[Senate Hearing 115-705]
[From the U.S. Government Publishing Office]


                                                     S. Hrg. 115-705

                             CONSIDERATION OF 
                          THE TAYLOR FORCE ACT

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION
                               __________

                              JULY 12, 2017

                               __________


       Printed for the use of the Committee on Foreign Relations

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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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                 COMMITTEE ON FOREIGN RELATIONS        

                BOB CORKER, Tennessee, Chairman        
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 ROBERT MENENDEZ, New Jersey
RON JOHNSON, Wisconsin               JEANNE SHAHEEN, New Hampshire
JEFF FLAKE, Arizona                  CHRISTOPHER A. COONS, Delaware
CORY GARDNER, Colorado               TOM UDALL, New Mexico
TODD, YOUNG, Indiana                 CHRISTOPHER MURPHY, Connecticut
JOHN BARRASSO, Wyoming               TIM KAINE, Virginia
JOHNNY ISAKSON, Georgia              EDWARD J. MARKEY, Massachusetts
ROB PORTMAN, Ohio                    JEFF MERKLEY, Oregon
RAND PAUL, Kentucky                  CORY A. BOOKER, New Jersey
                  Todd Womack, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        



                              (ii)        


                           C O N T E N T S

                              ----------                              
                                                                   Page

Corker, Hon. Bob, U.S. Senator from Tennessee....................     1


Graham, Hon. Lindsey, U.S. Senator from South Carolina...........     1


Cardin, Hon. Benjamin L., U.S. Senator from Maryland.............     4


Abrams, Hon. Elliott, Senior Fellow for Middle Eastern Studies, 
  Council on Foreign Relations, Washington, DC...................     6

    Prepared statement...........................................     7


Shapiro, Hon. Daniel B., Distinguished Visiting Fellow, The 
  Institute for National Security Studies, Tel Aviv, Israel......     9

    Prepared statement...........................................    12


                             (iii)        

 
                 CONSIDERATION OF THE TAYLOR FORCE ACT

                              ----------                              


                        WEDNESDAY, JULY 12, 2017

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:04 a.m., in 
Room SD-419, Dirksen Senate Office Building, Hon. Bob Corker, 
chairman of the committee, presiding.
    Present: Senators Corker, Risch, Rubio, Johnson, Gardner, 
Young, Paul, Cardin, Menendez, Shaheen, Coons, Murphy, Kaine, 
Markey, Merkley, and Booker.
    Also Present: Lindsey Graham.

             OPENING STATEMENT OF HON. BOB CORKER, 
                  U.S. SENATOR FROM TENNESSEE

    The Chairman. The Foreign Relations Committee will come to 
order.
    We had planned to have a very brief business meeting, but 
we need a quorum to do so, so I would suggest we start the 
hearing, if that is okay. That business meeting should take 
about 12 seconds.
    So why do not the witnesses go ahead and step up?
    Out of extreme respect for the Senator from South Carolina, 
who wants to say a few words at the opening, Senator Cardin and 
I will refrain from making our comments until you do so.
    We thank you so much for being here to introduce Taylor 
Force's dad. Also, we thank you for your leadership on bringing 
forth legislation to deal with this most difficult issue.
    So thank you so much for being here. The floor is yours. 
Take as long as you would like to say whatever it is you wish. 
We know it will be very brief.
    Senator Cardin. I just want to join the chairman in extreme 
respect for the Senator from South Carolina.

               STATEMENT OF HON. LINDSEY GRAHAM, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator Graham. And you want to amend: Don't take as long 
as you would like.
    I will not take very long, and I like the fact that you 
invited me here and allowed me to do this.
    We are confirming the FBI Director. We are having a hearing 
about his confirmation, so I have to run back.
    But I wanted to be here because Stuart has become a really 
good friend. Stuart Force is the father of Taylor Force. His 
mother, Robbi, could not be here. She is sick. His sister, 
Kristen, is watching the committee. And all of them appreciate 
this committee.
    I do not know how you all do it, but you are working 
together in a bipartisan fashion to produce substantive 
legislation. Hats off to this committee, the chairman, and 
ranking member.
    The Taylor Force Act. Who is Taylor Force? His father can 
tell you better than I can, but I think he represents 
everything good about our country. If you had a son, you would 
be proud to call him your son.
    He was 29 years old when he was killed. He was a graduate 
of West Point in 2009. He served a tour of duty in Iraq and 
Afghanistan as a field artillery officer.
    He had just gotten out of the military. He was going to 
Vanderbilt to study in a graduate school program in Israel 
studying entrepreneurship. He was with his colleagues, enjoying 
a night out in Jaffa at a restaurant. He walked outside, and he 
was stabbed to death by a Palestinian terrorist.
    It is a pretty short summary of a well-lived life.
    And his death has to matter. It has to mean something. And 
this committee and Congress has the chance to make sure it 
means something.
    The Forces are South Carolina residents, Stuart and Robbi. 
I do not know how things happen the way they do, but the fact 
that they live in my state has been a blessing to me, because I 
get a chance, with your help, to do something about the death 
of their son. That is what I enjoy so much about the Senate.
    The man who killed Taylor Force was Bashar Massalha. He 
stabbed him to death, and he stabbed others at the dinner. He 
was shot to death by the Israeli police.
    Fatah celebrated the murder of Taylor Force and other 
victims of the attack, praising him as a historic martyr. It 
named him and two other terrorist attackers as the pride of all 
the young Palestinians and urged future terrorists to go on 
killing in their name.
    The Taylor Force Act is to stop a practice that I find 
reprehensible, which is the payment by the Palestinian 
Authority to people like Mr. Massalha, who will kill innocent 
people and get rewarded for it by their government.
    So this law, which you understand very well, will stop 
American payments to the Palestinian Authority unless they stop 
paying their kids to kill other people.
    Taylor Force is not Jewish. He is not Israeli. He was an 
American at the wrong place at the wrong time.
    So here is what Abbas said last week, the President of the 
Palestinian Authority. ``Even if I will have to leave my 
position,'' he declared this week, which is last week, in 
response to U.S. and Israel pressure, ``I will not compromise 
on the salary of a martyr or a prisoner.''
    So that is his position. I have no animosity against the 
Palestinian people. I wish them to have an independent state, 
living peacefully side-by-side with Israel, and the dignity 
that comes from charting your own destiny. But I insist that 
they stop paying their young people to become terrorists. And I 
do not want our tax dollars used to support any government that 
would do that.
    It has to hurt for Stuart and Robbi to know that the taxes 
that they pay go to a Palestinian Authority who rewards the 
killer of their son.
    There is no good explanation for this, and this committee 
has an opportunity to send a signal to Mr. Abbas and everyone 
else that this position of the Palestinian Authority, Mr. 
Chairman and Ranking Member, is inconsistent with the two-state 
solution, is inconsistent with peace, and we need to stop our 
emboldening of this practice.
    I have been working on this for a year. This committee is 
making some changes to the law that I think are very 
constructive. I look forward to working with the committee to 
make more changes, if necessary, to get a strong vote.
    But I want Mr. Abbas to know our displeasure. I want the 
Palestinian people to understand that we will stand with them 
in search for a peaceful solution, but we will not empower them 
to kill people like Taylor Force.
    Thank you very much.
    The Chairman. Thank you. I do not know if anything could 
have been better said. I think it lends tremendous momentum to 
this effort. We thank you for introducing this legislation.
    Obviously, having the relationship that you have with Mr. 
Force and the family, and working with us, I thank you. I know 
we had a conversation last night late. We have had a couple 
meetings with you and Matt, and I think we are getting to a 
place where we can have an overwhelming bill to do exactly what 
it is you just said.
    So thank you so much. I know you have other business. But, 
again, you are welcome here any time. We thank you for your 
leadership on this issue.
    Thank you so much.
    With that, I would like to adjourn the hearing briefly. 
[Recess.]
    The Chairman. We will re-begin the hearing. We have some 
outstanding witnesses today. Thank you for bearing with us.
    I would like to again recognize Taylor Forces father, Mr. 
Stuart Force, who has been in our office and who is with us 
today. I know your wife was unable to be here but has been here 
on many occasions.
    Taylor, a West Point graduate, a veteran of the wars in 
Iraq and Afghanistan, and an MBA student at Vanderbilt 
University, was killed over a year ago by a Palestinian 
terrorist while in Tel Aviv studying entrepreneurship.
    Mr. Force, again, thank you for being here. Thank you for 
the work you have done in the hope that other parents will not 
have to suffer the grief that you and your wife share. We are 
deeply sorry for your loss.
    Again, I want to thank Senator Graham for his work, and I 
think he stated well, and I do not need to restate, the reason 
for this legislation and why we are having this hearing today.
    The Palestinian Authority as a government has created a 
system in law that pays Palestinian prisoners in Israeli jails 
more money the longer their sentence.
    I read an affidavit that shared testimony by prisoners. It 
made it clear that they attempted to commit crimes that were 
more heinous in order to serve more time so that they would get 
more money for their family.
    The laws do not stop there. Depending on the length of the 
sentence, the PA will pay for tuition, health care, and even 
offer government positions to these prisoners.
    For example, if you are a Palestinian sentenced to 2 years 
in Israel jail for committing violence or acts of terrorism, 
you get paid $400 a month. If you get sentenced to 30 years, 
you get $3,500 a month. If you serve 5 years or more and are 
released, you get a lifetime salary.
    Rather than welfare, this is a Palestinian Authority-
sponsored program that incentivizes terrorism.
    The problem we face is that the Palestinian Authority and 
the Palestinian people also benefit from U.S. economic 
assistance, assistance that has helped millions of people and 
has long been supported by the Israeli Government.
    But assistance is money, and money is fungible. And 
although we do not provide direct budgetary assistance to the 
PA, we do pay their debts. We also pay for a range of projects 
that the PA would otherwise fund themselves. That money frees 
up resources that are being used to incentivize terrorism.
    The PA has an easy option to stop compensating terrorists 
and their families. I believe they have not taken that path, 
because, from the Palestinian perspective, these payments 
recognize an individual's commitment to resistance. But when a 
government recognizes terrorism as a valid form of political 
resistance, how can they possibly be ready for peace?
    So we face a fairly basic question: Should U.S. taxpayers 
support a government that incentivizes terrorism? I believe the 
answer is no.
    Understanding how we effectively eliminate financial 
support for the PA by tailoring our assistance is a little 
harder. We are going to have testimony to that end today.
    I hope our witnesses can help us consider different options 
to ensure assistance that goes directly to the Palestinian 
people does not also benefit their government.
    So again, I want to thank Mr. Force, Senator Graham, and 
our outstanding witnesses for being with us today. I look 
forward to your testimony and responses to questions.
    With that, my friend, the ranking member, Senator Cardin.

             STATEMENT OF HON. BENJAMIN L. CARDIN, 
                   U.S. SENATOR FROM MARYLAND

    Senator Cardin. Mr. Chairman, thank you for convening this 
hearing. Thank you for your opening statement, which I 
completely concur in.
    I want to thank Senator Graham for his passion on this 
issue. And I concur in his statement.
    To Mr. Force, our deepest condolences. Your son served this 
Nation with great distinction. It is a tragedy that we all 
share. We know, as a father, how it hits you the rest of your 
life.
    The brutal death at the hands of terrorists while your son 
was studying in Israel is unacceptable. And we will take 
action.
    The Palestinian system of prisoner and terrorist payment 
must end--must end. It is an incitement to violence.
    President Trump helped convene a meeting in Saudi Arabia to 
stop the financing of terrorism. Well, what the Palestinian 
Authority is doing is financing terrorism. That must end. And 
the United States must use every opportunity to bring that to 
an end.
    I agree with the chairman. The U.S. economic assistance to 
the Palestinian people is very important. It helps provide 
economic stability and deals with humanitarian needs.
    I remember many years ago meeting with the former Prime 
Minister Peres in Israel as he talked about his vision of 
Israel security with two peoples living side-by-side in peace, 
the Palestinians and the Israelis. And he talked about a key 
ingredient being the economic future for the Palestinian 
people, and that the United States needs to be engaged with 
Israel in making that a reality.
    That is part of the future for the Palestinians and the 
Israelis. We understand that. We get that.
    So Congress in the past has taken steps to make sure that 
our programs, that much of the funds go directly to Israeli 
creditors, much of the funds go directly to Israeli ministries 
that do work in the Palestinian area.
    But the chairman is absolutely right. Monies are fungible, 
and we have to use every opportunity we can to make it clear to 
Mr. Abbas that we are not going to be supporting directly, 
indirectly, or any sort of way these payments that go to 
prisoners and terrorists. We must make it clear that families 
of terrorists are not to be rewarded for their terrorist 
activities in their families. That must end.
    So I agree, Mr. Chairman, we must use every opportunity we 
can to make this a reality that the United States moves forward 
in ending these payments.
    And I also agree with you, we have two very, very 
distinguished witnesses with us, two individuals who have 
served this Nation with great distinction, who understand the 
Middle East and are students of these issues and can help us.
    I do want to express one disappointment, if I might. It 
would have been nice to have an administration witness here, so 
that we could get the views of the administration on this 
important subject. I hope that opportunity will present itself 
as we work our way through legislation, which I also hope will 
receive overwhelming support from our colleagues.
    The Chairman. I will say, not having the administration 
involved does allow us to move the legislation much more 
quickly. [Laughter.]
    The Chairman. So there is a plus. I would not be 
complaining too much.
    Our first witness is the Hon. Elliott Abrams from the 
Council on Foreign Relations. Mr. Abrams previously served as 
Deputy National Security Adviser to President Bush.
    We all respect and admire you, and thank you for being 
here.
    Our second witness is the Hon. Dan Shapiro from the 
Institute for National Security Studies. Mr. Shapiro previous 
served as our Ambassador to Israel.
    We, again, thank you and respect you and appreciate you 
being here.
    With that, if you all would just begin in the order 
introduced? I know you have been here many, many times. If you 
could take about 5 minutes to summarize, we would appreciate 
it. Then we will look forward to questions.
    Go ahead, sir.

