The Cable

Kerry, White House Beat Back New Iran Sanctions… For Now

When it comes to the Obama administration's controversial nuclear pact with Iran, it's White House 1, Congress 0.

Lawmakers from both parties teed off on the agreement Tuesday, deriding it as naïve, misguided, and the beginning of the end for the punishing economic sanctions that have forced Tehran to the negotiating table. Rhetoric aside, though, the administration seems to have blunted -- at least for now -- a Senate Banking Committee push to impose new sanctions on Iran while the talks continue. That's a major win for the White House, which has repeatedly warned that putting new punitive measures in place now would derail the current negotiations with Tehran and scuttle the interim deal that was signed in Geneva late last month. 

"The president and Secretary Kerry have made a strong case for a pause in Congressional action on new Iran sanctions, so I am inclined to support their request and hold off on Committee action for now," said Senate Banking Committee Chairman Tim Johnson, whose panel has been weighing legislation designed to choke off Iran's remaining oil sales. The House overwhelmingly passed its own version of the bill earlier this year.

In another boost for the White House, efforts to include a new Iran sanctions amendment in a "must pass" Pentagon funding bill appear unlikely to succeed. The provision in the National Defense Authorization Act (NDAA) that had been under consideration would impose additional punitive measures on Iran if the current talks failed. "That ship has sailed, and there is no possibility of sanctions being included in the newer, paired down version [of the NDAA]," said a Congressional aide familiar with the effort. 

Publicly, the administration's position appeared far more precarious Tuesday. Secretary of State John Kerry, testifying before Congress for the first time since the agreement was announced, faced criticism and tough questions from both Republican and Democratic members of the House Committee on Foreign Affairs. The opponents said White House was giving Iran too much relief from the current sanctions without getting Tehran to stop all uranium enrichment or begin dismantling its nuclear infrastructure.

"The deal does not roll back Iran's nuclear program, but instead allows Tehran to keep in place the key elements of its nuclear weapons-making capability," said California Republican Ed Royce, the chairman of the panel.

Kerry said the deal would force Iran to get rid of its stockpiles of highly enriched uranium and open its nuclear facilities to unprecedented international monitoring of once-secret facilities. If the talks failed, Kerry said the White House would support Congressional efforts to impose harsh new sanctions on Iran. In a testy exchange with California Democrat Brad Sherman, Kerry stressed that the administration was also prepared to use force if Iran took clear steps to renew its push for a nuclear weapon.

"Let's say that they said, ‘the hell with you, we're going forward,' and our inspectors see what they're doing," Kerry said. "We have the absolute capacity deployed now to deal with that if we have to from a military point of view which they know we have and will not invite.  And we could not only terminate those facilities but we could obviously set back that program for some time." 

Many of the testiest exchanges focused on whether the current pact -- which gives Iran roughly $7 billion in sanctions relief -- would begin to unwind the wide-ranging punitive measures that are currently lashing the Iranian economy. Sherman and other critics noted that the value of the Iranian riyal had risen sharply since the deal was announced and pointed to reports that Iran's oil minister has begun courting holding conversations with European energy firms about investing in the country's oil fields and launching other joint projects if the current restrictions are lifted.

Republican Rep. Ileana Ros-Lehtinen of Florida, a fierce critic of the deal, said the pact marks the "death knell on the sanctions program as we know it." 

Kerry disagreed, arguing that current measures meant that Iran would lose $30 billion in oil revenues over the course of the six-month pact, far more than it stood to gain in the temporary sanctions relief.

Only one of the lawmakers at the hearing seemed to come out in open support of the administration's pact with Iran, but even critics like Royce and Ros-Lehtinen didn't explicitly endorse the various proposals for imposing harsh new sanctions on Iran while the current talks continue.

Still, the White House isn't out of the woods just yet. 

Senator Bob Menendez, the chairman of the Senate Foreign Relations Committee, and Illinois Republican Mark Kirk, the author of the hardest-hitting current sanctions legislation, are working on a new bill that would require the White House to give Congress a formal certification every month that Tehran was keeping up its part of the Geneva pact.

If the White House conceded that Iran wasn't abiding by the agreement, the bill would take away the sanctions relief and make new efforts to target Iran's mining and constructions sectors. As with other sanctions bills, foreign companies or financial institutions would be barred from doing business in the U.S. if they were found to be violating the restrictions.

