Why is there still so much hand-wringing at the United Nations and at the State Department about past U.S. dues? After all, the U.S. Senate recently voted unanimously, with the support of the Bush administration, to pay $582 million to the world body.

Once the full Congress approves the payment, the United States will have paid all but $244 million worth of back dues.

True, U.N. officials claim we owe considerably more--some $685 million. But this money was deliberately withheld to avoid supporting activities that are not in the interests of the United States. These include supporting the Palestinian Liberation Organization when it was engaged in terrorist activities. The United States has no intention of ever paying that bill.

But that's not the reason for all the fuss. The real problem, U.N. officials say, is that the United States will wind up owing even more money this year because U.S. law caps America's payments to the U.N. peacekeeping budget at 25 percent of the total.

This cap on peacekeeping payments--passed by a Democratic Congress and signed by President Clinton--was intended to force the United Nations to adopt a more equitable scale of assessments.

As President Clinton explained in a 1993 speech to the General Assembly: "The U.N.'s operations must not only be adequately funded, but also fairly funded...I believe our rates should be reduced to reflect the rise of other nations that can now bear more of the financial burden."

His administration argued that a fair scale would be one in which no individual nation paid more than 25 percent of the peacekeeping budget. To put that in perspective, America's 25 percent share is more than the combined payments of 175 other nations. Congress required the United Nations to honor this cap in return for the $582 million arrears payment.

Instead, U.N. officials reduced the U.S. assessment to 28.14 percent in January and will cut it to 27.6 percent in July 2001. It will gradually fall to about 26.5 percent in July 2003 and hopefully to 25 percent several years later.

Despite the fact the United States will be overcharged for quite a while, the Senate agreed to release the $582 million. Assuming the U.N. peacekeeping budget holds steady at $2.6 billion over the next four years, additional U.S. arrears from the 25 percent cap will be $74.4 million in 2001, plus an additional small amount withheld from U.N. criminal tribunals. The State Department estimates it will total $77 million.

Predictably, U.N. officials have been clamoring for the United States to remove the 25 percent cap. They say the United States must adjust our laws to comply with new U.N. peacekeeping assessments or risk falling into further arrears.

Surprisingly, Secretary of State Colin Powell has bought into these arguments, commenting that "unless this cap is revised, we will accrue new arrears" and saying we should adjust the cap to comply with the new U.N. assessment scale.

While it is true the United States will accumulate arrears on the U.N. books, it's a relatively small amount in relation to the $685 million that already has been withheld.

Moreover, the United Nations can reduce the impact of the 25 percent cap simply by following through on its promise to lower the U.S. assessment.

By 2004 the discrepancy will decline to slightly over $23.1 million. The total additional arrears would be about $180 million through 2004. With respect to Powell, history shows the United Nations resists reform and must be pressured by the only lever that has proven effective-- restricted funding.

Congress established the 25 percent cap "out of frustration with the United Nations and its waste and failure to modernize," to quote Sen. Joseph Biden, Democrat of Delaware.

The United Nations didn't consider adjusting the U.S. assessment until the United States made clear it wouldn't pay more than 25 percent of the budget, regardless of what the United Nations charges. It avoided reform until the United States refused to pay any arrears.

If the United States removes the 25 percent cap or adjust the law to comply with the U.N. assessment scale, it would remove the only remaining incentive for the United Nations to comply with the principle that its peacekeeping be "fairly funded."

The United Nations has set a schedule for reducing U.S. assessments to a "fair" level. Maintaining the cap is the best way to ensure it follows through.

Brett D. Schaefer  is Jay Kingham fellow in international regulatory affairs in the Center for International Trade and Economics at The Heritage Foundation (www.heritage.org).