A United States Senate committee has cut aid to Pakistan by $US33 million a year, in response to the jailing of a Pakistani doctor who helped the CIA track down Osama Bin Laden.
Doctor Shakil Afridi was sentenced to at least 33 years in prison for treason, for helping the Americans locate the Al-Qaeda leader in the town of Abbottabad.
The Senate Appropriations Committee has said it will cut US aid by $1m for each year of Shakil Afridi's sentence.
Secretary of State Hillary Clinton said his term was "unjust and unwarranted".
Dr Afridi was tried for treason under a tribal justice system for running a fake vaccination programme to gather information for US intelligence.
Bin Laden was killed by US forces in Abbottabad, Pakistan, in May 2011.
The BBC reports the move from the Senate panel follows earlier cuts to the White House's budget request for Pakistan. The cuts would be part of a bill that would send $1 billion in aid to Pakistan in the next financial year.
"We need Pakistan, Pakistan needs us, but we don't need Pakistan double-dealing and not seeing the justice in bringing Osama Bin Laden to an end," said Republican Senator Lindsey Graham, calling Pakistan "a schizophrenic ally".
Meanwhile Democratic Senator Patrick Leahy said: "It's Alice in Wonderland at best. If this is co-operation, I'd hate like hell to see opposition."