The Cable

McCain and Graham spell out how they’ll get around the “supercommittee”

Two top Senate GOP defense hawks laid out for The Cable how they plan to save the defense budget -- if the congressional "supercommittee" fails to reach an agreement, triggering $600 billion in defense cuts over ten years.

Sens. John McCain (R-AZ) and Lindsey Graham (R-SC) are part of a larger effort to protect the defense budget from the "sequestration" mechanism, which would automatically be activated if the supercommittee fails to agree by Thanksgiving on $1.2 trillion of discretionary spending cuts over 10 years. They sent a letter last week to the Pentagon asking for a detailed analysis of the consequences for the military if the trigger is pulled.

"The secretary of defense and all the service chiefs say that it would do irreparable damage to our national security, so obviously we need to do something about it," McCain told The Cable on Tuesday. "My intent is that sequestration on national defense will not take place."

McCain said he would introduce and support a law to undo the Budget Control Act of 2011, which codified the deal to raise the debt ceiling.

"We'll do everything we can to prevent [the trigger] being implemented," McCain said. "You can't bind future Congresses."

The threat of large defense cuts, along with a parallel trigger that would cut entitlements, was intended to be so objectionable that the supercommittee would have an incentive to make a deal. When asked, McCain rejected the idea that by undermining the trigger, he and Graham are taking pressure off the supercommittee to make the required bipartisan cuts.

"There is sufficient pressure on the supercommittee, they will not be swayed either way by our concern about sequestration of national defense," McCain said.

Graham went into more detail about what hawks will seek as a replacement for the defense trigger.

"I hope the supercommittee can do its job, but we can't just live on hope around here. So if they fail, what do we do?" Graham said. "If the committee fails, I am not going to allow the triggers to be pulled that would shoot the Defense Department in the head."

Graham said he would put forth a substitute to the triggers, "something where the whole country shares in the failure of the supercommittee, not just the Defense Department and Medicare providers."

A scrum of reporters cornered supercommittee member Sen. John Kerry (D-MA) coming out of the Tuesday Democratic caucus lunch, and your humble Cable guy elbowed his way to the front of the pack. We decided to first ask several questions about the IAEA report on Iran, to the chagrin of the other reporters desperate for supercommittee quotes.

When Kerry did turn to answering questions about the supercommittee, he said, "We've got some distance to travel and we're working very hard to do that."

Kerry said he was not "optimistic," but he was "hopeful," the super ommittee would succeed.

"Everybody's working in ... uh ... good faith," he said, with a wry grin on his face.

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The Cable

Obama administration to “study” Iran nuke report; bipartisan hawks urge decisive action

The Obama administration reacted cautiously to today's International Atomic Energy Agency report on Iran's nuclear weapons program and declined to say how exactly how they would respond. But across Washington, suggestions for tightening the noose on the Iranian regime were abundant.

"I'm definitely going to tell you we need time to study it," State Department spokeswoman Victoria Nuland told reporters on Tuesday following the release of the IAEA report, which alleges that Iran had until 2003 an intricate and extensive program to design and build a nuclear warhead to fit atop a Shabaab-3 missile. The report also stated that Iran worked on components for such a warhead, prepared for nuclear tests, and maintained aspects of the program well past 2003 -- activities that may still be ongoing today.

"I think you know the process here: that after a report like this comes out, we also have a scheduled meeting of the IAEA Board of Governors coming up on November 18th, so Iran will be an agenda item at that meeting. So we will take the time between now and then to study this," Nuland said.

In a conference call with reporters on Tuesday afternoon, two senior administration officials predicted that the Obama administration would increase sanctions on Iran in light of the report but declined to offer any specifics on what they might be.

That explanation wasn't well received by lawmakers in both parties on Tuesday, who offered plenty of specific ideas on how to ramp up pressure on Tehran and have no intention of waiting for the administration to "study" the IAEA's findings.

The Cable spoke on Tuesday with Sens. John Kerry (D-MA), Mark Kirk (R-IL), John McCain (R-AZ), and Lindsey Graham (R-SC) about the report.