  STATEMENT OF HON. ELLIOTT ABRAMS, SENIOR FELLOW FOR MIDDLE 
 EASTERN STUDIES, COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC

    Mr. Abrams. Thank you very much, Mr. Chairman, members of 
the committee. Thank you for the honor of inviting me here 
today.
    What is the problem that led to the introduction of this 
act and to this hearing? The murder of Taylor Force and the 
Palestinian practice of making payments to individuals 
convicted of acts of terror, or their families and survivors, 
in accordance with the severity of their acts.
    The predictable effect is to reward and incentivize acts of 
terror. The length of sentences reflects, of course, the 
gravity of the crimes committed. So the more harm you do, the 
more money you and your family get.
    These are not welfare payments. I had hoped that, in the 
face of this controversy, the prospect of reducing American 
assistance, the Palestinian leadership under President Abbas 
would adopt a system of welfare payments. That would be 
payments based on the number of dependents, the number of 
children, for example. I think a system like that would be 
acceptable to us. Prisoners in the United States, no matter how 
terrible their crimes, do not find that their families are 
ineligible for Medicaid or welfare payments or food stamps.
    But the Palestinian leadership thus far has rejected that 
approach, so that escape route from this problem is not open.
    Cutting all the funds but allowing a 100 percent national 
security waiver, I think, achieves almost nothing. You would be 
handing the problem to the executive. You would get 100 percent 
waiver, probably. And you would not have any impact on this 
practice of paying terrorists for their acts.
    The idea of looking the other way because Palestinians will 
suffer from the aid cut, think again. It just ignores the 
problem.
    This notion that, well, we cannot do this because there 
will be disorder in the West Bank or the Palestinian Authority 
would collapse, I think it is a reasonable concern, but it is 
not going to happen. They have a $4 billion GDP. They get money 
from tax revenues that are turned over to them. There are other 
foreign aid donors. They are not going to collapse.
    So all these concerns do not outweigh the logic behind the 
Taylor Force Act. As long as the Palestinian Authority is, in 
effect, rewarding terror, we need to make our views, our 
repugnance, known. That means the assistance program has to 
reflect it.
    How? Since the Hamas victory, USAID has divided our aid 
into two categories, aid to the PA, aid to other recipients, 
like NGOs, municipalities. And I do think that aid that goes to 
the PA should now stop.
    There may be some good programs there, but money is 
fungible, as you both have said, Mr. Chairman, Senator Cardin. 
So those payments have to stop now.
    That would cut the assistance maybe in half. But there is a 
context here.
    You have tremendous pressure on the foreign aid budget. 
There are a lot of ways that foreign assistance could be used 
for excellent programs elsewhere.
    Why not cut every cent right now, today? It would have 
greater impact, but I think that would directly affect programs 
that benefit people unrelated to the Palestinian Authority and 
those payments for terrorism.
    I think by cutting off the direct payments now, you would 
be sending a very clear message to the Palestinian leadership 
that this is intolerable, and the other aid is going to be cut 
off at some point in the future unless they address this 
problem. And it gives them a little bit of a chance to do that, 
or one can hope that, once this legislation is passed, they 
will do that.
    There is one other issue I would like to just mention, and 
that is, some of this money actually goes to Augusta Victoria 
Hospital in Jerusalem, an excellent, venerable institution in 
Jerusalem started by the Lutheran Church. And I do think that I 
would make an exception for that. I would not, I think, cut 
that institution off right away.
    I do not think we should be under the illusion that we are 
going to solve this problem overnight. We have heard President 
Abbas say he was not going to change this. But I think that 
once this legislation passes, they may change their minds.
    And even if they do not, I think this legislation has to be 
passed. We have to be sure, as you have said and as Senator 
Graham said, that aid money does not even indirectly sustain 
the current system. I would say that is a matter of principle 
whether the Palestinians like it or, frankly, whether the 
Israelis like it. It is our assistance money.
    I wish we had done this years ago, including the time I 
served in government. We may have had the excuse then we were 
not all clear on the facts and the implications and the 
reverberations, and they are complex. But the moral point is 
crystal clear, and now is the time to act.
    Thank you for permitting me to testify today.
    [Mr. Abrams's prepared statement follows:]


                  Prepared Statement of Elliott Abrams

    Mr. Chairman and members of the committee, thank you for the honor 
of appearing before you today to discuss the Taylor Force Act.
    Since the establishment of the Palestinian Authority in the 1990s, 
U.S. assistance has totaled more than $5 billion. In recent years, aid 
from the Economic Support Fund (ESF) has amounted to over $300 million 
per year. Those figures do not count assistance we give through the 
United Nations agency UNRWA, which is now approaching $6 billion since 
that organization's founding. The United States is the largest donor to 
Palestinians, year after year.\1\
---------------------------------------------------------------------------
    \1\ U.S. Library of Congress, Congressional Research Service, U.S. 
Foreign Aid to the Palestinians, by Jim Zanotti, RS22967 (2016), 2.
---------------------------------------------------------------------------
    What's the problem that led to introduction of the Act, and leads 
to this hearing? It is the Palestinian practice of making payments to 
individuals convicted of acts of terror, and their families or 
survivors, in accordance with the severity of their acts and the length 
of their sentences. The predictable effect of this practice is to 
reward and incentivize acts of terror.
    The Council on Foreign Relations takes no institutional positions 
on policy issues and has no affiliation with the U.S. government. All 
statements of fact and expressions of opinion contained herein are the 
sole responsibility of the author.
    The length of sentences of course reflects the gravity of the 
crimes that have been committed. Accordingly, the more harm you do, the 
more money you and your family get. There are cases of unemployed and 
desperate men who commit acts of terror in order to get these 
payments--which can amount to a permanent government salary. 
Inevitably, the Palestinian government and society are by this scheme 
glorifying and honoring acts of violence, no matter how depraved. They 
are rewarding terror. There's no way around that conclusion. And it 
does not really matter whether the payments are formally made by the 
Palestinian Authority or the PLO.
    Nor, I would add, does it matter what the original intention of 
these practices was. I have heard it argued that the original goal was 
just to assist prisoners while in prison and take care of their 
dependents, and to assist them in readjusting and reintegrating after 
serving their sentences. But when you give assistance in accordance 
with the severity of the crime committed, the effect is unavoidable: to 
incentivize and reward acts of terror.
    These are not welfare payments. I had hoped that, in the face of 
this controversy and the prospect of a reduction in American 
assistance, the Palestinian leadership under President Abbas would 
adopt a system of welfare payments. That is, payments to prisoners, 
families, and survivors would be based on the number of dependents--the 
number of individuals being helped. Such a system would be acceptable 
to us, I think, and here in the United States we understand that the 
families of prisoners in our correctional institutions must be eligible 
for general assistance-welfare, Medicaid, food stamps, and so on. But 
the Palestinian leadership appears to have rejected that approach. And 
according to the most recent poll I have seen, so do the Palestinian 
people (although of course the exact question asked may have affected 
the outcome).\2\
---------------------------------------------------------------------------
    \2\ ``Public Opinion Poll No. 64,'' Palestinian Center for Policy 
and Survey Research, July 5, 2017.
---------------------------------------------------------------------------
    So that escape route from our problem is not open. Another proposed 
escape route is to cut all funds but allow a national security 
waiver.\3\ I oppose that suggestion, because it achieves almost 
nothing. Congress would be handing the problem to the administration 
without actually having any impact on the Palestinian practice of 
paying terrorists for their acts.
---------------------------------------------------------------------------
    \3\ Daniel Shapiro and Ilan Goldenberg, ``For U.S. Aid to the 
Palestinians, Don't Use a Sledgehammer When a Scalpel Would Do,'' 
Foreign Policy, June 29, 2017.
---------------------------------------------------------------------------
    There are other suggestions. Some argue that we should simply look 
the other way and allow this to continue because many Palestinians 
would suffer from cuts in U.S. assistance. In Israel, there has long 
been a concern that cuts in aid to the Palestinians would lead to 
disorder in the West Bank or even the collapse of the Palestinian 
Authority.
    These are all reasonable concerns, but in my view they do not 
outweigh the logic behind the Taylor Force Act: as long as the 
Palestinian government is in effect rewarding terror, we need to be 
sure we make our objections--our condemnation--known, and that cannot 
be merely in words. Our assistance program must reflect our feeling of 
repugnance.
    How do we do that? Since the Hamas victory in legislative elections 
in 2006, USAID has distinguished between assistance to the Palestinian 
Authority and aid to other recipients, such as NGOs and municipalities. 
In my view, all the payments that give assistance to or directly 
benefit the PA itself should be stopped. Some of those payments no 
doubt support good programs and worthwhile goals, but money is 
fungible. So the payments must stop. I believe this would cut our 
assistance roughly in half, but there is a context here. Considering 
the very great pressure on the foreign assistance budget right now, how 
could we justify continuing all these programs and payments to the 
Palestinians, while they continue to use money to reward terror? Surely 
the money can be better spent elsewhere. Moreover, these huge expenses 
on prisoners who have committed acts of terror are not the only example 
of PA financial mismanagement. A poll taken last year found that 95.5% 
of Palestinians think the PA is corrupt, and that was the highest rate 
ever.\4\ Given the amounts of U.S. assistance, the whole issue of PA 
financial management and mismanagement should get a good deal more 
attention.
---------------------------------------------------------------------------
    \4\ Karin Laub and Mohammed Daraghmeh, ``In Tough Times, Most 
Palestinians View Government as Corrupt,'' Associated Press, May 24, 
2016.
---------------------------------------------------------------------------
    Why not cut every cent right now? That step would have a greater 
impact, to be sure, but might directly affect people or programs 
unrelated to the Palestinian Authority and its payments for terrorism. 
The Taylor Force Act would, in any event, require a determination that 
the PA is taking credible steps to end acts of violence by individuals 
under its jurisdictional control. I do not see how that certification 
could be made if the PA continues to pay for terror. Moreover, cutting 
payments in half, or thereabouts, would show the Palestinian leadership 
that Congress is serious about ending aid unless this intolerable 
situation is changed. That would make it more likely that the issue 
might be addressed. If it is not, you can come back in three or six or 
nine months and cut some more, or cut everything. Ideally, during such 
a period there could be discussions between the PA, Israel, and 
American officials, and the scaled payments that reward greater acts of 
violence and terror could be eliminated. If not, the Palestinians will 
in any event have been warned what is coming.
    I want to deal with one other issue, which is that about $75 
million in aid is paid to cover debts owed directly to suppliers of 
power (which is most of the $75 million) and to hospitals, reducing 
amounts owed to them by the Palestinian Authority. Cut those payments, 
it is said, and you just hurt the suppliers of power and of medical 
care. I would make an exception for those hospitals, which account for 
perhaps a fourth of the $75 million in debt reduction payments. In 
fact, by far the largest part of the medical payment is to Augusta 
Victoria Hospital in Jerusalem, and I would not wish to see it cut off.
    Power is different. There our money does not support a renowned and 
venerable institution like Augusta Victoria. In fact, for obvious 
reasons it encourages a kind of corruption. There are cases where 
commercial users of power in the West Bank simply do not pay their 
power bills, because everyone knows the Americans will cover the bills 
from our aid budget and send checks to the Israeli companies. The 
current system really encourages irresponsible behavior. We all watch 
our power consumption in our homes and businesses because we pay the 
bills. But we now underwrite a system for the West Bank where the 
United States pays the bills, not the users, and that's not smart--and 
not worth continuing in the context of the Taylor Force Act, the need 
to confront Palestinian rewards for acts of terror, and the competition 
for scarce U.S. assistance dollars.
    Mr. Chairman, we should not be under the illusion that passage of 
this legislation and a large cut in aid to the Palestinians will 
immediately solve this problem. We should not expect that the 
Palestinian leadership will quickly react by ending their rewards for 
terrorism. We can hope that they will address this issue, and in 
negotiations with Israel and the United States come to an agreement-but 
that may very well not happen. I think you should pass this legislation 
nonetheless. We need to send a clear message to the Palestinian people 
and leadership that we find the current system unacceptable and in fact 
repugnant. We need to be sure that our aid money does not even 
indirectly sustain that system. We should do this as a matter of 
principle--frankly, whether the Palestinians like it or not, and 
whether the Israelis like it or not.
    I wish we had done it years ago, including the time I served in 
government. We all may have had the excuse then that we weren't exactly 
clear about the facts, and indeed the facts and implications and 
reverberations are complex. But the moral point is crystal clear, and 
now is the time to act.
    Thank you for permitting me to testify today.


