	Overview: Changes in U.S. Funding for Palestinians

U.S. aid to the Palestinians has changed more dramatically in calendar year 2018 than at any time since 2007, when it was restructured to respond to the takeover of the Gaza Strip by the Sunni Islamist group Hamas (for more background, see Appendix A ). The Trump Administration has taken several steps to reduce U.S. funding for programs benefitting Palestinians. The President's statements suggest that the Administration may seek to persuade the Palestine Liberation Organization (PLO) to participate in U.S.-led diplomacy on the Israeli-Palestinian peace process (see " 2018 Administration Actions " below). PLO Chairman and Palestinian Authority (PA) President Mahmoud Abbas broke off diplomatic contacts with the Administration in December 2017 after President Trump recognized Jerusalem as Israel's capital and announced his intention to relocate the U.S. embassy there from Tel Aviv. Also in September, the Administration announced that it was ending all U.S. humanitarian contributions to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). influence. 115-141 ). In October, U.S. government officials clarified that they would have been legally required to withhold $165 million in FY2017 ESF even if the Administration had not reprogrammed the entire $231.542 million. Some reports have suggested that the Anti-Terrorism Clarification Act of 2018 (ATCA, P.L. Various statements from President Trump, as well as observations from other sources, suggest that U.S. actions on aid may seek to persuade the Palestinians to participate in U.S.-led diplomacy on the Israeli-Palestinian peace process. Reprogramming FY2017 Bilateral ESF

The Administration appears to have reprogrammed all FY2017 bilateral economic aid originally intended for the West Bank and Gaza. Changing the Israeli-Palestinian Conflict Management and Mitigation Program

Additionally, in September, executive and legislative branch sources disclosed the Administration's decision to bar Palestinians from participating in a Conflict Management and Mitigation program (CMM) funded by USAID and the U.S. embassy in Israel. These children are part of the future of the Middle East. It also appears to encourage greater PA security coordination with Israel. 2018 Legislation