"It's of enormous concern to everybody and a lot of conversations are taking place right now about how to respond," Kerry told The Cable. "It clearly means we have to ratchet up on Iran, probably tougher sanctions and other things."

Kerry declined to endorse one big idea floating around town, namely to take actions that would collapse the Central Bank of Iran (CBI) and ruin the country's currency, bringing the Iranian economy to its knees.

"There are a lot of options, you want to pick them carefully and you want to be thoughtful about what's going to be effective," Kerry said.

Kirk, who co-authored a letter in August with Sen. Chuck Schumer (D-NY) calling for collapsing the CBI, and which was signed by 92 senators, tweeted today that the White House's reaction to the report Tuesday constituted "national security malpractice."

Kirk met with White House Chief of Staff Bill Daley on Monday night to give him the "hard sell" on the idea of collapsing the CBI, he told The Cable. Kirk said that the concept under consideration is to give friendly countries that are dependent on Iranian oil -- such as Japan, South Korea, and Turkey -- a time window to shift their purchases from Iran to Saudi Arabia.

Kirk and Schumer are planning to introduce a bill soon that would be a Senate companion to an amendment by Rep. Howard Berman (D-CA) to require the president to determine within 30 days the CBI's role in Iran's illicit activities. If the president determines that the CBI is complicit, the bill would require the administration to cut off any foreign banks doing business with the CBI from participating in the U.S. financial system.

The main risk in collapsing the CBI is that it could bring down the Iranian oil industry along with it, risking a cascading effect on world energy markets that would exacerbate the global economic crisis.

McCain told The Cable today that it's a risk he is willing to take. "Libya is cranking up their oil exports. There's always risk, but there's a greater risk when you know that they're about to become nuclear weaponized," he said.

"The first thing we should do is talk to the Russians and the Chinese and tell them to get with it and pass the increased sanctions through the U.N.," McCain said, adding that the Obama has leverage against Russian and China if it chooses to use it. "Russia wants in the WTO, China wants a lot of things. There should be consequences for their failure to act."

Graham agreed that the negative impact of collapsing the CBI was a necessary cost of ramping up pressure on Iran.

"We've got make a decision: What's the biggest threat to the world, a nuclear-armed Iran or sanctions that would hurt us and the people of Iran?" Graham told The Cable. "You've got two choices, the policy of containment or the policy of preemption. I'm in the preemption camp. I don't think containment works. The only way to stop this is to prevent this and that means changing behavior."

Graham said existing sanctions don't seem to be working, which means that the sanctions regime has to be fundamentally changed. "If that doesn't work, the other option is military force." But Graham cautioned that if there were to be a military strike on Iran, it would have to include a massive assault on Iran's counterattacking capabilities.

"You'd have to destroy their air force, sink their navy, and deal with their long-range missile threat. So you'd have to go in big," he said. "If you attack Iran you open Pandora's box. If you allow Iran to get a nuclear weapon, you empty Pandora's box. So these are not good choices."

Sen. Joe Lieberman (I-CT) said in a statement that the threat of military force must be credible and he called for Congress to pass a new Iran sanctions bill, one that the administration previously said was unnecessary.

The House and Senate have each unveiled a version of the bill that would tighten existing sanctions, compel the administration to enforce penalties already on the books, and levy a host of new restrictions against members of Iran's regime and companies that aid Iran's energy, banking, and arms sectors. The bills are a follow-up to the Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA) that Congress passed and President Barack Obama signed in July 2010.

Former Treasury Department official Matthew Levitt, now a senior fellow at the Washington Institute for Near East Policy, told The Cable that there's no consensus yet inside the administration or around the world that collapsing the CBI would be possible without doing severe damage to the world economy.

But Levitt offered several things the administration can do immediately to ramp up pressure on Iran, including pressuring countries to scale back Iranian diplomatic presence in their capitals, restricting the travel of Iranian officials around the world, and setting up a multilateral customs body to enforce sanctions against Iran, modeled after what was done in wake of the Kosovo crisis.

"The administration is not being creative enough with the tools they have," Levitt said. In the coming days, he predicted, "You are going to see scrambling as to what can be done."