and says it was responding to the will of the people.