Bad - the people living in Gaza and the West Bank are hurting enough as it is after half a century of occupation and fencing in and encroachment and war and Hamas and Islamic Jihad and nepotism and "reformed" terrorists like Arafat and aggressive lebensraum proponents like Ariel Sharon. Stopping the money will just hurt, and make the US look even worse with the one-two punch combination of a veto that'll be on the wrong side of history. It'll be an immoral veto.Congress had threatened to withhold aid to the Palestinian Authority for 2012 if it went ahead with a bid for statehood at the United Nations. But it turns out no one’s waiting until 2012.In recent days, lawmakers have blocked unspent portions of 2011 aid, to show their unhappiness with the Palestinian move.It’s hard to pin down exactly how much aid is affected, since different legislators have targeted different pieces of the $500 million in annual U.S. aid. But it appears that both economic aid and support for the Palestinian security forces could be affected.The Obama administration is holding “intensive consultations” with Congress to try to unfreeze the money, said State Department spokeswoman Victoria Nuland...The Palestinian government depends heavily on foreign aid to function, so the freeze will hurt — if it continues.
A veto against the legitimate needs and aspirations for self-determination by the poor, the downtrodden and the unjustly contained and corralled. Not that there's not been a more than fair share of suicide bombers targeting civilians, corrupt local politicians, extreme religious fanatics and whatnot. But that's on both sides, more or less, except on the other side it's not suicide bombers targeting civilians, it's jack-booted thugs and US-supplied warplanes and tanks and guns against ...yeah, not much at all. Snipers and some religious idiots. By all means, kill as much Hamas and Hezbollah and Islamic Jihad and people screaming for martyrs as you want - but fencing people in and encroaching on their land will just make it worse. Collective punishment doesn't work. You're just pissing off a new generation and making the recruiting easier for al-Qaeda and the Jihad boyz.
Bad - could in fact make the Palestinian Authority fall. Chaos ensues. Death and bloodshed and poverty.
Good - sets the State Dept and the Executive up as the "Good Cop" in the whole Good Cop-Bad Cop game in negotiations with a foreign (un-)power.
Good - the Palestinian Authority falling might not be such a bad thing in the medium term. Short term chaos, long term Israeli political realization that being responsible for the well being and safety and economy of 4.5 million very pissed off people is a bloody nightmare. Annexation? Sure, that'd in fact be the objectively best thing for the Palestinians. Give them all Israeli citizenship and some freedom to move, but filled with checkpoints and anti-terror measures to contain the carnage. But they don't want that. Nationalism and pride and anti-Semitism and Muslim ideology and all that.
Good - the US Congress doing this now, could conceivably give people the idea that we can do the same with Pakistan. And the same when Israel insists on continuing the whole East Jerusalem and West Bank expansionism thing. Won't happen in the case of the settlements, though it should.
But a little political fighting for/against overseas aid in Congress might not be such a bad thing always. It can help State and the Executive to be seen to be fighting for the people they're negotiating with overseas, i.e. "Hey man, you need to do this, this and that - or else there is no way I'll get this past the US Congress, you saw what happened to the Palestinian aid program, you gotta help me out here if you want the money. I'm on your side here, I believe you, I'm trying to get you this money, but if you don't make yourself look better for Congress there's nothing I can do, man."
Conclusion: both good and bad things here. Now if we could just use the same "power of the purse" to stop the settlements and reverse them and get Israel into the Nuclear Non-Proliferation Treaty framework. Then you might see peace. And a whole lot less dead American soldiers, sailors and marines in the Middle East.
R.I.P. my friends Jeff Taylor and Jon Tumlison. Good guys, they were. I kinda miss them sometimes. Wish I could've been there. Might still get the chance to go over there even though I'm all messed up, we'll see.