In recent weeks members of Congress have written to UNESCO to let leaders of that organization know that upgrading the status of the PLO will jeopardize U.S. funding to that organization. On 10/5/11, Rep. Granger (R-TX), Chair of the Appropriations Committee's Foreign Operations subcommittee, issued a statement warning UNESCO that upgrading the PLO's status could lead to a cut-off of U.S. funding. Rep. Lowey (D-NY), ranking minority member on the ForOps subcommittee, issued a similar statement on 10/5/11.
These are not idle threats. Back in the earliest days of the peace process, when Congress was not entirely behind White House efforts related to Madrid (and subsequently Oslo), Congress passed a number of pieces of legislation intended to block normalization of Palestinian relations and activities in the international community. These included the following provision of law -- which notably does not include authority for the president to waive the requirements of the law, even in cases where vital U.S. national security interests are at stake.
22 USC 287e as amended by PL 101-246MEMBERSHIP OF THE PALESTINE LIBERATION ORGANIZATION IN UNITED NATIONS AGENCIES. (a) PROHIBITION- No funds authorized to be appropriated by this Act or any other Act shall be available for the United Nations or any specialized agency thereof which accords the Palestine Liberation Organization the same standing as member states. (b) TRANSFER OR REPROGRAMMING- Funds subject to the prohibition contained in subsection (a) which would be available for the United Nations or any specialized agency thereof (but for that prohibition) are authorized to remain available until expended and may be reprogrammed or transferred to any other account of the Department of State or the Agency for International Development to carry out the general purposes for which such funds were authorized.
A few observations are in order. First, if UNESCO were to upgrade the PLO's status, but not to a point that gave the PLO equal status (in terms of rights/privileges) to member states, 22 USC 287e would not apply. Second, even if UNESCO were to upgrade the PLO's status to the same as a member State, Congress is not simply the helpless victim of a law passed 21 years ago during a much different era. If members of 112th Congress wanted to, they could pass new legislation to amend this 22 USC 287e to avoid a cut-off in funds. Third, the chances of the 112th Congress amending 22 USC 287e to avoid a crisis at the UN are low to non-existent, despite the fact that cutting off funding to UNESCO and other UN agencies would clearly be detrimental to U.S. interests. There has been no case in memory where Congress has rescinded or amended (in any positive way) any pre-existing anti-PLO or anti-Palestinian legislation, regardless of how outdated or archaic it may have become (including at the outset of Oslo, when rather than amend or rescind anti-PLO legislation, Congress passed new laws, like 22 USC 287e, and where absolutely necessary provided the president limited authority to suspend pre-existing anti-PLO legislation).
The general sense seems to be that such legislation may one day again come in handy -- like 22 USC 287e is coming in handy now -- and that in any case, members of Congress don't earn any credit by being "nice" to the Palestinians. This is why today most things having to do with the Palestinians, including the ability to provide aid to the PA and the ability of the PLO to maintain an office in DC, require the continual issuance of presidential national security waivers. And even these waivers can be revoked by Congress at any time, as Congress is now threatening to do with the waiver that permits the PLO to keep an office in the U.S.
Fourth, given what appears to be an overwhelming view in Congress that the Palestinian effort to gain legitimacy at the UN is tantamount to a new form of terrorism against Israel, it seems likely that if 22 USC 287e didn't already exist, the 112th Congress would invent it.
Fifth, even if UNESCO and the Palestinians were to come to some agreement on an upgrade of status short of a status comparable to a member state (thus avoiding sanctions under 22 USC 287e), Congress would likely act to strengthen U.S. law to ensure that even in such a case, U.S. sanctions would apply. This is not mere speculation -- a bill has already been introduced in the 112th Congress, HR 2829, seeking to do exactly this. Section 403 of HR 2829 requires the mandatory withholding of U.S. contributions to any UN entity "that recognizes a Palestinian state or upgrades in any way, including but not limited to full membership or non-member-state observer status, the status of the Palestinian observer mission to the United Nations, the Palestine Liberation Organization, the Palestinian Authority, or any other Palestinian administrative organization or governing entity...prior to the achievement of a complete and final peace agreement negotiated between and agreed to by Israel and the Palestinians."
And finally, it should be emphasized that the U.S. funding for UNESCO that is at issue here includes funding from the United States' assessed contributions to the UN, as opposed to voluntary contributions to UNESCO. This means that if Congress and the White House determine that under the current (or some future) law, funding to UNESCO (or later on WIPO, or the IAEA) must be cut off due to that organization's treatment of the Palestinians, the U.S. will not only be removing itself from participation in a key international body, but will be in violation of its treaty obligations with respect to UN funding.