Cutting off all U.S. aid to Pakistan would spell disaster for U.S. interests in the region. But sticking with the status quo -- ­­­providing generous assistance to a country with an increasingly defiant posture toward the U.S. -- also makes little sense.

The Obama administration’s announcement earlier this month that it planned to withhold $800 million in military aid to Pakistan sends a signal that the current state of affairs between the two countries is no longer sustainable. U.S. security assistance to Pakistan is legally conditioned on it meeting counterterrorism benchmarks, and we ought to hold firmly to the letter of the law.

The recent reduction in security assistance makes sense, especially in light of Pakistan’s expulsion of 150 U.S. and British military trainers from the country and reports about Pakistani officials alerting terrorists to U.S. information on bomb-making facilities in the tribal border areas.

But the United States must balance the need to demonstrate dissatisfaction with Pakistani actions with the goal of encouraging Pakistan to develop into a stable, moderate and economically vibrant country at peace with its neighbors. Strengthening Pakistan’s democratic institutions and civilian authorities offers the best chance to create a functional, mutually beneficial relationship. And the U.S. diminishes the chances of pushing the relationship in this direction if it only pursues punitive measures.

Abruptly stopping all aid would also come at a steep price. Pakistan could react by cutting off NATO supply lines that run through Pakistan to coalition troops in Afghanistan. In addition, it may expel U.S. intelligence officials, thus denying the U.S. access to valuable information that helps the CIA track terrorists.

The U.S. has a broader interest in maintaining steady relations with Pakistan and encouraging stability in the nuclear-armed nation of 180 million. If the U.S. were to cut all aid to Pakistan and prevail on the International Monetary Fund and World Bank to do the same, the Pakistani economy would teeter on the brink of collapse. The chances of Pakistan’s nuclear arsenal falling into terrorist hands, while currently remote, would increase.

The United States must carefully calibrate its large-scale aid programs to Pakistan in a way that helps shape its policies toward terrorism and at the same time assures the country of U.S. goodwill and interest in maintaining close ties over the long term. The strategy may not succeed, but it is worth a try.

Lisa Curtis is senior fellow at The Heritage Foundation.