"We have no credibility. We do have influence, but when you don't use that influence, then you do not have that influence,” McCain said. "There is no policy, and there is no strategy. And therefore, we react and we react poorly."
The Arizona Republican, who traveled with Sen. Lindsey Graham, R-S.C., to Cairo earlier this month, called on the Obama administration to cut off the $1.3 billion in aid to Egypt, much of which ends up in the hands of the military.
McCain has repeatedly criticized the administration for its refusal to label the overthrow of former President Mohammed Morsi a coup, which would by law necessitate halting the aid, and urged a stronger stance.
From his vacation home on Martha's Vineyard last week, President Barack Obama announced the cancellation of upcoming biannual joint military exercises, but did not suspend the money.
McCain previously said cutting off aid would be a risk to Israel, and could disrupt any chance of the new regime to establish a democratic government.
But he made the argument that the possible side-effects are now outweighed by the risks posed by continued aid as violence continues in Cairo and more than 1,000 people have been killed.
“I also would point out that the Mubarak regime and this regime is stoking anti-Americanism to a large degree, and anti-Israel rhetoric is very high,” he said. “I believe that Israel can defend itself, although it may be of some cost to them, but look at the cost of American credibility."