    The Chairman. Thank you so much.
    Ambassador?

  STATEMENT OF HON. DANIEL B. SHAPIRO, DISTINGUISHED VISITING 
FELLOW, THE INSTITUTE FOR NATIONAL SECURITY STUDIES, TEL AVIV, 
                             ISRAEL

    Ambassador Shapiro.  Mr. Chairman, Ranking Member Cardin, 
members of the committee, thank you also for the opportunity to 
appear. I know we submitted a written statement, which I hope 
will be made a part of the record.
    I want to begin by expressing my strong support for the 
goals of this legislation, as Senator Graham has outlined them, 
and you have reiterated.
    And I want to also add my condolences to Mr. Force and the 
Force family. Taylor Force was murdered about a mile from where 
I was taking part in a meeting between Vice President Biden and 
former Israeli President Peres at the time. His death is an 
outrage and pains me deeply, as it has ever since it occurred.
    Among other forms of incitement that we in the Obama 
administration raised repeatedly with the Palestinian Authority 
was this indefensible practice of providing payments to 
Palestinians in prison for terrorist attacks and to their 
families. It helps fuel waves of terrorist attacks that 
Israelis and, of course, also Americans like Taylor have 
suffered from. And, indeed, the way the payments are structured 
does incentivize worse crimes by providing greater payments for 
longer sentences.
    It is an abominable practice. President Abbas' defense of 
it is indefensible, and it needs to stop.
    So I commend Senator Graham and the committee for the 
taking the lead on this legislation designed to bring about an 
end to those abhorrent payments, and I think it would be a 
fitting tribute to the life and service of Taylor Force.
    My colleague on the panel, Elliott Abrams, has written 
about the need to change Palestinian political culture, so that 
it ends the glorification and encouragement of violence that 
occurs. That is a very worthy goal.
    And so I think the question before us, as you all consider 
exactly how to craft the legislation, is, what is the most 
effective means of pursuing that goal, and how can it be 
pursued without harming other U.S. and Israeli interests or the 
well-being of innocent Palestinians?
    A related question is, what is the value of the leverage of 
our assistance programs? Indeed, since fiscal year 2015, 
Congress and the Obama administration have already made 
reductions on the basis of these payments, leading to a 
reduction of the overall assistance program from about $400 
million to about $260 million.
    Unfortunately, it has not had the desired goal of 
persuading President Abbas to change the policy. Now, it is 
possible that a total cutoff of Economic Support Funds would do 
that. It is also possible it would lead him to dig in his 
heels. I do not know.
    I think the moral point is very clear. Direct funds, 
because of fungibility, mean that we have an obligation either 
way.
    But there is a question about the leverage, how much we can 
use legislation like this to leverage the change we seek. It 
may be that the threat of it has greater leverage than the 
actual cutoff itself.
    It is also worth bearing in mind the value and the purpose 
of our overall assistance program, since the legislation, as 
currently drafted, would cut the entire ESF budget for the West 
Bank and Gaza. Much of that assistance is in the form of 
projects that support investments in the West Bank economy, 
which improve the quality-of-life for Palestinians and help 
generate private sector activity, which helps keep the West 
Bank stable. While that is, of course, in the Palestinians' 
interests, it may be even more in Israel's interests.
    I say that because of the strong support that these 
projects receive from the Israeli Government and the IDF 
leadership. Every project is coordinated carefully with COGAT, 
the Israeli Coordinator for Government Activities in the 
Territories. All of its implementation is carried out under 
their rigorous oversight.
    The reason is that stability in the West Bank serves 
Israeli security interests by dampening the atmosphere in which 
more Palestinians might be drawn to extremism. At least, that 
is how the Israeli officials I worked with as Ambassador 
explained it to me. They even extended that logic to the 
solvency of the PA itself, which is not going to be affected by 
this legislation, but it could be affected by Israel's own 
measures.
    So despite years of complaints, justified ones, about 
Palestinian incitement, the Israeli Government, to this point, 
has not cut off the steps it takes to ensure that the 
Palestinian economy remains viable and that the Palestinian 
Authority remains functional, such as the transfer of the 
customs revenue it collects on the PA's behalf.
    Now, the Israeli Government can speak for itself, and there 
is legislation in the Knesset that is advancing that may touch 
on that issue, and obviously, they will convey their own views 
to the administration and Congress. All I would add to that 
discussion is that, until I left government service about 6 
months ago, the Israeli officers charged with maintaining 
security and stability in the West Bank were very clear with me 
that they did not welcome a sustained reduction of that type of 
project assistance, to maintain stability in the West Bank.
    Our assistance programs are also consistent with goals laid 
out by the Trump administration, as it has undertaken its 
initial forays into Middle East peacemaking. The President and 
his team have spoken consistently about the need for improved 
economic conditions for Palestinians in the West Bank. Those 
are high priority under any scenario, even as they also 
correctly seek to bring an end to Palestinian incitement and 
payments to prisoners.
    The legislation also will touch our humanitarian assistance 
programs in Gaza, which are also strongly supported by the 
Israeli authorities. After every round of conflict in Gaza, the 
Israeli Government has strongly supported a surge of U.S. 
assistance to provide aid and assistance to thousands of 
homeless Palestinians in Gaza, including many children. And the 
United States has always responded with bipartisan support.
    So the legislation should advance. It should be targeted to 
prevent the use of any funds, even through fungible means, of 
paying terrorists. But let me just offer a few ideas for the 
committee's consideration.
    One is forms of flexibility. The administration will, in 
its time, provide its own views on the legislation, but some 
form of flexibility in implementation, whether it is a national 
security interest waiver for some or part, all or part of the 
cutoff, could provide the administration the ability to apply 
the tool with greater precision, and to respond to either a 
breakthrough in talks or to a crisis, such as another conflict 
in Gaza.
    Additional targeting rather than the current draft of the 
bill, which covers all of ESF for the West Bank and Gaza, and I 
think Elliott Abrams and I are in close agreement that the 
money going directly into PA coffers, such as for--or to cover 
their debts to electricity companies, may be a better way to 
target the cutoff.
    Another option would be to set the funds aside in an 
account, perhaps interest-bearing, perhaps not, but to make 
clear the money is available once the changes to the 
Palestinian legal codes are made.
    Or set a date certain by which time the cut will take 
effect, if the legal changes do not occur. Create a limited 
window of time and a clear incentive for the Palestinian 
Authority to make these changes.
    Fourth, there are other forms of assistance that perhaps 
the ESF money could be applied to that do not in any way 
benefit the Palestinian Authority but may advance some of our 
goals.
    One is the Conflict Management and Mitigation program. For 
the last 9 years, Congress has provided $10 million for grants 
to NGOs that do people-to-people programs between Israelis and 
Palestinians, and between different groups within those 
societies. They are very impactful in breaking down barriers 
and building bridges. Perhaps more ESF funds could be applied 
to those programs.
    And the second is perhaps redirect ESF funds to a program 
designed to boost the Palestinian high-tech sector. Here, I 
refer the committee to an article in the current issue of 
Foreign Affairs magazine by Yadin Kaufmann. It is called, 
``Start-Up Palestinian: How to Spark a West Bank Tech Boom.''
    The idea would be to provide grants to Palestinian startups 
paired with established U.S. partner companies for R&D costs. 
And it is modeled on the U.S.-Israel BIRD Foundation, the 
Binational Israel Research and Development Foundation.
    The Palestinian high-tech sector is a very moderate, very 
productive sector of society, not infected, that we know of, by 
terrorism.
    The last is to use other tools besides assistance, such as 
diplomatic leverage. The Palestinian leadership, I think, in 
many ways is more sensitive to its international reputation 
than to suspensions of aid. So Ambassador Haley, who has been 
very outspoken at the United Nations, should raise this issue 
in the Security Council. European and Arab governments should 
be lobbied to raise the same concerns about prisoner payments 
in Ramallah, so that the Palestinians are hearing a chorus of 
calls for change, not just American voices. The Quartet is a 
valuable vehicle to communicate those messages. And there is an 
upcoming meeting in September of the Ad Hoc Liaison Committee, 
the group of donors where this issue should be raised, and 
other donors should be encouraged to establish their 
expectations for an end to Palestinian payments to terrorists 
in prison.
    I know the committee has always found bipartisan solutions 
to these types of problems, so I encourage you and commend you 
for taking up this issue and finding a way to stop these 
payments to terrorists while protecting other U.S. and Israeli 
interests, and supporting the Trump administration's peace 
efforts.
    Thank you very much, Mr. Chairman.
    [Ambassador Shapiro's prepared statement follows:]


