Six lawmakers, three Republicans and three Democrats, urged Secretary of State Marco Rubio and Treasury Secretary Scott Bessent to work with Israel and the Palestinian Authority on mechanisms that would keep clearance revenues flowing while preventing funds from reaching terrorist organizations
A bipartisan group of six members of Congress warned the Trump administration on Wednesday that a fiscal collapse of the Palestinian Authority could create an opening for Hamas and other Iran-backed groups, and urged Washington to work with Israel to preserve the West Bank economy without weakening safeguards against terrorist financing.
The effort is being led by Reps. Brad Schneider (D-Illinois) and Craig Goldman (R-Texas), who serve as co-chairs of the Congressional Abraham Accords Caucus. The letter was also signed by Republican Reps. Ann Wagner and Gus Bilirakis, and Democratic Reps. Debbie Wasserman Schultz and Jimmy Panetta.
“The United States must confront and degrade terrorist organizations like Hamas and other Iran-backed actors that threaten US interests and our allies, but we must not unnecessarily destabilize the West Bank in the process,” Schneider said.
“A functioning Palestinian economy promotes greater stability and increased possibility for progress towards peace,” he added, calling on the United States to work with Israel and the PA on reforms that would allow clearance revenues to continue flowing while disrupting terrorist financing.
US Reps. argue West Bank stability central to American foreign policy
Goldman similarly framed the issue through the lens of Israeli security.
“Supporting Israel’s security and defeating terrorist groups is central to America’s foreign policy,” he said. “Economic instability in the West Bank risks creating a vacuum that Hamas and other Iranian-backed terrorist organizations could exploit, further threatening Israel’s security and undermining regional peace and integration.”
In their letter to Rubio and Bessent, the lawmakers said a fiscal crisis weakening the PA would create “exactly the kind of vacuum” Hamas and other Iran-backed actors seek to exploit for recruitment, weapons smuggling and the erosion of security cooperation with Israel.
The lawmakers stressed that they recognize Israel’s legitimate security concerns since October 7 and are not calling on Israel to ease its vigilance against terrorist financing.
However, they warned that the continued withholding of billions of dollars in clearance revenues collected by Israel on behalf of the PA risks accelerating a broader fiscal collapse.
Such an outcome, they wrote, “would serve the interests of extremist and Iran-backed groups, not Israel, nor the United States.”
They urged Rubio and Bessent to work with Israel and the PA on “practical, security-conscious mechanisms” that would allow clearance revenues to reach legitimate Palestinian institutions while ensuring that none of the funds are diverted to terrorist financing.
At the same time, the lawmakers placed responsibility on the PA to continue reforms and anti-corruption measures, arguing that such steps are necessary for Israel to adopt what they described as responsible fiscal policies.
The letter also addressed the PA’s February 2025 decree restructuring its prisoner-payment system. The lawmakers noted that the State Department had welcomed the move as an apparently positive step, while also making clear that serious questions remain over whether the reforms satisfy the Taylor Force Act, which Congress passed in response to the PA’s so-called “pay for slay” system.
They praised the Trump administration for refusing to presume that the PA had complied with the law before sufficient evidence was presented.
Is the PA heading towards an economic crisis?
The lawmakers also warned against disruption to correspondent banking relationships between Israeli and Palestinian banks. They noted that the State Department had welcomed Israel’s extension of indemnification through the end of 2026 and had cautioned that destabilizing regulated banking channels could push transactions into cash and other unregulated systems, making efforts to combat money laundering and terrorist financing more difficult.
Despite what the lawmakers described as the PA’s “significant shortcomings and flaws,” they argued that it “remains the only current viable governing alternative to Hamas” and therefore must play an essential role in regional stability and security.
A PA fiscal collapse, they warned, would weaken security cooperation, disrupt essential public services, marginalize pragmatic Palestinian leadership in the West Bank and create additional openings for Hamas and other extremist groups.
The six lawmakers concluded by asking Rubio and Bessent to continue efforts to preserve the viability of the West Bank economy while demanding accountability from Palestinian institutions.
They also requested a classified briefing when Congress returns to Washington on the progress the administration has made on the issue over the summer.