New York Times: The escalating American confrontation with Iran poses a major new political threat to President Obama as he heads into his campaign for re-election, presenting him with choices that could harm either the economic recovery or his image as a firm leader.
The New York Times
By MARK LANDLER
WASHINGTON — The escalating American confrontation with Iran poses a major new political threat to President Obama as he heads into his campaign for re-election, presenting him with choices that could harm either the economic recovery or his image as a firm leader.
Sanctions against Iran’s oil exports that the president signed into law on New Year’s Eve started a fateful clock ticking. In late June, when the campaign is in full swing, Mr. Obama will have to decide whether to take action against countries, including some staunch allies, if they continue to buy Iranian oil through its central bank.
After fierce lobbying by the White House, which opposed this hardening in the sanctions that have been its main tool in pressuring Tehran, Congress agreed to modify the legislation to give Mr. Obama leeway to delay action if he concludes the clampdown would disrupt the oil market. He may also invoke a waiver to exempt any country from sanctions based on national security considerations.
But using either of those escape hatches could open the president to charges that he is weak on Iran, which is viewed by Western powers as determined to achieve a nuclear weapons capability and which has drawn a tough response from Europe as well.
Republican candidates, led by Mitt Romney, have threatened to use military action to prevent Tehran from building a bomb, and have criticized Mr. Obama for not doing enough to stop it from joining the nuclear club.
“If we re-elect Barack Obama, Iran will have a nuclear weapon,” Mr. Romney declared in South Carolina in November. “And if we elect Mitt Romney, they will not have a nuclear weapon.”
Few inside the administration see a surefire way of preventing Iran from crossing the nuclear weapons threshold, though none are ready to discuss moving to a focus on containing a nuclear Iran.
The administration is deeply reluctant to use military action, and the United States strenuously denied involvement in the recent killing of an Iranian nuclear scientist. Instead, it has focused mainly on using economic pressure to make Iran pay a high price for expanding its nuclear efforts despite international sanctions.
“To appear to back off, when the Iranians are proceeding pell-mell with their nuclear program, would be very difficult for the administration, particularly in an election year,” said Stuart E. Eizenstat, a former senior official at the Treasury and State Departments who helped draft sanctions against Iran during the Clinton administration.
“On the other hand,” he said, “sanctions could harm the economy and his re-election chances. It is an excruciatingly difficult set of choices, and one he will face sooner rather than later.”
Senator Mark Steven Kirk, an Illinois Republican who sponsored the sanctions bill, along with Senator Robert Menendez, Democrat of New Jersey, added another variable to the president’s difficult calculus, arguing that sanctions may be the only thing that dissuades Israel from mounting a pre-emptive military strike on Iran’s nuclear installations.
“The first waiver would trigger a whole lot of other waiver applications, potentially gutting the policy,” he said. “The more you gut the policy, the more likely you make military action by Israel. The pro-Israel community would not want a gutting of the sanctions.”
The administration says that it plans to put the sanctions in effect rigorously, and that the modifications it negotiated with Congress will allow Mr. Obama to do so without rattling the oil market. The European Union is expected to impose its own sanctions on Iran’s oil exports next week, making it easier for the United States to carry out its measures.
Administration officials point to some encouraging signs: major importers of Iranian oil, like Japan and South Korea, are searching for alternative suppliers. And Iran’s currency, the rial, has plummeted since the sanctions were signed, raising pressure on the government.
Referring to the tense negotiations with Congress, a senior Treasury official said, “It was a question of tactics and timing, not the target.”
With his ending of the Iraq war and the killings of Osama bin Laden and other leaders of Al Qaeda, Mr. Obama has projected an air of competence on national security, and he is arguably less vulnerable in that field than previous Democratic presidents.
But trying to influence the world’s oil market is a different kind of challenge, experts say. Already, Iran’s leaders are maneuvering to drive up oil prices, whether to signal that sanctions could bring repercussions, or to mitigate the effects of reduced sales. Iran’s threat to shut off the Strait of Hormuz, through which a fifth of the world’s oil passes, sent prices soaring this month.
“Oil has to be replaced with more oil,” said Daniel Yergin, an oil expert who has written a book, “The Quest,” about energy security. Cutting off one of the world’s leading oil exporters without squeezing the overall flow of oil is an extremely complex undertaking, he said. “I’m hard pressed to think of a precedent for this,” he added.
Then, too, there is the fragile state of the economy, even with recent signs of life in the job market. An oil crisis is one of those shocks, like a collapse of the euro, that could derail the recovery. Fears about rising oil prices led the White House to oppose efforts on Capitol Hill to impose draconian sanctions against Iran’s central bank.
Treasury Secretary Timothy F. Geithner, in a letter last month to the chairman of the Senate Armed Services Committee, Carl Levin, Democrat of Michigan, said a total crackdown on the central bank could undermine the administration’s “carefully phased” approach and “yield a net economic benefit to the Iranian regime.”
But the administration found itself dealing with a rare bipartisan show of resolve. The sanctions passed the Senate by a unanimous vote, almost unheard of in today’s contentious atmosphere. The bill was attached to a crucial $662 billion military spending bill.
Under the terms of the legislation, Mr. Obama must, within 180 days, cut off access to the United States to any public or private financial institution that buys oil through the Central Bank of Iran. The goal is, effectively, to shut down the central bank, depriving the Iranian government of financing for its nuclear activities.
Mr. Obama retains two important levers: he can delay sanctions if he determines there is not enough oil in the market, and he can exempt any country that has “significantly reduced its volume of crude oil purchases from Iran.” Administration officials, seeking to preserve flexibility, said they would not quantify “significant.”
An early test of the administration’s approach will come at the end of February, when the law mandates that it cut off private financial institutions that conduct non-oil transactions with Iran’s central bank, except for the sale of food, medicine and medical devices.
Senator Kirk said carrying out the oil sanctions might be less complicated than it appeared, with Saudi Arabia pledging to step up production and with Libya and Iraq both bringing production back online. But the administration’s opposition to the original draft of his legislation, he said, belied the president’s threats to the Iranian government.
“It’s been a strange political journey for the president because he said he was tough on Iran,” Mr. Kirk said.