                Prepared Statement of Daniel B. Shapiro

    Mr. Chairman, Ranking Member Cardin, members of the committee, 
thank you for the opportunity to appear before you to discuss the 
Taylor Force Act.
    I want to begin by expressing my strong support for the goals of 
this legislation, and relate to the American hero for whom it is named.
    On March 8, 2016, I was participating in a meeting between Vice 
President Biden and former Israeli President Shimon Peres at the Peres 
Center for Peace in Jaffa. During the course of the meeting, we heard 
the sounds of sirens and were informed about a terrorist attack nearby. 
It was at that very moment that Taylor Force was murdered by a 
Palestinian terrorist less than a mile from where we were meeting on 
the Jaffa boardwalk.
    As the U.S. Ambassador to Israel, I always made the safety of 
American citizens my highest priority, and I know Vice President Biden 
did the same. There had been other American victims of terrorism during 
my tenure, and we always did everything we could to ease the burden on 
the grieving families. As we learned more about Taylor, and reached out 
to offer comfort and assistance to his family, every detail was only 
more heartbreaking and infuriating. Taylor was a West Point graduate 
and U.S. Army veteran who had survived combat in Iraq. He was in Israel 
as part of a Vanderbilt University Business School delegation seeking 
to build connections with the vibrant Israeli technology sector. He had 
come to Israel only to learn and build and grow, and he was cut down in 
the prime of life.
    The terrorist who murdered Taylor was shot dead at the scene by 
police. Vice President Biden forcefully condemned the attack, and added 
that the United States ``condemns the failure to condemn these acts.'' 
That remark foreshadowed a very difficult conversation he had later in 
the visit with President Abbas of the Palestinian Authority. And a 
condemnation was not forthcoming, as it clearly should have been.
    Throughout the Obama administration, we had on many occasions 
raised the issue of incitement in its various forms with President 
Abbas and had spoken out publicly about it. The unacceptable messages 
of tolerance for, glorification of, or even encouragement to violence 
by Palestinians against Israelis that are part of Palestinian political 
discourse help fuel the waves of terrorist attacks Israelis have 
suffered from. So does the indefensible Palestinian Authority practice 
of providing payments to Palestinians in prison for terrorist attacks, 
including those who killed Israelis, and to the families of those who 
died carrying out such attacks. Indeed, the Palestinian system actually 
provides more money to those who serve longer sentences, meaning the 
worse the crime, the greater the financial compensation.
    This is an abominable practice, and it must stop. Palestinians who 
seek to win the confidence of Israelis that they will need if they ever 
hope to achieve their own political aspirations through negotiations 
must understand both how immoral this practice is and the grave damage 
it does to their own goals.
    Palestinian leaders say it is not as politically easy as we would 
like to put an end to this practice. In Palestinian culture, prisoners 
who have committed violent acts against Israelis are revered as freedom 
fighters, and acting against them comes with high political cost. But 
this is not an acceptable excuse. While one can understand the need to 
provide welfare payments to families that are struggling economically 
and have lost a breadwinner, similar to other families in that 
position, there should be no extra bonuses for someone who attacks 
Israelis. It incentivizes the killing of innocents, and it is just 
wrong.
    So I commend Senator Graham for taking the lead to introduce 
legislation designed to bring an end to this abhorrent practice. It is 
a worthy goal, and it is a fitting tribute to the life and service of 
Taylor Force.
    To truly get at the problem we are trying to solve, our goal must 
be, as my colleague on this panel, Elliott Abrams, has written, to 
bring about a change in Palestinian political culture. We must promote 
a change that ends any glorification of or encouragement to violence. 
And so, the questions before us are, what is the most effective means 
to pursue that goal; how can we pursue it without causing harmful 
unintended consequences to other U.S. and Israeli interests, or to the 
well-being of innocent Palestinians; and what is the role of U.S. 
assistance in that calculus?
    To briefly review what this committee knows well, the U.S. 
assistance program under Economic Support Funds (ESF) to the 
Palestinians includes several elements: 1) project assistance carried 
out by USAID, through vetted NGO partners, to build schools, roads, 
health clinics, and similar infrastructure projects in the West Bank; 
2) debt payments paid directly to Israeli fuel and electricity 
providers on behalf of the PA, and to the Israeli-run East Jerusalem 
Hospital Network to pay bills incurred by the PA; and 3) humanitarian 
assistance through vetted NGO partners to Palestinian civilians in 
Gaza. Barring a one hundred percent reversal by the PA on the prisoner 
payments, all of these streams of assistance would be cut off under the 
legislation as it is currently drafted. Assistance for training 
provided to the Palestinian Authority Security Forces not under the ESF 
account would not be affected.
    The total of the ESF program has declined in recent years from 
approximately $400 million to approximately $260 million in the last 
fiscal year. One reason for the decline is that the Obama 
administration negotiated reductions in the program with Congress to 
overcome previous Congressional holds by metering out the program in 
smaller amounts. Furthermore, starting in Fiscal Year 2015, Congress 
directed a reduction in the economic assistance program to the West 
Bank and Gaza ``by an amount the Secretary determines is equivalent to 
the amount expended by the Palestinian Authority as payments for acts 
of terrorism by individuals who are imprisoned after being fairly tried 
and convicted of acts of terrorism, and by individuals who died 
committing acts of terrorism during the previous calendar year.'' It 
should be noted that the actual reduction amount and methodology used 
to calculate that figure are submitted to Congress in a classified 
report each year. Similarly, beginning in Fiscal Year 2014, budget 
support that used to be provided directly to the PA Ministry of Finance 
is now paid directly to Israeli creditors, so the money literally never 
reaches the PA's hands to ensure it cannot be misused.
    So one question this history raises is, how effective is this tool 
as leverage on the Palestinian Authority to get them to change their 
policies about payments that reward terrorists? We have already made 
reductions on this basis, and it seems not to have persuaded President 
Abbas to change the policy. It is possible that a total cutoff would be 
more persuasive. But it has not been our experience that assistance 
cutoffs--indeed, those Congressional holds I cited, which at times have 
lasted many months--have had the desired effect of changing Palestinian 
Authority policies. The political posturing likely by Palestinian 
leaders in response to a cutoff might, in fact, lead them to dig in 
their heels and declare that they will make do without the assistance. 
Indeed, there may be more leverage in the threat of a cutoff, than in 
the implementation of it. But that is an important question that 
members of the committee should consider.
    A second question is, what is the purpose, and what is the value of 
our assistance programs? What interests are advanced by providing them 
in the first place? As I mentioned, much of assistance takes the form 
of projects to benefit Palestinian civilians in the West Bank that are 
not carried out by the Palestinian Authority. These investments in the 
West Bank economy, which improve the quality of life for Palestinians 
and help generate private sector activity, help keep the West Bank 
stable.
    It is, of course, in the Palestinians' interest to receive this 
assistance. But it may be even more in Israel's interest. I say that 
because of the strong support these projects receive from the Israeli 
government and the IDF leadership. During my time as Ambassador, with 
USAID operating under my chief of mission authority out of Embassy Tel 
Aviv, we ensured that not a single dollar was spent on West Bank 
projects that did not have the express approval of the IDF leadership. 
Every project was coordinated through COGAT, the Coordinator of 
Government Activities in the Territories, which is the IDF body that 
supervises civil activities in the West Bank, and all implementation 
was carried out under their rigorous oversight. I believe that is still 
the case today. The leaders of that organization, and other members of 
the IDF General Staff, were enthusiastic supporters of USAID's work, as 
I believe they have briefed Members of Congress on a number of 
occasions. From time to time, when an issue required me to raise a 
matter related to our assistance projects to the political level, I 
found equally strong backing from Ministers for the continuation of our 
efforts.
    The reason for this, I believe, is well-understood. Stability in 
the West Bank, both economic and political, serves Israel's security 
interests by dampening the atmosphere in which more Palestinians might 
be drawn to extremism. At least that is how the Israeli officials I 
worked with explained it. They even extended that logic to the solvency 
of the PA itself. So despite years of complaints about Palestinian 
incitement, the Israeli government has not cut off any of the steps it 
takes to ensure that the Palestinian economy remains viable and that 
the Palestinian Authority remains functional. For example, the 
Palestinian Authority does not have the capacity to collect their own 
customs revenues. So under the Paris Protocol, which has governed 
Israeli-PA relations since the 1990s, Israel collects revenue on the 
PA's behalf and then transfers the money every month to the Palestinian 
Authority. On occasion, when Israel has gotten frustrated with 
Palestinian actions, it has temporarily halted these transfers. But 
Israel has always resumed them after a short hiatus, often under the 
urging of IDF leaders and Israeli Ministry of Finance professionals, 
because it consider the risks to Palestinians stability, and therefore 
to Israel's security, to be too high.
    And despite intense feelings and justified anger in Israel about 
the prisoner payments, the Israeli government has never stopped 
transferring the customs revenues it collects on behalf of the 
Palestinians to the PA over this issue either. Now there is a debate 
underway in Israel about whether supporting a complete cutoff in US 
economic assistance will achieve the desired objective of compelling 
the PA to stop the prisoner payments. Retired Israeli generals and 
security commanders can be heard on both sides of the issue. Some 
Members of Knesset have advanced legislation to withhold tax revenue 
transfers commensurate with prisoner payments, although it is far from 
clear that it will reach final passage. Certainly, the Israeli 
government can speak for itself on its views, and I trust it will do so 
with the administration and Congress. I would simply add that until I 
left government service six months ago, the Israeli officers charged 
with maintaining security and stability it the West Bank, who had 
repeatedly affirmed to us that they would not welcome any sustained 
reduction of assistance to the Palestinian Authority, had indicated no 
change in their attitude.
    Our assistance programs are also consistent with the goals laid out 
by the Trump administration as it has undertaken its initial forays 
into Middle East peacemaking. While some aspects of the 
administration's approach to negotiations are still evolving, it has 
been a consistent theme of statements by President Trump, Secretary of 
State Tillerson, and Special Envoy Jason Greenblatt that improved 
economic conditions for Palestinians in the West Bank are a high 
priority in any scenario. They, of course, have also been clear that 
they seek an end to Palestinian incitement, glorification of violence, 
and payments to prisoners. But I think it is clear that they want to 
see both those goals advance, and it would seem that they associate our 
assistance programs with that effort.
    U.S. humanitarian assistance programs in Gaza are also strongly 
supported by the Israeli authorities, as they relieve suffering among 
Palestinians who have lived through three wars and endure hardships 
under Hamas' terrorist regime, thereby helping prevent a humanitarian 
catastrophe on Israel's border. While some of these programs are 
ongoing, they have been particularly important in the wake of 
conflicts, when damage is greatest and suffering is most acute. After 
each such round of conflict, Israel has strongly supported a surge of 
U.S. humanitarian assistance to provide basic food, medicine, blankets, 
and shelter for thousands of homeless Palestinians in Gaza, including 
many children, and the United States has always responded with 
bipartisan support.
    Finally, it is worth mentioning the potential impact of any cutoff 
in our economic assistance on the security assistance programs. In 
recent years, the United States has provided between $40 million and 
$75 million in assistance to support training of the Palestinian 
Authority Security Forces, which all agree perform effectively in 
combatting terrorism. President Trump has spoken about the excellent 
security cooperation between Israel and Palestinian forces, to which 
the IDF commanders also attest. This is perhaps the most positive story 
of the past ten years with regard to the Israeli-Palestinian conflict. 
But the Palestinian public often views these security forces as puppets 
of the Israelis, even as the Palestinian Authority and these forces 
remain deeply committed to the mission because they fear the threat 
posed to them by Hamas. But if security assistance is the only U.S. 
support that remains, then it becomes politically much more difficult 
for the Palestinian leadership to accept these funds and continue the 
program. Any weakening of that program could contribute to a 
deterioration in security cooperation between the two sides, which 
would benefit no one except Hamas.
    So we face the two imperatives that I mentioned earlier: 
effectively advance the goal of ending Palestinian payments to 
terrorist prisoners, while avoiding unintended harm to other U.S. and 
Israeli interests and supporting the efforts of the Trump 
administration. With those goals in mind, I recommend consideration of 
the following measures:


 1. Provide Flexibility: The Trump administration can certainly offer 
        its own views of the legislation, but my experience working in 
        the Executive Branch leads me to believe that providing the 
        administration with greater flexibility ensures that they can 
        apply the tools in the legislation with greater precision. One 
        option is a national security interest waiver that would allow 
        the President or the Secretary of State to waive, in whole or 
        in part, the requirement to cut off aid to the Palestinians if 
        they judged that it was in the national security interest of 
        the United States to continue the aid. The Trump administration 
        has already prioritized the prisoner payments issue and is 
        pressing the Palestinians, but the waiver would also give it 
        some flexibility and not completely tie its hands, enabling it 
        to respond to either a breakthrough or a crisis.

 2. Be More Targeted: Another possibility would to be more precise in 
        designating the ESF funds that would be subject to a cutoff. 
        For example, cutting off only the budget assistance that goes 
        to the Israeli companies providing electricity and fuel in the 
        West Bank would have the most meaningful effect on the 
        Palestinian leadership's calculus and impact the Palestinian 
        Authority's budget without cutting off aid that goes directly 
        to the Palestinian people, provides humanitarian relief, or 
        bolsters stability and security.

 3. Set Funds Aside: Rather than simply cutting off whatever funds are 
        impacted by the legislation, consider explicitly setting them 
        aside, perhaps even in an interest bearing account, and 
        highlight that they remain available to be drawn upon at such 
        time that the Secretary of State can certify that the 
        Palestinian Authority has ended the objectionable payments or 
        put in place a more credible social welfare system that does 
        not reward terrorism. This approach, rather than being strictly 
        punitive, would provide a strong incentive for the Palestinians 
        to implement the reforms we seek. A variation of this approach 
        would be to set a date certain when the restriction on 
        assistance would take effect, giving the Palestinian Authority 
        a limited window of time and a clear incentive to end these 
        payments.

 4. Consider Alternative Forms of Assistance: There are potential uses 
        of assistance dollars outside the scope of our traditional West 
        Bank and Gaza ESF program that could strongly counter the 
        negative influence of incitement and prisoner payments, 
        regardless of the actions of the Palestinian Authority. For 
        nearly a decade, Congress has appropriated $10 million a year 
        to provide Conflict Management and Mitigation (CMM) grants, 
        which support NGOs that build people-to-people ties between 
        Israelis and Palestinians, and between different groups within 
        each society. In my years as U.S. Ambassador, I was deeply 
        impressed by the impact of these programs in changing attitudes 
        and building bridges. Any reduction in our West Bank and Gaza 
        ESF program could be used to increase funding for CMM grants. 
        Another option would be to direct some of our ESF funds to a 
        program designed to boost the Palestinian hi-tech sector. I 
        refer the Committee to the article, ``Start-Up Palestine: How 
        to Spark a West Bank Tech Boom'' by Yadin Kaufmann in the July/
        August 2017 issue of Foreign Affairs, which proposes 
        establishing a Palestinian equivalent of the highly successful 
        U.S.-Israel Binational Industrial Research and Development 
        (BIRD) Foundation. Under such a program, Palestinian start-ups 
        would be paired with established U.S. partner companies and 
        receive grants to support R&D costs. The result would be to 
        promote some of the most pragmatic, least ideological, and 
        highly productive elements of Palestinian society, creating 
        jobs and economic opportunities for Palestinians, and even 
        potential linkages between Palestinian and Israeli hi-tech 
        entrepreneurs.

 5. Use Diplomatic Leverage: Arguably, the Palestinian leadership is 
        far more sensitive to its international reputation than to 
        suspensions of aid. It may be more effective to undertake a 
        concerted diplomatic campaign on this issue. U.N. Ambassador 
        Nikki Haley, who has staked out strong positions supporting 
        Israel and opposing terror, would be well-positioned to try to 
        get others at the United Nations, and perhaps the Security 
        Council itself, to call for the Palestinians to end these 
        payments. She might start with a briefing to the Security 
        Council on the subject. The issue should also be raised at the 
        ministerial level in our bilateral discussions with European 
        and Arab governments, including those who participated in the 
        Riyadh Summit, urging them to echo our concerns in Ramallah so 
        that the Palestinians are hearing a chorus of calls for change, 
        not just American voices. The Quartet remains a valuable 
        vehicle through which to communicate such messages. The July 
        2016 Quartet Report, which sharply criticized the Palestinian 
        Authority on incitement to and glorification of violence (among 
        other causes of the political stalemate) produced a very 
        sensitive reaction on the part of Palestinian leaders, who 
        chafed at the criticism from such a broad group of 
        international actors. And the upcoming meeting of the Ad Hoc 
        Liaison Committee in September, the gathering of donors who 
        support Israeli-Palestinian peace efforts, presents an 
        excellent opportunity to get other influential players and 
        donors to establish their expectations for an end to 
        Palestinian payments to terrorists in prison. Sustained 
        multilateral messaging to the Palestinians may be more 
        effective than U.S.-only initiatives.


    Making clear that it is unacceptable to incentivize or reward 
terrorism in any way is completely appropriate, and it is a worthy goal 
of the Taylor Force Act. Doing so in a way that preserves stability and 
security in the West Bank would be consistent with the goals of the 
Trump administration, which has already devoted considerable energy to 
the cause of Israeli-Palestinian peace. And finally, as this committee 
so often has, finding a way to convey bipartisan support for all of 
these priorities invariably results in stronger, more effective, 
legislation.
    Thank you.


