How America Lost Its Leverage on Iran

Ten years ago, two senators, one Republican and one Democrat, joined together to force America to sanction Iran. In the years since, the leverage they built has dissipated. Why?

A view of the nuclear power plant in Bushehr, southern Iran, in 2010. IIPA via Getty Images.

A view of the nuclear power plant in Bushehr, southern Iran, in 2010. IIPA via Getty Images.

Observation
Nov. 23 2021
About the author

Richard Goldberg is a senior advisor at the Foundation for Defense of Democracies. He has served on Capitol Hill, on the U.S. National Security Council, as the chief of staff for Illinois’s governor, and as a Navy Reserve Intelligence Officer.

Next week, President Joe Biden will send his envoys back to Vienna for yet another round of indirect talks with Iran. This will be Iran’s first multilateral engagement over its nuclear program since President Ebrahim Raisi took office in August. But while the cast has changed, the Iranian script remains the same as it was when negotiations began during Barack Obama’s first term: buy time to stabilize an economy freed of the burdens imposed by U.S. sanctions enforcement, obscure its clandestine nuclear activities from international inspectors, and secure future pathways to nuclear weapons.

Without an unexpected change in direction, it should come as no surprise if, in the months ahead, we learn of an Israeli airstrike on Iran’s nuclear facilities—or that Iran has tested a nuclear weapon. But for those in Congress who still hold out hope that Iran’s nuclear program can be dismantled through coercive diplomacy, the window for taking action is closing fast. A showdown in Congress about whether to preserve any economic leverage over Tehran may soon emerge from Biden’s diplomatic foray in Vienna. The results may leave America with only two options: military action or a nuclear-armed Iran.

 

This month marks the tenth anniversary of one of the most impressive foreign-policy accomplishments in the history of the Senate. Facing the ever-growing threat from Iran’s nuclear program, alongside the regime’s continued sponsorship of terrorism and accelerated ballistic-missile development, two U.S. senators—the Republican Mark Kirk and the Democrat Robert Menendez—introduced an amendment to the annual defense bill that would impose sanctions on the Central Bank of Iran. The sanctions would attack the economic lifeblood of the Islamic Republic—its oil export revenue—and cut the country off from the international financial system.

At the time, the price of oil hovered above $100 a barrel. The Obama administration fiercely opposed the amendment, fearing it could cause gas prices to spike in an election year and alienate U.S. allies that purchase Iranian crude. But Kirk and Menendez secured a unanimous vote in favor of the amendment.

Years later, President Obama would credit these sanctions with bringing Iran to the table to negotiate what would become the 2015 Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). President Trump would then restore these sanctions and add new ones, in what his administration termed a “maximum-pressure” campaign, but it was the Menendez-Kirk amendment that forced other countries to cease importing oil from the Islamic Republic, dramatically reducing the regime’s accessible foreign-exchange reserves.

Rather than use the current sanctions to force Iran into a “longer and stronger” version of the JCPOA—in the words of Secretary of State Antony Blinken—the Biden administration has during these last nine months rolled back the Trump-era economic pressure. Although some of the White House’s defenders have pointed out that the sanctions are still formally on the books, that is hardly relevant, since the Treasury Department simply hasn’t been enforcing them.

A key tool of economic pressure is what are called secondary sanctions: if an entity from a third country, such as China, buys Iranian oil, the U.S. can use these sanctions to cut off Chinese state-owned enterprises from the American financial system. But if China understands that a president will not enforce U.S. sanctions, then it will violate them. And, indeed, that’s exactly what we’ve seen this entire year as Chinese imports of Iranian oil have increased dramatically with barely a peep from Washington.

Market psychology, too, plays a role. When the market perceives that sanctions are being enforced and more are the on the way, a regime like Iran enters a downward economic spiral from which it cannot escape. When the market perceives no more sanctions are coming and that sanctions may not even be enforced, the spiral is replaced with a flywheel—and the economy stabilizes. Biden, moreover, has also provided billions of dollars to Iran in direct sanctions relief, dramatically expanding its ability to use previously inaccessible foreign-exchange reserves to repay foreign debts and to import any goods that could conceivably be defined as “humanitarian” or “COVID-related.”

In short, there is no maximum economic pressure in place today. There hasn’t been since January. The failure to coax concessions out of Iran isn’t a result of an overreliance on sanctions, but of their underutilization.