"Menendez and Kirk have pretty much reached a deal, just dotting I's and crossing T's and this point," a Senate aide said.

A similar measure being drafted by House Majority Leader Eric Cantor drew the initial interest of Illinois Rep. Steny Hoyer, the No. 2 Democrat in the House, but Hoyer has gone silent on whether he would back the legislation. If the Cantor bill fails, the White House would notch another victory in its drive to keep Congress from meddling with the current nuclear pact.

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The Cable

Kerry Begins Iran Sales Job

Secretary of State John Kerry signed a landmark nuclear pact with Iran late last month. On Tuesday, he'll try to sell the deal to a skeptical Congress.  It won't be easy.

President Obama and his top aides have spent weeks making the public case for the agreement in speeches, TV interviews and addresses to influential think tanks. Kerry's appearance before the House Committee on Foreign Affairs will mark the first time a senior administration official faces lawmakers who have been harshly critical of the pact since it was announced in Geneva on November 24th -- and who are now looking for ways of rewriting it.

The White House says that the pact freezes or rolls back the key elements of Iran’s nuclear effort in exchange for roughly $7 billion in temporary relief from the punishing Western sanctions on Iran. Congressional critics, including the leadership of the House committee that will question Kerry Tuesday, argue that the deal gives Iran a significant economic boost without requiring Tehran to halt uranium enrichment or dismantle its nuclear infrastructure.

California Republican Ed Royce, the chairman of the House Foreign Relations Committee, is one of the most prominent opponents of the deal, which means that Kerry could be in for a tough ride Tuesday when he testifies before the panel.

"Under the agreement, the international community relieves the sanctions pressure on Iran while its centrifuges continue to enrich uranium," Royce said in a written statement. "This hearing will be an opportunity for committee members of both parties to press Secretary Kerry to explain why the Obama administration believes this sanctions-easing agreement is the right course."

GOP aides expect Republican members of the panel to ask Kerry to detail precisely what nuclear-related activities will be halted or slowed under the deal. In particular, they are likely to point to Iranian Foreign Minister Javad Zarif's recent comments that Iran would freeze nuclear-related work at its Arak plutonium reactor but continue construction there. Excavation and other modest construction work at the site isn't expressly prohibited by the new nuclear pact, but Royce and other critics have seized on the remarks as proof that Tehran is already trying to walk back a key concession.

Other lawmakers are likely to press Kerry about reports that Iran's oil minister has begun courting holding conversations with European energy firms about investing in the country's oil fields and launching other joint projects if the current restrictions are lifted. Last week, Italian oil company Eni and other European oil companies met with Iranian officials on the sidelines of an OPEC meeting in Vienna to discuss future prospects in the country. American companies haven't yet followed suit, but the enthusiasm of European companies could help critics argue that the deal is already eroding the bite of the sanctions and strengthening Tehran's position.

Iran-related hearings are always politically contentious, but Kerry's diplomatic outreach on Capitol Hill will have significant real-world impact as well. The White House is desperately trying to keep Congress from imposing new sanctions on Iran during while talks towards a broader nuclear pact continue over the next six months.

In a strange bedfellows alliance, both the administration and the government of Iranian President Hassan Rouhani argue that any new punitive measures would scuttle the current deal and end the negotiations towards a final pact before they even really got underway.

Obama, speaking to the Brookings Institution Saturday, said that key U.S. allies might begin to lift the current sanctions on their own if there was a perception that Washington wasn't willing to engage in serious talks with the Iranians.

"One of the things we were always concerned about was that if we did not show good faith in trying to resolve this issue diplomatically, then the sanctions regime would begin to fray," Obama said.

Kerry will amplify that argument during his time on Capitol Hill this week, but it's not clear if his efforts will get much traction. Influential lawmakers in the House and Senate are crafting measures that would impose hard-hitting new sanctions on Iran in six months if the current talks don't result in a deal. Despite White House objections, New Jersey Democrat Bob Menendez, the chairman of the Senate Foreign Relations Committee, and other powerful Democrats have expressed support for the bill. The House version has drawn the support of Majority Leader Eric Cantor of Virginia.

Kerry has been winning plaudits for his ability to sit down with a longstanding American adversary like Iran and finalize a deal that had eluded negotiators from both countries for more than decade. Defending the pact on Capitol Hill this week will put those diplomatic skills to the test once again.

Jamila Trindle contributed to this report.

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