    The Chairman. Thank you.
    Thank you both for being here.
    Just to set a little context, first of all, the payments 
that go to prisoners are not all made to terrorists. So I think 
people should understand there we understand there are going to 
be welfare payments to people who are standard prisoners.
    The problem we have here is that there is an incentive 
program, passed into law, that pays people more for committing 
terrorism. And the more heinous the crime, the more they get 
paid for a longer period of time. So that is the aspect that we 
are looking at.
    The way the Graham bill was first crafted, it cut off all 
ESF payments, and then gave a national security waiver. So 
there has been some concern that what you would really do is do 
nothing, because the likelihood is an administration would use 
the waiver. So you end up actually doing nothing to push back 
against this issue.
    So we have talked with Senator Graham about doing exactly 
what you have said, and that is separating the two. Payments 
that go directly to the Palestinian Authority, we would cut 
off, period, without any waiver. The payments that actually go 
to the Palestinian people, the humanitarian aid and those kinds 
of things, those would continue.
    In addition, I think we will reach agreement on the 
hospital issue. I think that is the one exception relative to 
the money that actually goes to the Palestinian Authority.
    Interestingly, this would cut off $50 million a year to 
Israel, I think you all understand that, because we actually 
make debt payments. We give the money to the Palestinian 
Authority, and they give that money to Israel. Israel is very 
aware of that, by the way.
    To my knowledge, in speaking directly with their 
Ambassador, they support the fact that they are going to be cut 
off from $50 million a year.
    So I think we are getting to a place where we are going to 
have a very effective piece of legislation. We have been 
working with Senator Cardin to get to that place.
    I guess my question is: If this has been going on for a 
long time, why did it take the death of Taylor Force to bring 
this issue to the forefront? I do not understand why Israel has 
not taken action.
    Could you just give us context as to why this would be 
going on this long? People have been aware that this has been 
happening, and I know, Elliott, you mentioned you wished you 
had done something about it under President Bush.
    Why is it just now that we are beginning to take action on 
this issue?
    Mr. Abrams. Mr. Chairman, I think there was a lack of 
information and lack of clarity. If you ask me, did I know in 
2002, for example, 2003, 2004, 2005, this was the setup, my 
answer would be I did not. I think there is also more attention 
now than there has ever been to the glorification of terrorism 
in the Palestinian media and the naming, by the PA, the naming 
of schools and parks after murderers.
    So I think there has been a steady accretion of attention. 
Some of the European countries, the British, for example, have 
also stopped paying the PA directly in cash, because they do 
not want the money used in this way.
    So we have been learning more. We have been paying more 
attention. And this terrible death of Taylor Force is what 
really got people to stand up and say, wait a minute, now we 
understand it, and it is intolerable.
    Ambassador Shapiro. I would obviously agree with your 
observation, that it has been going on for a long time but has 
not received the attention that it deserved. Most of our 
discussions--in fact, of course, the committee and the Congress 
did respond to this by reducing, with the Obama 
administration's assistance, the overall assistance program in 
a manner that was designed to be dollar-for-dollar what was 
assessed to be the payments to these terrorists in prisons. So 
already, there has been an adjustment to it.
    I have to say, most of our discussion with the Israeli 
Government during my service as Ambassador on the issue of 
incitement, and it was raised frequently, we actually raised it 
with each other, did not deal precisely with this issue. I am 
not saying it was never mentioned, but it was not the area of 
emphasis. The area of emphasis was on messaging, on 
glorification, on naming schools and squares after terrorists, 
on the use of social media.
    And it may be because they, too, were struggling with how 
to respond and try to end that form of incitement without 
creating unintended consequences for the stability of the West 
Bank and the Palestinian economy.
    The Chairman. Let me just close with this. There has been 
an evolution concerning the laws themselves that has occurred. 
Sander Gerber came to our office and did an outstanding job 
laying out the steps that had been taken.
    I do not know if committee members have seen it, but what 
has happened through the years is that the Palestinians have 
continued to develop this language in such a way that has made 
it clearly defined now. The language now actually lays out a 
chart of how they are going to pay people who kill innocent 
civilians. So I want to thank Mr. Gerber for helping to bring 
light to that.
    I want to thank both of you for your testimony, and I hope 
the committee will take action on this very quickly.
    Senator Cardin?
    Senator Cardin. Mr. Chairman, I am convinced that we will 
take action, and that we will come together on legislation.
    But we are here having a challenge. I think these are 
defining moments for what this committee needs to do. 
Generally, we give, pretty much, a blank check to the 
administration on how they use foreign assistance. There is 
$260 million appropriated. Those decisions are primarily made 
between the executive branch of our government. The Israeli 
Government is very much involved in those decisions. And within 
certain categories, the money is allocated.
    So some of the money goes to Israeli creditors for fuel and 
energy. Some goes to projects for schools within the 
Palestinian areas. Some goes for hospitals in Israel. As I 
understand it, there are hundreds of different projects that 
are funded out of that $260 million.
    The time has come, Mr. Chairman, where we are going to have 
to be much more prescriptive. I am hearing that from the 
testimony here today. We are going to have to be very 
prescriptive.
    The question is, do we just want to make sure the $260 
million goes to safe projects, such as hospitals and energy 
payments? Or do we want to have a punitive impact of stopping 
monies going to the Palestinians with a carrot-stick approach 
that could be released if they give up their payments to 
prisoners and terrorists?
    I think we want to have a positive impact, so we are going 
to have to have some real stick approach here of cutting funds 
in order for this to work, and we are going to have to take 
that responsibility as the authorizing committee as to how we 
draft that.
    It is not going to be easy. It is going to have to be, in 
some cases, rough justice, because I do not think we can name 
one hospital, but we may say hospitals are fine. We will have 
to figure out how we figure this out.
    The other point I would bring up, we should not be 
surprised--Mr. Abrams, I think your comment about not knowing, 
we were all in that category. We sort of ignored that. We see 
textbooks that are in countries that we give significant 
financial assistance to that preach anti-Semitism, and we 
wonder why that leads to violence and leads to the situation 
where the Palestinian Authority now is sponsoring terrorism by 
giving these payments.
    So it has been a slippery slope. I am a strong supporter of 
U.S. foreign assistance, and we need to have even more monies 
in our foreign assistance budgets. But I am very much in 
support of this committee exercising our appropriate role to 
make sure that we do not allow any U.S. support to go to that 
type of conduct, whether it is the Palestinians on payments to 
prisoners and terrorists or whether it is text books being 
printed in Egypt that are anti-Semitic. We should be much more 
directed to make sure that does not happen. And we can, I 
think, take that appropriate role.
    So I have two individuals who have served in the executive 
branch. What you seem to be saying to us is that you want 
Congress to be more prescriptive. You want this committee and 
Congress to say that the administration does not have 
discretion that could undermine our desire to make it clear 
that there will be a penalty if this practice continues.
    Is that what I am hearing?
    Mr. Abrams. Yes. I think where you stand depends a little 
bit on where you sit on this question of executive branch 
discretion. But there are too many incentives for any 
administration always to use the discretion you give them to 
keep the money flowing. If you are serious about stopping it, 
you have to stop it.
    Ambassador Shapiro. I have proposed a number of ways that 
the committee and the Congress could be precise about how to 
use the tool. You could use the other alternative approach, 
which probably most executive branches will advocate for, 
cannot speak for this one, which is to say, give us the 
authority, the waivers, let us decide how to be precise about 
it.
    But I have no problem with the Congress being very 
prescriptive to say no U.S. funds can go into the coffers of 
the body that is paying, or even to pay its debts, that is 
paying these prisoner payments because of the issue of 
fungibility. If you, then, choose some of these other methods 
to be precise about what to cut but what also to allow to flow, 
to not allow unintended consequences to occur, I think that is 
just as effective.
    Senator Cardin. We might have to take it to the next step 
and say what they need to do to get funds released, not what 
the administration can do, but spell out in statute what is 
required for that type of flow of funds to continue.
    Ambassador Shapiro. I do think the clarity of what is 
required to change the approach or to meet the requirements of 
Congress is useful, because then there is an actual incentive 
structure built into the legislation to get the result we want, 
which is to end those payments.
    Senator Cardin. And I would point out, as the chairman and 
I worked very hard on the Russian sanctions bill that passed 
overwhelmingly on the floor of the Senate, that bill is more 
prescriptive than we have been in the past on how we desire 
sanctions to be imposed for two reasons: one, to make it clear; 
and, secondly, so there is no ambiguity in the administration 
of the statute.
    I think we are going to have to take a very similar 
approach as we deal with the Taylor Force law.
    Thank you.
    The Chairman. Thank you.
    If I could, the most recent draft does explicitly what you 
just said, and that is, it lays out that they have to repeal 
the law and stop making payments, and then the money can flow 
again. So they have to repeal the law that says they are going 
to pay terrorists, and they have to stop making payments. So 
the proposed legislation is very prescriptive.
    And if I could, just as it relates to the committee, I 
think we have broken new ground over the last several years 
over the congressional review issue. I am a strong proponent of 
congressional review and us having a say, especially when it is 
going to affect, in a significant way, foreign policy.
    I had a member of the Banking Committee come up to me 
yesterday who is offering sanctions legislation on another 
matter, and this is beginning to take hold in other committees 
where people realize that our ability to have an effect on 
executive decisions is appropriate.
    I just want to say, in my opinion that is a big win for 
America, and a big win for the United States Senate. And I 
thank everybody for working with us in that way.
    With that, Senator Rubio?
    Senator Rubio. Thank you, Mr. Chairman.
    These so-called welfare payments, I think you all have 
described sort of a system where we are not rewarding specific 
acts, in the amount of just welfare payments to help people who 
are coming on tough times.
    Let me ask, do we know if there are any such payments to 
the families of other deceased Palestinians who did not commit 
violent acts? Is any sort of funding provided to families who 
have someone who has died but not as a result of violent acts?
    Mr. Abrams. I am not aware of any.
    Ambassador Shapiro. I do not know the answer to that 
question.
    Senator Rubio. And in 2015, the Congress directed the 
administration to deduct from our aid to the Palestinians in 
relation to the terrorism-related payments. The provision in 
the Consolidated Appropriations Act reduces by the amount the 
Secretary of State determines is equivalent to the amount 
expended by the Palestinian Authority, the PLO, and any other 
successors, et cetera.
    To the best of either your knowledge, is this law being 
enforced?
    Ambassador Shapiro. Yes, the law is being enforced. The 
Obama administration for fiscal year 2015 and 2016 did reduce 
the assistance. That largely accounts for the reduction from 
the $400 million to around the $260 million, almost all of it 
in what is called the budget support category, which the only 
thing left, I think, in that category is the debt payments to 
the electricity company and to the hospitals, around $70 
million.
    So, indeed, it was done. There was, I believe, a classified 
report provided to the Congress to explain the methodology and 
the amount by which that reduction occurred.
    Senator Rubio. And as far as the general relationship and 
our interaction, perhaps you, Ambassador Shapiro, having 
recently served in the region, what is your assessment of how 
active the United States has been in pressing the Palestinians 
to end the practice of paying prisoners and their families? Is 
this something that is being brought up as sort of a pro forma, 
we have to say it?
    Can you describe a little bit more in depth the efforts 
that we have made in the past to drive this point, and more 
importantly, whether, in fact, in your view, they actually 
believe that we would ever do more than what is happening now?
    Ambassador Shapiro. Sure.
    It has certainly been part of our discussion with the 
Palestinians. The broader issue of incitement, which includes 
other forms of encouragement or glorification of violence, has 
been a major part of that discussion raised in virtually every 
meeting that I am aware of between officials in the 
administration I served, I am sure in the current one, as well. 
The current administration has clearly, at least according to 
reports, elevated the issue of the prisoner payments as well.
    But I can tell, as the administration was working to 
implement that mandated reduction in that sort of dollar-for-
dollar approach for prisoner payments, a big part of that 
preparation for the reduction involved conversations with the 
Palestinian Authority to tell them this was coming, and there 
was going to be a hit unless they did reduce or end those 
payments. Since they did not, the implementation of the 
reduction occurred.
    So the conversation has been going on for a long time. As I 
said, it encompasses other aspects of incitement, which I think 
got more emphasis in the Israeli dialog with us on incitement. 
But as awareness has risen, there has been more focus on this.
    Has it worked? Unfortunately, I do not think we can say it 
has achieved the desired objective.
    Senator Rubio. I guess my final point, and this is not a 
policy proposal, because this is an issue that we need to 
understand a little better, but both of you have said that it 
would be acceptable if this was just a system of welfare to 
help families who have a relative who is imprisoned.
    My question is, is that, in and of itself, not incitement? 
So even if there is not a reward, per se, an additional amount 
for an attack, if, in fact, you are considering becoming 
involved in a terrorist act and you know that your family is 
going to get taken care of if you do, is not a welfare system, 
even that, in and of itself, an incentive to at least--maybe 
you will not have a windfall but you most certainly would 
consider that as a factor in determining whether or not to go 
carry this out, knowing that your family is going to be taken 
