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White House Position Against Sanctions Again Under Scrutiny as Showdown Looms

A potential showdown between the White House and Congress over sanctions on Iran is refocusing attention on tensions within the Obama administration’s opposition to imposing new financial pressure on the Islamic republic. Journalists and analysts had very early begun to question the White House’s stance that while past sanctions had coerced the Iranians into coming to the negotiating table by endangering the country’s economy, new sanctions would push them away. Associated Press reporter Matthew Lee had pressed State Department Spokesperson Jen Psaki on the point in late October, asking at a daily press conference “wouldn’t it be logical that once you’ve got them to the table, adding more pressure would help and would make them more willing to compromise.” December analysis published by Mark Dubowitz, executive director at the Foundation for Defense of Democracies (FDD), evaluated that Iran badly needs the financial relief offered by the Joint Plan of Action (JPA) signed in Geneva, the upshot being that Iranian threats to walk away from the table were bluffs.

If Iran walks away from the table, new congressional sanctions are passed, and the international sanctions coalition holds, Iran’s economy will suffer significantly. A recent economic analysis by the Foundation for Defense of Democracies and Roubini Global Economics estimates that new sanctions could precipitate a major trade shock that leads to a significant depreciation of Iran’s currency, which will fuel inflation and asset bubbles, force fiscal austerity, and send Iran back into a deep recession.

The Treasury Department subsequently did issue new designations against entities suspected of violating sanctions against Iran. In response the Iranians left but then returned to talks. Politico tonight published analysis by Jonathan Schanzer, FDD vice president for research, assessing that the temporary Iranian departure was a “poorly played bluff,” that Tehran is “desperate for the sanctions relief the JPA is slated to provide,” and that the White House may therefore have trouble convincing lawmakers that Congressional moves to pass delayed sanctions are sufficient to derail negotiations.

[Photo: Gary Newport / YouTube]