The New York Times had some terrible news recently from the West Bank and Gaza. It reported on a World Bank study which showed that if Israel continues to withhold revenues from the Palestinian Authority, and donors reduce international aid, the Palestinian economy would shrink 27 percent this year. Unemployment would rise to 40%, and 67% of the population would be living beneath the poverty level. By 2007, unemployment would hit 44%, with 72% living beneath the poverty level. These numbers are hard to fathom until one realizes how the average American's standard of living would be affected if suddenly both wage earners in a family had their salaries drastically curtailed or terminated. That is precisely what soon will be happening to Palestinian families in which one parent is a teacher whose salary is being "deferred" and the other is one of the soon-to-be-laid-off 140,000 government workers (supporting 900,000 dependents). Most Americans subjected to such conditions would quickly slip into poverty. As for their politics, poverty - especially when perceived as inflicted from the outside - is unlikely to move anyone in a moderate direction. In 1932, when US unemployment was at 25%, Americans were, according to FDR himself, on the verge of communist revolution. MEANWHILE, HERE in Washington, legislation to cut off virtually all aid to the Palestinian Authority is moving ahead - although a lot less smoothly than its supporters expected. In the House, the Lantos-Ros-Lehtinen bill seems to be stalled at about 150 co-sponsors despite heavy lobbying designed to gain the magical 218 (a majority). Veteran observers who have seen these election-year pushes for Palestinian-bashing measures achieve a House majority in a matter of days are surprised at the bill's plodding progress. The Senate's companion measure, the version the Israelis prefer and which is marginally more moderate, also is not doing well. At a recent hearing, Senator Dick Lugar, chairman of the Senate Foreign Relations Committee, told the panel that "until the new Palestinian government is formed and its policies and roles are clarified, US policy should maintain sufficient flexibility to take advantage of opportunities to exert influence on the Palestinian Authority or elements of it." He was joined by Sen. John Sununu (R-NH) who effectively deconstructed the McConnell-Biden bill, demonstrating that, unless significantly amended, it would not serve US interests. Sununu said the bill would curtail America's ability to moderate the situation. The chief witness at the committee session was James Wolfensohn, former head of the World Bank and for the last year the Quartet's special envoy for disengagement. He told the committee that a way must be found to keep assistance flowing to the Palestinian people or chaos would erupt in the territories. "I do not believe you can have a million starving Palestinians and have peace," he said. He implored the senators to take more time to devise ways to come up with means to bypass Hamas but still get the aid to the Palestinian people. THE GOOD news is that the draconian punitive measures pending in both Houses do not seem on the fast track to passage. The bad news is that it is an election year here in the US and many in Congress believe that the lobbyists pushing these measures are representative of the pro-Israel community at large. They are not. Nor do Israelis support legislation that will, in Wolfensohn's words, produce "a million starving Palestinians." They are, after all, the people who will have to live with the terrorism mass poverty will help produce which is precisely why, as the Forward recently reported, top Israeli government officials are telling Congress to slow down. At the hearing, Lt.-Gen. Keith W. Dayton, the Bush administration's security coordinator in the region, seemed in tune with the Israeli view that so long as terrorism does not break out, the post-Hamas situation is not quite as dire as some would have it. "The Palestinian leadership - Fatah, Hamas, and others - are themselves, on a daily basis, seeking to sort out their relationships to one another and their short-term and long-term goals, as well as the options they have to advance these objectives. They are doing all this with an eye to the regional and international context and how it impacts their relationships with outside actors, especially Israel. Caution has prevailed so far." Dayton also reminded the senators that the Hamas victory changed some aspects of US policy but not the fundamentals. "We are here because it remains profoundly in the US national security interest for us to be involved in the search for peace and progress toward the two-state vision. The Hamas victory has not changed that." Nor has it changed the fact that "what happens in the Israeli-Palestinian situation has profound implications for the rest of this difficult neighborhood" (read "Iraq" with its 130,000 US troops). Lives are on the line. Palestinian lives, Israeli lives and American lives as well. This is no time for politics as usual. At long last the US Congress seems to be getting the message. The writer is the director of policy analysis for the Washington-based Israel Policy Forum.