care of? In essence, it is a pension for terrorists, or at 
least for their families.
    Mr. Abrams. I think that is correct, Senator. I think 
people should be eligible for whatever general support may 
exist in the society, if a breadwinner is taken out of the 
picture. But if there is anything extra, anything special for 
the family of someone who has committed acts of terror, it is a 
reward.
    Ambassador Shapiro. I agree with that.
    The Chairman. Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman, for holding this 
hearing.
    To our witnesses, the legislation we are considering today 
addresses a twisted and brutal policy that incentivizes 
violence that impacts our allies and our own American citizens.
    And I appreciate Senator Graham, who has talked to me quite 
a bit about the legislation, doing this on behalf of the family 
of Taylor Force, who was a brave, honorable, young American, 
whose life was stolen in the name of false martyrdom, 
introducing the legislation to start what I hope will be an 
ultimately meaningful result.
    It is outrageous and unconscionable that any government 
anywhere in the world in the 21st century would codify, openly 
write into legislation, incentives for harming and killing 
innocent civilians.
    Many of us have long been concerned about political leaders 
inciting violence against innocent civilians, but the detailed 
codification of providing financial assistance not only to 
those who commit acts of violence and terror but also provide 
payments to their families if they are convicted through due 
process, is much more than incitement. It is incentivizing.
    Incentivizing these heinous and brutal acts in law sends a 
clear message to the Palestinian population, in general, and to 
the world that the leadership of the PA values those who commit 
violence, and encourages individuals to perpetuate it.
    This practice and the recent insistence of the Palestinian 
Authority leadership to publicly defend this atrocious system 
serves to indoctrinate Palestinian youth and teach them that 
pursuing so-called martyrdom is a valuable path forward for 
them and their families.
    Now, I know that over the past few years, the United States 
has tried to take measured steps to stop this practice. To that 
point, as some of my colleagues have pointed out, no direct 
dollars go to the Palestinian Authority. And, therefore, when 
the administration submits its budget request to Congress, by 
law it reduces the amount of money that is ostensibly being 
spent on this program. And yet, Palestinian leadership seems 
unmoved, which leads me to my questions.
    Ambassador, and I appreciate your service to our country, 
when you raised these issues with the Palestinian leadership, 
what was their response? What did you get from them in terms of 
the actions that we took when no direct payments were taking 
place anymore? And what do you believe will be necessary for us 
to do in order to get the Palestinian Authority to stop this 
practice both in law and in action?
    Ambassador Shapiro. Of course, in my role as Ambassador to 
Israel the last five-and-a-half years of the Obama 
administration, I did not work directly with the Palestinian 
Authority, so I will not be able to describe my own 
conversations with them.
    I think the frustration we have had throughout the time we 
have served, and other administrations have had as well, has 
been a Palestinian leadership that is captive to certain 
narratives in which martyrdom is glorified, is seen as 
something that is essential to their national struggle, and 
where they do not put it in the same category as incitement or 
incentivizing of violence as we do.
    And so there are various circumlocutions and various 
excuses that are given. Some of it may have to do with simply 
what they consider to be politically viable. Some of it may be 
more ideological.
    Regardless of the excuse, it is an unacceptable phenomenon, 
as we have told them many times, as we now demonstrate in the 
reductions, and as you are considering----
    Senator Menendez. So what do you think--and I actually pose 
the question to both. What is necessary to move them away from 
this type of action? Because I cannot imagine any place in the 
world, much less in this particular circumstance, that we would 
permit or allow any of our resources----
    Ambassador Shapiro. I think they are, in some ways, more 
susceptible to concern about their international reputation, so 
there may be a kind of name-and-shame aspect of this. And to 
the degree that this legislation is crafted in a public debate 
in which their legal codes, which have not been well-
understood, are exposed, I think that is actually quite useful.
    But it also should not be only--and then we will make the 
necessary adjustments to the programs, but I do not think it 
should only be a United States and only a congressional and 
only an assistance-based approach. It should be diplomatic. It 
should involve many other countries, those countries that sat 
with President Trump in Riyadh, those other donors from 
European and elsewhere who also support the Palestinian 
economy.
    The Palestinians should hear this. They should hear it 
publicly and privately from many, many other voices. And I 
think they may be more responsive to that.
    Senator Menendez. Mr. Abrams?
    Mr. Abrams. I would agree with that. I think you need to 
cut off some funds. I think the naming and shaming is 
important, particularly coming from Europe. And some European 
countries have begun to cut off at least budget support.
    But I think what is really tragic here is the complete lack 
of leadership by President Abbas, who is defending these 
payments. I think he has an opportunity to explain this to the 
Palestinian people. And he has, instead, dug his heels in and 
is defending this system.
    Senator Menendez. You cannot seek peace while you pay 
people to kill.
    The Chairman. Senator Young?
    Senator Young. Thank you, Mr. Chairman.
    I first want to thank Mr. Force for his presence here 
today. I am so sorry for your family's loss. And thank you for 
helping us draw attention to this important issue, sir.
    Thank you to our witnesses. Clearly, you are both here in 
the spirit of recognizing that these terrorist payments to 
murderous individuals by the Palestinians must end. You each 
have different approaches to effecting this change.
    Ambassador Shapiro, in your prepared testimony, you suggest 
that a number of diplomatic steps could be taken at the U.N. to 
persuade the Palestinians to end these terror payments. You 
mention that Ambassador Haley should bring this up at the 
Security Council, for starters.
    What other specific steps do you believe our mission at the 
U.N. should take to persuade the Palestinians? And do you 
believe those steps would be successful?
    Ambassador Shapiro. The U.N. is a difficult environment to 
raise this issue. I am well aware of that. And I commend 
Ambassador Haley for already being very forthright in calling 
attention to incitement and incentivizing of terrorist attacks.
    She will have opportunities to shape the debate in the 
Security Council, both by perhaps calling in witnesses and 
experts to brief on this issue, so that some of these other 
governments are exposed to it. There will be the period when 
the U.S. maintains the presidency of the council and can set 
the agenda. And there are the monthly Middle East discussions, 
at which she can encourage others to raise this issue.
    Whether one could do enough education and overcome enough 
bias there to actually raise this to a level where you can get 
the Security Council to speak to the issue, which would be the 
most effective, a statement or even a resolution, in which the 
Security Council would actually echo what all of us are saying 
here, that this is an unacceptable practice, to me, that would 
be extremely, extremely impactful. Very difficult, but very 
important to try.
    Senator Young. Thank you, sir.
    Mr. Abrams, what is your assessment of our prospects for 
success at the United Nations, if you could be concise, in 
addressing this issue through that forum?
    Mr. Abrams. I would agree with Ambassador Shapiro. I would 
add, I think, there is a lot that can be done privately, 
particularly focusing on the aid donors. There are not 100 of 
them. There are probably a dozen countries that we could get to 
privately, and then get them to speak to the Palestinians.
    Senator Young. Mr. Abrams, since we have you and your 
expertise here at the table, I would like to bring up an issue. 
It pertains to actually something brought up by the chairman 
earlier, the importance of congressional review, and increasing 
importance of that by this committee.
    Have you had a chance to review the National Diplomacy and 
Development Strategy legislation, S. 1228, that I and Senator 
Shaheen have introduced, sir?
    Mr. Abrams. I have.
    Senator Young. And what are your thoughts about this 
legislation, which, I should say, Chairman Corker and Ranking 
Member Cardin have included in the fiscal year 2018 authorities 
bill, to my pleasure.
    Mr. Abrams. I am very supportive. I thought it was very 
interesting, because we have a lot of requirements to think 
about the goals, the objectives of American policy. We do not 
very often match the capabilities with the goals.
    We do not get analysis and reporting on, how are you going 
to get there? Do you have the tools that you need to get there? 
Does the State Department have the tools and AID?
    So I thought it was a really helpful addition. It is an 
assignment to the executive branch that I think they should be 
undertaking.
    Senator Young. Yes, existing authorities require State to 
produce a strategic plan, and I think there are probably a 
number of members of the committee and their professional staff 
that are not even aware this exists. It is a good attempt to 
produce what Congress asked of the administration, which is a 
list of goals. But it does not match your ways and your means.
    It is also unclassified. And if we are really going to dig 
into strategy, the strategy of our diplomacy and our aid 
deployment and so forth, we also need to have a classified 
version of this.
    Would you agree what that assessment?
    Mr. Abrams. I do. I think, as you say, the ways and means, 
or the capabilities, in a classified version, it is something 
that is not done often enough.
    Senator Young. What about integration with other 
departments? We have a military strategy--Treasury has its own 
version--all subsets of your National Security Strategy. Is it 
important for this document to be integrated and coordinated 
with those other strategic efforts?
    Mr. Abrams. It is. I think we all know that we need to 
avoid stovepiping and just thinking about what State can do, 
what AID can do. But we do not see enough of it. And the 
encouragement to do that I think is very valuable.
    Senator Young. Thank you for adding your sanction to it. 
You join National Security Adviser Stephen Hadley and Madeleine 
Albright and other luminaries in your field.
    I yield back.
    The Chairman. Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you both very much for being here to testify.
    Mr. Force, thank you for everything you are doing behind 
this legislation.
    The idea that a state authority would support and actually 
incentivize terrorism is abhorrent. And we need to really 
galvanize the international community, not just on this issue 
but in so many other ways.
    I wanted to address the Arab world, because that, it seems 
to me, provides the best opportunity to pressure the 
Palestinian Authority.
    Can both of you speak to how we can better encourage the 
Arab world to stop supporting terrorism, and to help us as we 
try to address this, not just with the Palestinian Authority, 
but in other parts of the Middle East and Asia, in particular?
    Ambassador Shapiro. I think President Trump created a solid 
foundation to make that effort with the summit he convened in 
Riyadh, which, if I am not mistaken, President Abbas attended. 
And at that summit, many, many Arab leaders, other Muslim 
nations pledged themselves to combat terrorism and the funding 
of terrorism, and the propaganda and the incitement that goes 
behind it as well.
    Some of them have work to do at home. Some of them have 
work to do in neighboring countries or in Syria or other 
venues.
    Somehow, too often, the Palestinians are not put in that 
category, and they get a bye on the issue of terrorism, when, 
in fact, these nations who rightfully, in their view, support 
Palestinian aspirations for statehood, could actually be 
extremely influential, if they were to break that taboo and 
say, in this case, we are going to say this Palestinian 
activity, this incitement, this incentivizing, is unacceptable.
    It would also be, I think, in keeping with the spirit of 
their new, if still somewhat nascent relations with Israel, to 
demonstrate to the Israeli public that they are willing to call 
out Palestinians on this unacceptable activity.
    Senator Shaheen. And is there more that we can be doing to 
support the foundation that was laid in those meetings in Saudi 
Arabia?
    Ambassador Shapiro. Some of these nations are also donors 
to Palestinian Authority. They are certainly all supporters 
diplomatically, and they have their channels and they meet 
regularly with President Abbas and other Palestinians.
    They have many opportunities to express this in many ways 
through funding streams and through diplomacy.
    Senator Shaheen. Right. I am really asking what we can do 
here to try to continue to encourage them to make those views 
known.
    Mr. Abrams. I would also add, Senator, I think they need to 
be called out on what they are doing. I think it is useful for, 
frankly, the Saudis and Emiratis to be calling out the Qataris.
    Last week, in London, the Henry Jackson Society, named 
after a member of this body for whom I had the honor of 
working, Scoop Jackson, did a report on Saudi support for 
extremism in the U.K.
    So there is a lot of work that all of these countries need 
to do to get out of the business of supporting extremism that 
leads to terrorism.
    Senator Shaheen. Well, you are absolutely right. Saudi 
efforts in Indonesia, I think, are another example that should 
be called out, for their effort to move that country, which has 
been a moderate, secular, Muslim country, in a different 
direction. And we should point that out.
    Let me ask, I understand that there are 270 retired Israeli 
generals who have expressed their opposition to this 
legislation. Can you all speak to why they are opposed, and 
what they think, and what Israel--I know you talked about the 
legislation in the Knesset, Mr. Shapiro. Can you talk about how 
we can better work with Israel to address this?
    The Chairman. If I could, I think they are opposed to the 
legislation as it was.
    Senator Shaheen. In its original form. Yes, I understand 
that.
    The Chairman. It is going to change. If I could, I think 
their objections will then be overcome. But anyway, go ahead.
    Senator Shaheen. Right. My question really is not about 
their objections as much as it is about how we can work with 
Israel to better coordinate efforts to try to address the 
fundamental issue here.
    Ambassador Shapiro. Right. I think, indeed, there is a 
debate within that community of retired security officers. Some 
express themselves. There are others, including at the 
institution I work at, who have expressed themselves in another 
view.
    In any case, they are all responding to the original draft 
of the legislation, which is now going through its various 
amendment processes.
    I think my experience working with the Israeli Government 
and the Israeli military leads me to believe that they will be 
very supportive of anything and any leverage and any pressure 
we can use to encourage the Palestinian Authority to end these 
payments. And at the same time, they want to ensure that U.S. 
assistance and other international assistance can continue in 
the way that it provides stability in the West Bank, provides a 
private sector activity that can draw Palestinians out of 
terrorism and into something more productive that deals with 
humanitarian challenges in Gaza.
    So I think they very much want to see that happen. I 
