Thursday
Jul302009
Senate Weighs Economic Sanctions Against Iran
Thursday, July 30, 2009 at 4:35PM
By Learned Foote- Talk Radio News Service
The Senate Committee on Banking, Housing, and Urban Affairs is weighing the possibility of levying economic sanctions against Iran. During a hearing on Capitol Hill Thursday, the committee discussed ways to prevent Iran from obtaining a nuclear weapon.
Nicholas Burns, a professor at Harvard University's Kennedy School of Government and former State Department official during the Bush administration, said that Iran’s hotly contested presidential election has compromised the power of its government, and that America “should seek to diminish its strength further.” He said that “Americans should seek to maintain our position as the dominant power in the Middle East, because our influence is positive in that region, and Iran’s is not.”
Burns said that President Obama has generally followed former President’s Bush “basic strategy” by trying to end the nuclear weapons project in Iran through negotiations before applying “draconian” economic sanctions. He said that he did not believe negotiations alone will successfully end Iran’s nuclear program, but said that financial, economic, and energy sanctions would be more effective.
Dr. Suzanne Maloney, a Senior Fellow at the Saban Center for Middle East Policy at the Brookings Institute, discussed the economic outlook in Iran. She said the country faces “serious economic problems: double-digit inflation, power shortages, a tumbling stock market, stubbornly high unemployment rates,...increasing dependence on volatile resource revenues, and perhaps most ominously for the Iranian leadership, a rising tide of popular indignation about economic frustrations.”
The panelists agreed that unilateral sanctions will not be effective unless other countries join in sanctions against Iran. “We alone in the United States don’t have the capacity to cripple the Iranian economy with our sanctions,” said Maloney. She argued that “multilateral steps represent the only real alternative to a negotiated solution.”
Testifying before the committee, Sen. Joe Lieberman (I- Conn.) praised an amendment added to the Defense Authorization bill, which passed last week. The amendment places a time limit on how long Iran would have to respond to U.S. requests for negotiation before sanctions would be imposed.
“This bill will basically say to companies worldwide who are selling gasoline to Iran, who are shipping it to Iran, or who are insuring or financing those shipments, you got a choice to make. You can continue what you are doing with Iran, or you can do business in the United States of America. You cannot do both,” said Sen. Lieberman. He said that the amendment would not force President Obama to act, but would grant him the authority of enacting economic sanctions.
Sen. Lieberman said that the amendment had bipartisan support. “No matter what may divide us on other issues, we are very united in our concern, our anger about the Iranian program of nuclear weapons development,” he said. “The greatest threat to peace is for Iran to get a nuclear weapons capability.”
The Senate Committee on Banking, Housing, and Urban Affairs is weighing the possibility of levying economic sanctions against Iran. During a hearing on Capitol Hill Thursday, the committee discussed ways to prevent Iran from obtaining a nuclear weapon.
Nicholas Burns, a professor at Harvard University's Kennedy School of Government and former State Department official during the Bush administration, said that Iran’s hotly contested presidential election has compromised the power of its government, and that America “should seek to diminish its strength further.” He said that “Americans should seek to maintain our position as the dominant power in the Middle East, because our influence is positive in that region, and Iran’s is not.”
Burns said that President Obama has generally followed former President’s Bush “basic strategy” by trying to end the nuclear weapons project in Iran through negotiations before applying “draconian” economic sanctions. He said that he did not believe negotiations alone will successfully end Iran’s nuclear program, but said that financial, economic, and energy sanctions would be more effective.
Dr. Suzanne Maloney, a Senior Fellow at the Saban Center for Middle East Policy at the Brookings Institute, discussed the economic outlook in Iran. She said the country faces “serious economic problems: double-digit inflation, power shortages, a tumbling stock market, stubbornly high unemployment rates,...increasing dependence on volatile resource revenues, and perhaps most ominously for the Iranian leadership, a rising tide of popular indignation about economic frustrations.”
The panelists agreed that unilateral sanctions will not be effective unless other countries join in sanctions against Iran. “We alone in the United States don’t have the capacity to cripple the Iranian economy with our sanctions,” said Maloney. She argued that “multilateral steps represent the only real alternative to a negotiated solution.”
Testifying before the committee, Sen. Joe Lieberman (I- Conn.) praised an amendment added to the Defense Authorization bill, which passed last week. The amendment places a time limit on how long Iran would have to respond to U.S. requests for negotiation before sanctions would be imposed.
“This bill will basically say to companies worldwide who are selling gasoline to Iran, who are shipping it to Iran, or who are insuring or financing those shipments, you got a choice to make. You can continue what you are doing with Iran, or you can do business in the United States of America. You cannot do both,” said Sen. Lieberman. He said that the amendment would not force President Obama to act, but would grant him the authority of enacting economic sanctions.
Sen. Lieberman said that the amendment had bipartisan support. “No matter what may divide us on other issues, we are very united in our concern, our anger about the Iranian program of nuclear weapons development,” he said. “The greatest threat to peace is for Iran to get a nuclear weapons capability.”
Obama Proposes New Economic Recovery Measures
President Barack Obama discussed his administration’s plans to continue accelerating economic recovery Tuesday at the Brookings Institute in Washington, D.C. Obama suggested that growth will occur through tax cuts and incentives for small businesses, continued investment in American infrastructure, and job creations through clean energy investments.
The measures, at least in part, would be funded by money saved from the Troubled Asset Relief Program, a program which allowed the U.S. government to purchase assets and equity from troubled financial institutions in order to trigger economic growth after the financial collapse. Administration officials say TARP cost about $200 billion less than expected.
“We are going to wind down [TARP],” Obama said. “There has never been a less loved or more necessary program. It was flawed… but today has served its original purpose and at a much lower cost.”
["This] gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street,” Obama added.
However, senior administration officials noted that the administration has not determined the minimum costs of the proposed programs, and at a press conference this morning, House Minority Leader John Boehner (R-Ohio) said Obama’s announcement indicates a “Stimulus 2,” being paid for with TARP money that Boehner says, “was to go to the deficit.” Boehner said the idea of spending money that was intended to be in excess, is “repulsive.”
Obama said that the programs would eliminate a tax on capital gains from new investments in small business stock for one year and expand on the 75 percent exclusion in the Recovery Act. The small business measures would also create a tax cut for small businesses to encourage new hiring next year, and would continue giving companies enhanced expensing provisions through 2010, allowing them to instantly expense up to $250,000 of qualified investments.
Besides investments in bridges, roads and infrastructure, the new economic programs could provide new incentives for consumers who invest in energy efficient retrofits for their homes.
Following the President's speech, top Economic Adviser Christina Romer and Labor Secretary Hilda Solis told reporters during a conference call briefing that the measures align with the administration's continuing plans to end the recession.
“This really is an evolution,” Romer said. “We had done important actions early in the administration to heal the economy...the Financial Stability Plan, the Recovery Act (ARRA), our housing program.”
Romer added that as indicated in Obama’s speech, today’s announcement of tapping into TARP funds isn’t “a sum total of everything that we are considering.” The economic advisor said congressionally extending ARRA provisions is also being considered.
As far as unemployment benefits that are expected to end this month, Solis promised that there will be a discussion on the Hill about extending unemployment insurance and extending certain ARRA provisions that would be applicable.