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SPECIAL: Update on Supplemental

On May 3rd, House and Senate conferees agreed on a compromise version of HR 1268, which includes an aid package to the Palestinians and others in the Mideast

On May 3rd House and Senate conferees agreed on a compromise version of HR 1268, "making emergency supplemental appropriations for the fiscal year ending September 30, 2005, to establish and rapidly implement regulations for State driver's license and identification document security standards, to prevent terrorists from abusing the asylum laws of the United States, to unify terrorism-related ground for inadmissibility and removal, to ensure expeditious construction of the San Diego border fence, and for other purposes."

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Summary
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1. The compromise version includes in the bill itself (bill language):

- the provision from the House and Senate versions requiring a wide-ranging new report on the PA (along the lines of a "Palestinian Authority Accountability Act")

- the Senate language making a hard earmark of $50 million for Israel for crossing points into the West Bank and Gaza

- the provision from both the House and Senate version earmarking $5 million for an additional audit of PA finances

The compromise version of the bill does NOT include House language explicitly barring the President from using his national security waiver to provide funds directly to the PA.

2. Managers' statement (explanation of Congressional intent)

the managers' statement:

- earmarks $3.5 million of the aid for the Holy Family Hospital in Bethlehem (as included in the Senate version)

- earmarks $2 million of the aid for Hadassah, the Women's Zionist Organization of America (not clear where this came from)

- asserts this bill does not provide specific direct financial support for the Palestinian Authority

- reiterates that all existing conditions and restrictions on aid to the West Bank, Gaza, and the PA apply to this aid, and that in addition, the Presidential national security waiver "shall not" be extended for aid appropriated under this act.

- sets out explicitly how the entire $200 million shall be used, states that funds may not be allocated for any other projects, permits limited reallocation between approved projects, and requires prior consultation with the Appropriations Committees for any such reallocation.

3. Other money for countries in the Middle East

- under the heading "Iraq Security Forces Fund" the bill earmarks $99 million for Jordan "to establish a regional training center designed to provide comprehensive training programs for regional military and security forces and military and civilian officials, to enhance the capability of such forces and officials to respond to existing and emerging security threats in the region"

- under the heading "Economic Support Funds" the bill earmarks $5 million for Lebanon; the Managers' statement stipulates that these funds are "for support of democracy activities and programs. The conferees expect these funds to be managed by Bureau of Democracy, Human Rights and Labor at the Department of State."

- under the heading "Economic Support Funds" the bill earmarks $100,000,000 for Jordan

- under the heading "Foreign Military Financing" the bill provides $250 million; the Managers' Statement stipulates that of this, $100 million is for Jordan

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Comment
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If the Administration's red line was ensuring that the President's waiver authority was preserved, then technically speaking the Administration has succeeded. However, the victory is mitigated by the exceptionally strong managers' statement on the issue, which makes clear that Congressional intent is that the waiver shall not apply (since this is not binding language the President could, technically, choose to ignore it). Moreover, Acting Assistant Secretary David Satterfield testified March 9th before the House International Relations Committee's Subcommittee on the Middle East and Central Asia that the waiver was needed in order to permit the kind of flexibility required to deal with a rapidly changing/evolving situation on the ground; the additional limitations imposed by the conference on how the funds may be spent - in the form of a detailed table - would appear to further erode the President's flexibility in this arena.

Finally, it is worth noting that once all the earmarks (in both the bill language and the managers' statement) are taken into account, of the $200 million this bill ostensibly provides for the Palestinians, the actual amount left to the Administration's (limited) discretion to aid the Palestinians is $139.5 million.

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Bill Text
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The final version of the bill states that:

- $200,000,000 should be made available for programs, activities, and efforts to support Palestinians, of which $50,000,000 should be made available for assistance for Israel to help ease the movement of Palestinian people and goods in and out of Israel.

- Not later than 60 days after the date of enactment of this Act, the President shall submit a report to the Congress detailing: (1) information regarding the Palestinian security services, including their numbers, accountability, and chains of command, and steps taken to purge from their ranks individuals with ties to terrorist entities; (2) specific steps taken by the Palestinian Authority to dismantle the terrorist infrastructure, confiscate unauthorized weapons, arrest and bring terrorists to justice, destroy unauthorized arms factories, thwart and preempt terrorist attacks, and cooperate with Israel's security services; (3) specific actions taken by the Palestinian Authority to stop incitement in Palestinian Authority-controlled electronic and print media and in schools, mosques, and other institutions it controls, and to promote peace and coexistence with Israel; (4) specific steps the Palestinian Authority has taken to further democracy, the rule of law, and an independent judiciary, and transparent and accountable governance; (5) the Palestinian Authority's cooperation with United States officials in investigations into the late Palestinian leader Yasser Arafat's finances; and (6) the amount of assistance pledged and actually provided to the Palestinian Authority by other donors:

- That not later than 180 days after enactment of this Act, the President shall submit to the Congress an update of this report:

- That up to $5,000,000 of the funds made available for assistance for the West Bank and Gaza by this chapter under ``Economic Support Fund'' shall be used for an outside, independent evaluation by an internationally recognized accounting firm of the transparency and accountability of Palestinian Authority accounting procedures and an audit of expenditures by the Palestinian Authority.

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Explanatory Statement
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The Joint Explanatory Statement of the Committee of Conference states that:

- "The conferees recognize the importance of adequate health care for Palestinian women and children and recommend $3,500,000 to support the activities of the Holy Family Hospital in Bethlehem and $2,000,000 to support the healthcare activities of Hadassah, the Women's Zionist Organization of America. "

- "The conferees agree that the budget request and the recommendation contained in this Act do not provide specific direct financial support for the Palestinian Authority."

- "The conferees reiterate that the conditions and restrictions on assistance for the West Bank, Gaza, and Palestinian Authority contained in the General Provisions section of division D of Public Law 108-447 apply to assistance for the West Bank and Gaza recommended under this heading, as well as the separate account requirement contained in section 529 of that law. The conferees further agree that the waiver detailed in Presidential determination 2005-10 shall not be extended to funds appropriated under this Chapter. "

- "The conference agreement includes a provision providing $50,000,000 for assistance for Israel to help improve the movement of people and goods in and out of Israel, as proposed by the Senate. The conferees are aware that infrastructure will be needed on both the Palestinian and Israeli sides of the separation lines and intend that these funds be used to meet the great need in developing this infrastructure. The resulting flow of goods and people should greatly improve the economic well-being of the Palestinian people while building the revenue base of the Palestinian Authority. "

- "The $200,000,000 provided in this account shall only be allocated as requested and detailed in the following table. The Administration may reallocate, only within the projects listed here, up to 10 percent of any of the following allocations, except that the total for the allocation receiving such funds may not be increased by more than 20 percent. Any reallocations shall be subject to prior consultations with the Committees on Appropriations."

[In thousands of dollars]

Economic Revitalization

Palestinian agriculture and agribusiness production and marketing - $15,000
Trade promotion and capacity building - 24,000
Home construction financing - 1,000
Job creation, with an emphasis on construction of schools and community centers - 20,000
Improved flow of people and goods into Israel - 50,000

Subtotal, Economic Revitalization - 110,000

Infrastructure Development
Roads and water - 50,000
Democratic reform and the rule of law - 16,000
Community Policing - 3,000
Education, including vocational training - 8,000
Health care and food assistance - 13,000

Subtotal, Infrastructure Development - 90,000

Total - $200,000,000