mentioned a couple other funding streams, the Conflict 
Management and Mitigation programs, and a program to boost the 
Palestinian high-tech sector, which would not touch the 
Palestinian Authority at all but, in fact, strengthen the very 
sectors of society that are most open to people-to-people 
connections and nonviolent activity.
    Senator Shaheen. Thank you both very much. You have been 
very helpful.
    The Chairman. Before turning to Senator Paul, regarding 
your comment about terrorism, I was really disappointed to see 
what Saudi Arabia did after having a great summit and bringing 
everybody together. I think this is quite possibly is a rookie 
mistake by a Crown Prince, who I think could be the future for 
Saudi Arabia. I just think this was maybe a rookie mistake.
    I would encourage all committee members to go down to the 
SCIF. The amount of support for terrorism by Saudi Arabia 
dwarfs what Qatar is doing--dwarfs it. So I think this is an 
opportunity for us to call all of them out--Bahrain, UAE, all 
of these countries that support terrorism.
    So I think the outcome of this situation could be positive, 
but again, probably a rookie mistake by Saudi Arabia.
    Senator Paul? Excuse me. Senator Risch?
    Senator Risch. Thank you, Mr. Chairman. I am going to be 
brief here. I will not take the full 5 minutes.
    I guess count me as a little further down the road than a 
lot of people here. To me, this legislation is an absolute no-
brainer. I would go much further than this. This thing has been 
going on for decades and decades.
    And I do not know how you explain to the American people 
that we are paying utility bills for people in the West Bank 
when people in America cannot pay their utility bills. So what 
are we getting for it? We are getting nothing for it, other 
than business as usual.
    We all sit around, and we talk, and we have meetings, and 
we have peace processes. Nothing changes.
    And so as long as Americans are willing to write checks 
over there for those people, things are not going to change.
    So I guess I would go quite a bit further than that. I know 
there will be a lot of resistance to that, saying we have to 
keep these people happy. Well, look, this is very, very 
difficult to explain to the American people, why we are doing 
this.
    Mr. Abrams, I want to commend you for pointing out what I 
think is the root of the problem, and that is I think Americans 
would be aghast if they saw what was being taught to little 
kids in the schools in either the West Bank or in Gaza. Again, 
we have already talked about how fungible money is. You can 
trace U.S. money right into these textbooks that are teaching 
kids from the time that they are born that their ambition in 
life should be to kill somebody that is innocent but thinks 
differently than they do.
    I mean, unless there is a cultural change, this, that has 
been going on is going to continue to go on for years to come.
    So again, I think this is a no-brainer. I think it is a 
first start. And count me as all-in on it, but I think we have 
to go further on this.
    Thank you for the time, Mr. Chairman. I yield back.
    The Chairman. Thank you so much. I apologize for 
overlooking you a moment ago.
    Senator Risch. It is not the first time. [Laughter.]
    Senator Risch. You are forgiven again.
    The Chairman. Thank you so much.
    Senator Merkley?
    Senator Merkley. Thank you, Mr. Chairman.
    The funds, as I understand it, that we are sending are 
currently administered all through the Israeli Government. Is 
that correct?
    Ambassador Shapiro. No, I would not say administered 
through the Israeli Government. There are sort of two 
categories. There is the project assistance, which the Israeli 
Government through its Coordinator for Government Activity in 
the Territories, certainly we coordinate with them. They sign 
off on projects. They do not ever control the money. But before 
it goes to an NGO, and the project, whether a hospital or a 
road or a water project or a humanitarian organization in Gaza, 
receive it, they have already given their assent to it.
    The other is the support for Palestinian Authority payments 
to the Israeli electric company or to the hospitals. So in 
neither case does Israel control that money, but in all cases, 
it has been coordinated.
    Senator Merkley. Okay, coordinated. Thank you.
    Mr. Shapiro, you mentioned that one of the things we could 
do is send our money to other purposes, to people-to-people, 
NGOs, or to development of the high-tech sector.
    Mr. Abrams, could you weigh in on whether you consider that 
to be a productive way to change the dynamic?
    Mr. Abrams. I think I would disagree with my friend, 
because then you are not cutting anything. And if the penalty 
for spending money to pay terrorists is, well, it goes from Box 
1 to Box 2, that is not much of a penalty. I think Palestinians 
need to be told this has to stop.
    So simply transferring money from one program to another, I 
think it is not enough.
    Senator Merkley. So I think I might explore this a little 
bit, because there are things that are Box 1 and Box 2 within 
the Palestinian Government, but then there are things outside 
of those boxes, such as helping private business prosper, which 
increases employment. Unemployment is very high. It is a big 
challenge in the West Bank.
    Mr. Shapiro, if I understood your suggestion right, it was 
not to go from Box 1 to Box 2 inside the things that are funded 
by the Palestinian Government, but to go outside those boxes. 
Did I catch that correctly?
    Ambassador Shapiro. Yes, that was my thought, that if money 
will be cut from the Palestinian ESF account, then there might 
be other productive uses for that money. It would not be, in 
either of the recommendations I made, under the control or even 
with any sort of coordination or sign-off from the Palestinian 
Authority, or that it would need to be.
    And so it was simply an opportunity that that might be 
representing, if some money is freed up, because cuts are made, 
there may be a way to use that money in a different stream, but 
that actually reinforces the very goals we are trying to 
achieve, strengthening the stability and the moderate elements 
in the economy of a more peaceful Palestinian community.
    Senator Merkley. I believe I read that there was a large 
group of former Israeli generals who have cautioned us to be 
careful about not making the situation worse and, therefore, 
ending up having more Israelis killed.
    Could one of you expand on that viewpoint?
    Mr. Abrams. Could I just say, that was an organized letter. 
There have been counter-letters.
    For example, a former Defense Minister and IDF chief of 
staff, Moshe Ya'alon, and General Amos Yadlin, a former head of 
military intelligence who is the president of the Institute for 
National Security Studies, have both said they favor the 
legislation, actually in its original form. They have not seen 
the amendments that were made just now, or proposed just now.
    So I think Israeli generals are divided on this. They do 
not want to see chaos in the West Bank. None of us want to see 
that. But this practice has to be stopped.
    Senator Merkley. I think everyone shares that view. That is 
why I am trying to get the viewpoint of both groups of 
generals.
    Mr. Shapiro?
    Ambassador Shapiro. I think that is accurate. There is that 
debate within the community, and, indeed, people I work with at 
my institute have supported the legislation. A different group 
has expressed some concerns about it.
    I think what is common to them is a desire to see an end to 
any support given to terrorists, any incentivizing, any 
incitement, any payments to terrorists or their families, and a 
desire to see a continuation of programs that are actually 
effective in making a more stable environment, because that is 
very much in Israeli security interests.
    Senator Merkley. Thank you both for bringing your extensive 
experience to bear on how we address this really important 
problem. I appreciate it.
    The Chairman. Senator Paul?
    Senator Paul. I want to thank the chairman for having this 
committee hearing on the subject. As you will recall, in 2014, 
I brought this subject up in S. 2265, where I offered a bill 
that would have cut off aid to the Palestinian Authority unless 
they were to renounce all ties to terrorism and payments such 
as these.
    The chairman blocked me at the time from bringing it 
forward in the full Senate, but said it would be a good 
committee hearing. So I am glad we are having a committee 
hearing on the subject, not my bill, but the subject, and I am 
supportive of the subject.
    I think, though, that I tend to agree with Senator Risch in 
the sense that you beat around the edges and say how much we 
love the Palestinian Authority for all these other things we 
have to have for stability. We are going to cut a little bit 
here maybe. And people worried, oh, gosh, we cut any of their 
money, they will be mad.
    You know, people sense weakness. You know, cut it all. Cut 
every last penny of it. If you want to restart some of it, 
restart it when they change their behavior.
    That would be the strength that would actually show 
something. But nibbling around the edges, they sense your 
weakness, and they will continue to do it. They have been doing 
it forever.
    But I guess the thing that really galls me is from 
Ambassador Shapiro's testimony, that the Knesset is considering 
withholding tax revenue commensurate with the prisoner 
payments, although it is far from clear that it will reach 
final passage. If the Knesset cannot even withhold the tax 
money, some amount of money equivalent to what the payments 
are, my goodness, what kind of message are we sending?
    So if we have a message, if the Knesset is listening to us, 
for goodness' sake, you have to do at least that first step, if 
you object to people paying the families of people who are 
killing innocent citizens.
    So both sides need to act. We need to do more. And I would 
do all of it, and then I would dial some of it back, that would 
be my personal opinion, if you get a change of behavior.
    But if you nickel and dime it and do a little bit at a 
time, my prediction is, you will get the same behavior you have 
gotten for years.
    Thank you, Mr. Chairman.
    The Chairman. Thank you. I appreciate you bringing up the 
fact, number one, that you have been pushing this for some 
time. Please also remember that the reason I opposed bringing 
it forth at that time was that the Israeli Government, who we 
are trying to help here, was strongly opposed.
    Senator Paul. Which is still a great irony when the Israeli 
Government is the biggest supporter of Palestinian Authority 
aid. That, to me, you know, shows also why you continue to have 
terrorism. You keep funding people who commit terrorism, you 
will get more of it.
    The Chairman. You know what I think would be good, even 
though I know you have given up your time, could you explain a 
little bit why the Knesset is having difficulties?
    They do collect the tax payments from Palestinians. And 
they could, in fact, hold those. That would maybe a violation 
of law. I am not sure, but I think it is.
    But let's talk a little bit about that, just to tease out 
some understanding. I am going to use a little bit of his time 
for you to do that.
    Mr. Abrams. Could I, in response to that, make a more 
general point? Because you can ask the same question about us. 
Why has it taken until July 2017 for us to face this?
    I think, in a very odd way, it is the peace process. 
Whenever this is raised, the answer always is, ``Wait a minute, 
we are negotiating. Don't upset the apple cart. Don't hurt the 
Palestinian Authority now.'' ``Now'' can be 2000, and it can be 
President Clinton. It can be President Obama. It can be 
President Bush. But that is what you keep hearing. ``Well, 
wait. Just wait on that, because these negotiations are 
underway.''
    Then 30 years goes by. Nothing has changed, and these 
practices are still in place.
    So that is why I think it is so important that legislation 
just pass now, regardless of, frankly, what the Palestinian 
Authority does or the Knesset does or the administration does.
    The Chairman. But here they are, they are cheering us on, 
and I think we are going to pass a bill. I am all for it, okay? 
But, I think, they should be doing more themselves.
    Talk to us just a moment about the internal issues there.
    Ambassador Shapiro. This came up a number of times during 
my service where, at various times, I believe the most recent 
one was after the Palestinians joined the Rome Treaty of the 
ICC, and Israel did suspend at that time the transfer of these 
customs revenues that it collects under the Paris protocol. 
This is the agreement that governs economic relations between 
Israel and the Palestinian Authority dating to the 1990s. And 
as a form of frustration, expressed frustration and outrage, 
they withheld those customs revenues.
    There were a couple other occasions where that happened. 
And always within a month or two, at most three, eventually, 
they relented, and they transferred those.
    Now those funds, far more than U.S. assistance, actually 
represent the bulk of the Palestinian budget. Something on the 
order of 60 percent of the Palestinian budget comes from those 
revenues.
    So they have identified, the Israelis, a risk that a 
significant cutoff or suspension of those direct revenue 
transfers, besides being against agreements, might actually put 
the Palestinian Authority's very existence and solvency and 
stability at risk. They have just come to the conclusion that 
their own security interests require continuing to transfer 
those funds.
    Now, as the issue of the Palestinian legal codes permitting 
these payments to terrorist prisoners has become clearer, I 
think members of Knesset have increasingly gotten activated on 
it. There is legislation moving. I do not know that we know the 
exact view of the government about that legislation, so I do 
not think we can predict the outcome. But like this body, it is 
getting more focused and getting more attention.
    But I think it runs up against that dilemma of, if there is 
a significant interruption of those revenue transfers, would 
the Palestinian Authority continue to be able to be stable?
    The Chairman. Would you like to use any more of your time?
    Senator Paul. No, I am good.
    The Chairman. Thank you.
    Senator Coons?
    Senator Coons. Thank you, Chairman Corker and Ranking 
Member Cardin. Thank you for convening this important hearing 
on such a pressing and important matter.
    And I am grateful to Senator Graham of South Carolina for 
introducing this legislation.
    And to Stuart Force and to your wife, Robbi, and I 
understand your sister Kristen is watching as well, I just want 
to also extend my heartfelt sympathy to you, my gratitude for 
your son, who represented the very best of America, who in 28 
years achieved a great deal, graduating from West Point, 
serving honorably in the Army, someone filled with promise.
    The idea that his life was not just horrifically, 
tragically cut short, but that there would be some incentive, 
incitement reward for that behavior is this sort of despicable 
practice that we are all gathered here to make sure we can put 
an end to, in his honor.
    So thank you for the witness you have provided to all of 
us, to motivate us to act in response to the best of what your 
son represented.
    And to our two witnesses, I appreciate knowing both of you 
and working with you for some time. So just let me ask two 
quick questions, if I might.
    Should we be concerned that the bill, as currently written, 
would prevent us from providing humanitarian aid to the 
Palestinian community broadly and, in particular, Gaza, should 
there be another outbreak of violence? You referenced it in 
your opening, but I would be interested in what you think about 
the value of figuring out a way in the ultimate bill for there 
to be an avenue for humanitarian relief.
    Ambassador Shapiro. I think that is one of the reasons I 
would recommend finding a means of flexibility, which sounds 
like it is underway already in the internal discussions here, 