Ten years on, America needs another Menendez-Kirk moment.

 

A return to the JCPOA, which the Biden administration professes to be its primary objective, would not prevent an Iranian bomb. The nuclear pact guaranteed Tehran pathways to advanced centrifuges, stockpiles of weapons-grade uranium, and nuclear-capable missiles within a few short years. It did not put Iran’s nuclear program “in a box,” as Biden’s advisers suggest, but rather on a slow and steady glide-path to the threshold of nuclear weapons. Iran essentially agreed not to race to a bomb—but to get paid instead to walk calmly toward it over a decade.

During the last year, however, Tehran has raced forward, rapidly expanding its nuclear activities while enjoying Biden’s sanctions relief at the same time. The regime heads to the Vienna talks with a key objective: maintain its nuclear advances and receive sanctions relief at the same time.

That’s essentially what President Biden’s proposed “Plan B” would deliver. National Security Advisor Jake Sullivan has already signaled that the goal is no longer to return to the JCPOA, and certainly not to achieve a “longer and stronger” deal, but simply to come to some agreement with Iran. Whatever the details, such a deal is apt to involve further easing of the Menendez-Kirk sanctions on Tehran’s central bank in exchange for Iran modestly curtailing its now vastly expanded nuclear program. In short, Iran gets more money to retain a more threating nuclear program. The arrangement might be characterized as interim, temporary, or a bridge to a longer, stronger deal. But once Iran gets more cash and banks its nuclear progress, the odds that it will become a nuclear power before the end of this decade increase significantly.

The administration’s claims that the JCPOA or some other kind of limited nuclear deal would “put a lid” on Iran’s advance to the bomb are deceptions. A lid atop a container with no sides doesn’t contain. Absent a credible threat of military force, and without unrelenting political and economic pressure, the clerical regime will carry the international community on its back, slowly but surely, all the way to the finish line: a test of a nuclear weapon.

 

To its critics on the left, maximum pressure was a recipe for war, perhaps even intentionally so. Sanctions would eventually meet with a violent response from Tehran, which would in turn provoke a military response from Washington. According to some of these critics, Trump’s talk of using maximum economic pressure to set up a negotiation with Iran over an agreement that was tougher, more comprehensive, and more enduring than the 2015 accord was just a ruse; the administration knew the mullahs would never accede to its conditions, and merely sought a pretext for military intervention.

On the right, some hawks saw the maximum-pressure campaign in the exact opposite light. Economic and political pressure alone, they argued, could never deter the Islamic Republic. Deterrence requires Tehran to believe that the United States is truly on the verge of using overwhelming military force to put the regime in jeopardy. And that belief can only result from a demonstration of Washington’s willingness use force, starting with a rollback of the Iranian military presence throughout the region. In this view, maximum pressure was the politically expedient way for Trump to satisfy his isolationist base while talking a tough game. These critics also worried that Trump’s vision of leveraging maximum economic pressure for a “better nuclear deal” would ultimately lead the president to legitimize and empower an evil and dangerous regime.

Both camps were wrong—at least in that they misunderstood the intention of the framers of maximum pressure. Economic warfare was conceived of as part of a strategy involving political and military power as well as covert action to turn the screws on Iran, based loosely on the approach Ronald Reagan used to defeat the Soviet Union. In practice, the economic element of the maximum-pressure campaign became its defining feature, but the entire strategy could only work if the United States were willing to use force as a last resort: to defend U.S. interests if ever attacked and to destroy nuclear and missile sites if red lines were crossed.

The Iranian response to this approach tested American resolve on two fronts. Starting in June 2019, weeks after Trump’s sanctions sent Iranian oil exports plummeting toward zero, Iran opened a two-pronged counter-pressure campaign: terrorist attacks against U.S. forces and allies, and incremental expansion of its nuclear program.

Trump did not respond militarily that June when Iran shot down an American drone. Nor did he defend Saudi Arabia three months later when its oil infrastructure was attacked. Nor did any retaliation come in the wake of Iranian mine and drone attacks on maritime shipping that same year. This passivity led to a fatal miscalculation in Tehran: that Trump was a Twitter tiger, that Iran would pay no price for continued violence, and that such violence could ultimately erode public opinion back in the United States, forcing Trump to pull back on the maximum-pressure campaign. Trump closed the door on that illusion when he ordered the killing of Qassem Suleimani.