		Taylor Force Act: No ESF That "Directly Benefits" the PA

Congress enacted the Taylor Force Act (Title X of P.L. The Taylor Force Act suspends all ESF aid that "directly benefits" the PA (with specific exceptions for the East Jerusalem Hospital Network and a certain amount for wastewater projects and vaccination programs) unless and until the Administration certifies that the PA and PLO
are taking credible steps to end acts of violence against Israeli citizens and U.S. citizens that are perpetrated or materially assisted by individuals under their jurisdictional control, such as the March 2016 attack that killed former U.S. Army officer Taylor Force, a veteran of the wars in Iraq and Afghanistan; have terminated payments for acts of terrorism against Israeli citizens and U.S. citizens to any individual, after being fairly tried, who has been imprisoned for such acts of terrorism and to any individual who died committing such acts of terrorism, including to a family member of such individuals; have revoked any law, decree, regulation, or document authorizing or implementing a system of compensation for imprisoned individuals that uses the sentence or period of incarceration of an individual imprisoned for an act of terrorism to determine the level of compensation paid, or have taken comparable action that has the effect of invalidating any such law, decree, regulation, or document; and are publicly condemning such acts of violence and are taking steps to investigate or are cooperating in investigations of such acts to bring the perpetrators to justice. Absent further congressional action, the ATCA might indirectly lead to a complete end to U.S. bilateral aid for the Palestinians and shutdown of the accompanying in-country activities of the U.S. Agency for International Development (USAID) and the U.S. Security Coordinator (USSC) for Israel and the Palestinian Authority. The Trump Administration may be pursuing efforts to have Congress change the ATCA to facilitate the continuation of security assistance, at least, with one media report suggesting that the White House belatedly realized the ATCA's possible impact. Background on U.S. Aid to the Palestinians
Overview
Significant bilateral U.S. aid to the Palestinians began when the Palestinians achieved limited self-rule in the West Bank and Gaza Strip in the mid-1990s. Bilateral aid to the Palestinians since 1994 has totaled more than $5 billion. Since then, much of the U.S. bilateral aid has gone toward security, economic development, self-governance, and humanitarian needs—with an emphasis on strengthening the West Bank-based, Fatah-led PA vis-à-vis Hamas. PA personnel in Gaza. PLO and Palestinian Broadcasting Corporation (PBC). Palestinian state. General Issues for Congress
Vetting of UNRWA Contributions 
Some Members of Congress have raised concerns that U.S. contributions to UNRWA might be used to support terrorists.
In calendar year 2018, the Trump Administration has significantly cut funding for the Palestinians during a time of tension in U.S.-Palestinian relations. Statements by President Trump suggest that the Administration may seek via these cuts to persuade the Palestine Liberation Organization (PLO) to participate in U.S.-led diplomacy on the Israeli-Palestinian peace process. Despite the funding cuts, PLO Chairman and Palestinian Authority (PA) President Mahmoud Abbas and other PLO/PA officials have not reversed their decision to break off diplomatic contacts with the United States, which came after President Trump's December 2017 recognition of Jerusalem as Israel's capital.
Various observers are debating what the Administration wants to accomplish via the U.S. funding cuts, and how compatible its actions are with U.S. interests. Some Members of Congress have objected to the cuts, including on the grounds that they could negatively affect a number of humanitarian outcomes, especially in Hamas-controlled Gaza. Some current and former Israeli security officials have reportedly voiced concerns about the effects of drastic U.S. cuts on regional stability.
Until this year, the U.S. government had consistently supported economic assistance to the Palestinians and humanitarian contributions to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), even if funding in some cases was reduced or delayed. Bilateral assistance to the Palestinians since 1994 has totaled more than $5 billion, and has been a key part of U.S. policy to encourage an Israeli-Palestinian peace process, improve life for West Bank and Gaza residents, and (since 2007) strengthen the West Bank-based PA vis-à-vis Hamas in Gaza. U.S. contributions to UNRWA through global humanitarian accounts since 1950 have totaled more than $6 billion.
The 2018 changes raise questions about the future of various funding streams and U.S. political influence, as well as the impact on other international actors' support of and influence on the Palestinians. Congress has options to determine types and amounts of funding for the Palestinians and to place conditions or oversight requirements on it.
The 2018 changes included
Reprogramming $231.532 million of FY2017 bilateral economic assistance that was originally intended for the West Bank and Gaza (including $25 million for East Jerusalem hospitals) for other purposes. Ending U.S. humanitarian contributions to UNRWA. U.S. funding in FY2018 totaled $65 million, contrasted with $359.3 million in FY2017. Deciding to prevent Palestinians from participating in a Conflict Management and Mitigation program (CMM) funded by USAID and the U.S. embassy in Israel. Programs involving Israelis and Palestinians generally receive $10 million annually. Nonlethal U.S. security assistance for the PA security forces has continued, as has PA security coordination with Israel, but a majority of Palestinians support recent PLO recommendations to end the coordination.
Legislation enacted in 2018 is also significantly impacting U.S. aid to the Palestinians. Congress enacted the Taylor Force Act (Title X of P.L. 115-141) in March. This law augmented existing legislative provisions to suspend U.S. bilateral economic assistance for the PA unless and until Palestinian officials cease certain payments deemed under U.S. law to be "for acts of terrorism." The Anti-Terrorism Clarification Act (ACTA, P.L. 115-253) became law in October, as an apparent way to ensure that the PLO and PA would be subject to jurisdiction in U.S. courts for past acts of Palestinian terrorism against U.S. citizens. Because the ATCA attempts to use U.S. aid to Palestinians as a means of establishing this jurisdiction, and Palestinian leaders apparently want to avoid that outcome, the ATCA might indirectly lead to a complete end of U.S. bilateral aid to the Palestinians by February 2019. The Trump Administration may not have realized the possible impact of the ATCA when it was enacted, and reportedly may be trying to have Congress change the ATCA to facilitate the continuation of security assistance, at least.