because that kind of event often requires a response.
    That has been true after the last three wars in Gaza. At 
those times, the United States had strong bipartisan support, 
had strong Israeli Government support, led international 
efforts to provide relief to Palestinians who were suffering 
because of the conflict, also because of Hamas' terrorist rule 
that they live under.
    So if legislation, which I support, to cut off any funds 
that could possibly support fungibility payments to terrorists 
would also prevent us from responding to a crisis like that, 
which in no way would support those terrorist payments, I think 
finding a means, whether it is a waiver or some other means of 
providing that flexibility, would be in our interests.
    Mr. Abrams. I would be careful though, Senator. I would 
specify what crisis means. I think if you say to the average 
Palestinian, because of these payments, money is going to be 
taken from the PA and put into programs, a lot of Palestinians 
would say great, because the PA is corrupt.
    We have new opinion polls on this. The average Palestinian 
thinks the PA is very corrupt. So do we. But that is not any 
form of change or punishment. And something has to change, or 
they are going to continue these practices.
    Senator Coons. So you, Mr. Abrams, might suggest some 
threshold requirements for a finding that this is extraordinary 
circumstances.
    And part of my goal in talking about trying to focus on 
humanitarian relief is to distinguish between these despicable 
practices that are in law, that are funded by the PA, and the 
deep needs of the Palestinian people, to the extent that we can 
find a way to distinguish them.
    One other question, if I might.
    The Taylor Force Act is drafted to just target economic 
assistance funding, not security cooperation funds, if I 
understand correctly. But some experts have raised the concern 
that it would be politically difficult for the PA to continue 
supporting security cooperation with the U.S. and Israel if all 
non-security funding is cut. As you know, Israeli-Palestinian 
security cooperation is one of the only current bright spots 
and has improved considerably over recent years.
    How do you assess the likelihood that U.S. security 
assistance programming and this valuable Israeli-Palestinian 
security cooperation would continue on its current positive 
trajectory, if the U.S. cut its entire economic assistance 
program or cut it generally?
    Mr. Abrams. I am disinclined to believe that the 
Palestinians would walk away from security assistance.
    Security assistance, among other things, pays a lot of 
salaries of people with guns in the West Bank. I do not think 
President Abbas is going to just turn to those people and say 
you are not getting salaries anymore because I have decided to 
say no.
    Senator Coons. Interesting.
    Ambassador Shapiro. I think our security assistance pays 
more for training than for salaries, but obviously, again, in 
the fungibility argument, it does support that.
    It is clearly in the Palestinian Authority's interests that 
we continue security assistance, which is not affected by the 
legislation as drafted. I think the likelihood is they would do 
so.
    You raise, I think, a concern that has some at least a 
kernel of truth to it, that there is a political complication 
for the Palestinian Authority to see economic assistance cut, 
and then only to accept funds for the Palestinian security 
forces, which some Palestinians view as supporting the Israeli 
security more than their own.
    I do not think it is a good enough reason not to do it, if 
those are the tools we have to try to get at the terrorist 
payments.
    Senator Coons. I just want to thank you both for your 
testimony, and to our chair and ranking for focusing us today 
on this long-term, intractable, offensive practice of 
incentivizing violence against Israeli civilians, against 
Americans, and against others who are the targets of 
Palestinian action. I think we owe it to the memory of Taylor 
Force and to so many others to find a way, on a bipartisan 
basis, to craft a solution that is workable and that will make 
a difference.
    Thank you.
    The Chairman. If I could, before turning to Senator Kaine, 
I know you have Judiciary hearings and Appropriations hearings, 
but there have been some modifications we have discussed to 
separate out the monies that go directly to the PA and support 
the government from that that go to support the Palestinian 
people. I think we are getting to a really good place.
    Senator Coons. Thank you.
    The Chairman. Senator Kaine?
    Senator Kaine. Thank you, Mr. Chair.
    And thank you to the witnesses.
    And, Mr. Force, thank you for sharing this very, very 
painful part of your family's life, in honor of your son's 
memory, but also sharing it in a way that some good may come 
out of it in the future. I appreciate you being here.
    My interest in this legislation--I am very interested in 
the amendments that are being proposed--is wanting to stop a 
despicable practice, but wanting to do it in a way that it does 
not impact important humanitarian goals. I know the chair and 
ranking share that. And it does not impact security assistance. 
I think we all share that.
    I applaud the Trump administration for trying to tackle the 
impossible, saying that the peace process is still something 
that they really want to go after. I think there would be every 
evidence-based reason to say, why would we want to tackle it? 
But the fact that they are making that effort, I applaud it, 
and we would not want to set that back.
    I just want to ask a question about one potential amendment 
that is hinted at, Mr. Shapiro, in your testimony, and that is 
the setting aside of funds, instead of cutting off funds. The 
lawyer in me, when I would work on deals, there would often be 
escrow. You escrow things to encourage good behavior.
    I would think one reaction on the Palestinian side would 
be, ``Oh, you cut off funds for this reason. What is the 
likelihood that you are going to give these funds back?'' I 
think there would be some significant distrust in whether we 
would restart funds.
    However, if we can come up with the triggered behavior we 
want to see this stop, we are not going to cut off the funds, 
but the funds will be escrowed and the funds can only be 
released from escrow if you take these steps, if we can define 
it carefully enough, which I know this bill tries to do, then 
we can credibly say to them, look, this is not about trying to 
separate us from providing legit security, economic, and 
humanitarian assistance to the Palestinians. It is about you 
stopping behavior that we find offensive. Then they would not 
have the argument that the U.S. is just trying to abandon us.
    So I am kind of curious, I do not know whether that is a 
mechanism that has worked in other similar legislation. But on 
page 5 of your testimony, I thought that was an interesting 
proposal. I would just sort of commend it to the chair and 
ranking, as they are thinking about this bill, thinking about 
amendments to it, as an idea worth consideration.
    I would just like either of you to talk about that concept.
    Mr. Abrams. Just one comment.
    Of course, if you pass this bill tomorrow, they have until 
the end of the fiscal year, so it is, in a certain sense, in 
escrow until July 1, 2018, anyway.
    Ambassador Shapiro. My thinking, in including that 
proposal, among others, was simply, what is the most effective 
means of achieving the goal. If there are means of acquiring 
leverage where we can actually withhold something but also the 
leverage is that when the change is made, we can provide it, 
that is possible that will incentivize the change that we are 
seeking from the Palestinian Authority.
    I do not know it would. I think it would require, 
obviously, discussion among members here, but also perhaps some 
diplomatic discussions with the Palestinians to understand how 
they would react to that. Would it actually help them make the 
step we are trying to do, to overcome some of their political 
obstacles? Would they react negatively to that and view that as 
a kind of coercive mechanism? Maybe it would not work.
    But I think it should be on the menu of elements of a piece 
of legislation that would provide us leverage to actually 
effectively achieve the goal that we are all trying to achieve.
    Senator Kaine. Just conceptually, as I think about it, just 
sitting here listening to the testimony and reading it, you 
could escrow monies. You could give the administration the 
ability to release monies under certain circumstances. You 
could use sort of an administrative waiver as part of monies 
being released from escrow, if the administration thought that 
it was important to do that. So there are a couple ways to come 
at it.
    But this should be to discourage and end bad behavior. We 
would not want it to be more broadly seen as an effort to 
withdraw our support for important goals that the 
administration shares with respect to Palestine. There may be a 
way to use an escrow-type vehicle to do that.
    Just offering that as a thought. I thought that was an 
intriguing recommendation.
    Thank you.
    The Chairman. Thank you.
    Senator Murphy?
    Senator Murphy. Thank you, Mr. Chairman. I look forward to 
working with the chairman and the ranking member on coming up 
with a bill that can get consensus support on this committee.
    I share the goal of the members of this panel, and the 
leadership of this committee, that we should take any and all 
steps necessary to stop this abhorrent practice. This is just, 
I think, an exercise in trying to figure out how we get there.
    So I guess I just have two questions.
    One is for you, Mr. Abrams. You have cautioned Congress in 
the past about the dangers of cutting off aid to the 
Palestinian Authority as a punishment for a policy that we 
object to. And there exists an array of policies that we deeply 
and strongly object to, with respect to the Palestinian 
Authority.
    At the top of that list is the practice we are talking 
about today, but you can argue that just as strong an incentive 
for terrorism as these payments are, are the memorialization of 
these martyrs that continue to happen. We have discussed it 
already.
    So how do you pick out this particular practice as the one 
that we should condition all of our funds, versus, let's say, 
the naming of squares, the naming of public spaces that all can 
see that memorialize and celebrate these martyrs? Why not 
condition our funds based upon that practice or the decision to 
create textbooks that call for the end or the destruction of 
Israel? Why this as supposed to some of these other malevolent 
practices?
    Mr. Abrams. Senator, I actually did testify last year in 
the House Foreign Affairs Committee that we should be reducing 
the amount of aid because of the glorification of terrorism in 
the naming of schools and so forth after terrorists.
    I guess the difference here is American lives are directly 
being lost, so it is not hypothetical, and it is not a long-
term question of political culture. We are talking about paying 
money to people who have killed or tried to kill Americans, 
because there are a lot of American tourists in Israel. And the 
effect is, I think, more direct.
    Senator Murphy. Ambassador Shapiro, a lot of your testimony 
is about trying to make sure that the tactic we use actually 
results in a change of behavior. You can either choose to 
pursue a policy that has simple punishment as its goal, or you 
can pursue a policy that actually seeks to create a change in 
behavior. So maybe share a little bit more with us about the 
psychology in the PA relative to the withdrawal of funds.
    In particular, maybe relate it back to the Israelis' 
decision thus far not to pursue a policy of a complete cutoff 
of funds. They provide the bulk of funds necessary to run the 
authority. If they do not cut off funds, and the United States 
does, will that actually have the result of a change in 
behavior, given the fact that our funding is, I think, a 
relatively small percentage compared to the funding that flows 
from the Israelis?
    Ambassador Shapiro. Certainly, our funding is a fraction of 
the funding to support the Palestinian budget. It no longer is 
direct budget support. It is only to provide these debt 
payments to the electricity company and the hospital.
    And so I think there is this inherent dilemma, which the 
Israelis have struggled with. How do you gain leverage over the 
Palestinians to get them to make some of the changes in their 
own behavior that we all desire, that we all believe are 
necessary, when, at the same time, you could put at risk some 
of the benefits of the stability and the authority that the 
Palestinians have over cities that the Israelis do not want to 
control, do not want to occupy, do not want to be in? And 
perhaps that has created a sense of invulnerability on behalf 
of the Palestinians.
    Senator Murphy. Just practically, if they do not cut off 
their funds and we do, is that enough to create a change in 
behavior, if the Israelis do not create that firm 
conditionality?
    Ambassador Shapiro. It is very hard for me to predict 
exactly what would be the trigger to change Palestinian 
behavior. I would like us to see, as I also mentioned in my 
testimony, this not to be just an American effort. If it is an 
American effort, it is easier to be dismissed as Israel's best 
friend, as kind of a scold, rather if it is a broad 
international effort. And, of course, Israel would be part of 
that, too, maybe with targeted cuts, maybe with holdings that 
could be released when certain benchmarks were met.
    That, I think, would put the Palestinians in a different 
mindset about how they are pursuing an indefensible policy, and 
the world, their neighbor, their various donors, are calling 
them to end it.
    Senator Murphy. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cardin?
    Senator Cardin. To Senator Murphy's point, the United 
States is looked upon globally as the leader on these types of 
issues. I think us taking action here could have a broader 
impact than just this one particular circumstance of payments 
to prisoners and terrorists.
    So I think it is clear U.S. leadership by taking a very 
definitive action here that could very well help us. The United 
Nations could help us with other countries. And it could help 
the Israelis in their messaging and their cooperation with the 
Palestinians. So I think it is an important step.
    I just really wanted to comment, Mr. Chairman, and thank 
our witnesses. I think your testimony has been extremely 
helpful.
    As I think was clear, prior to today's hearing, there has 
been lots of conversations as to how we can make this 
legislation more effective in accomplishing our objective of 
putting maximum pressure on the Palestinian Authority to change 
its policy.
    I want to thank the chairman, and I want to thank Senator 
Graham, for their openness in reaching out to get legislation 
that can enjoy broad consensus support in the United States 
Senate. I think we are very close to achieving that.
    I would just ask our two witnesses to please feel 
comfortable to respond to legislation that will be coming out 
of this committee. We very much value your input.
    The Chairman. I agree. We thank you both. You are both 
outstanding public servants and continue to help us with 
national security and foreign policy issues. We appreciate you 
being here.
    Senator Cardin, we have already been talking with them 
about legislation, and we will continue to do so.
    Mr. Force, thank you so much for being here and for your 
continued efforts to ensure that other young people do not have 
the same fate of your outstanding son.
    With that, if you would respond to QFRs, which we will keep 
open until the close of business on Friday, as promptly as you 
can, my sense is we will be moving very soon on this 
legislation.
    The Chairman. We would not be able to do so without the two 
of you being here.
    And, of course, Mr. Force, you continue to do what you are 
doing.
    With that, thank you, all. And the meeting is adjourned.
    [Whereupon, at 11:44 a.m., the hearing was adjourned.]


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