After firing off a salvo of ballistic missiles that left no Americans dead, the Islamic Republic stood down. World War III did not start. The mullahs had executed a face-saving counterattack for propaganda purposes but were unwilling to risk further escalation. And while Iran kept producing more low-enriched uranium than the JCPOA allowed, it refrained from producing highly enriched uranium until it was clear that Trump, by then on his way out of office, was handcuffed from taking military action.

The conclusion from these years is clear: the regime may be made up of religious ideologues irrationally obsessed with the United States and Israel, but the mullahs at their core still fear anything that might threaten their survival. They know they can’t win a conventional war against the United States. And they act accordingly.

 

Today, it’s hard to imagine that Iran’s supreme leader believes President Biden is willing to use military means to prevent Tehran from crossing the nuclear threshold. Biden’s failure to respond forcefully to an Iran-directed attack on a U.S. base in western Iraq that left an American contractor dead was a reversal of Trump-era doctrine of defending American forces and interests. Even this past month, Biden declined to retaliate after an Iran-directed drone strike against U.S. forces in Syria. Combined with continued sanctions relief, the lack of a credible military threat invites miscalculation and adventurism by the mullahs—both on the nuclear and terrorism fronts.

In August 2013, 77 senators sent a letter to then-President Barack Obama urging him to “reinforce the credibility of our option to use military force” against Iran to deny the regime nuclear weapons. They demanded “a convincing threat of the use of force that Iran will believe,” and concluded that the U.S. “must be prepared to act, and Iran must see that we are prepared.”

The first signature on the letter: Robert Menendez, the current Democratic chairman of the Senate Foreign Relations Committee. But also on the list: now-Senate Majority Leader Charles Schumer, Elizabeth Warren, Chris Murphy, Jack Reed, Kirsten Gillibrand, Richard Blumenthal, and many others.

Legislators should deliver the same message to President Biden along with a clear defense of the Menendez-Kirk sanctions architecture.

The Central Bank of Iran, the National Iranian Oil Company, and the National Iranian Tanker Company are all currently subject to U.S. terrorism sanctions for their financing of Iran’s Revolutionary Guard Corps. It makes little sense to lift sanctions on these entities and allow them to funnel money into terrorist groups in exchange for mild concessions that neither end Iran’s sponsorship of terrorism nor permanently dismantle its nuclear weapons-related infrastructure.

Ideally, Congress should pass a law to prevent President Biden from lifting any terror-related sanctions until Iran has ceased all sponsorship of terrorism—and to establish rigorous oversight and accountability for enforcement. This would keep the Menendez-Kirk amendment fully intact and maintain significant economic leverage for the United States to negotiate something better than Biden’s Plan B.

Even if that’s not possible due to a lack of bipartisan support, members of Congress—and those running for president in 2024—can send a clear message to importers, banks, investors, insurers, and shippers: there is no evidence these institutions have changed their terror-supporting ways; U.S. sanctions will soon return with a vengeance; and investigations will be launched into anyone who did business with Iran’s Terror Inc. while Joe Biden was president.

 

Noting the loss of American leverage, the lack of an American military threat, and the potential for more Iranian escalation in the weeks ahead, Israel has launched a rather public effort to signal that it is developing its own military option against Iran. Its military is budgeting for preparations for a strike on the Islamic Republic, and sources tell the media the IDF will begin rehearsing various scenarios next year.

The moves feel a bit hokey coming from a military that built up its mystique by operating with a “show don’t tell” philosophy. Indeed, these pronouncements have a distinctly political flavor—especially in the context of the razor-thin majority of the fragile governing coalition and the desire to project strength vis-à-vis Tehran while Benjamin Netanyahu (who billed himself as Mr. Iran) leads the opposition. And President Biden might not mind a little Israeli saber rattling, believing it helpful to empower the negotiation of his disastrous Plan B nuclear arrangement.

No one truly knows the Israeli red line for military action, although there’s little doubt that it’s approaching much faster than America’s. The Israelis believe the U.S. military has the luxury of waiting longer because of its capabilities for penetrating deep underground mountain-covered facilities. The “zone of immunity” for nuclear-weapons capability, therefore, comes much sooner for Israel than it does for the United States.

The conventional wisdom posits that Israel has long maintained the military capability to degrade Iran’s nuclear program but not to destroy it. That may or may not be true. As evidenced by its Hollywood-style covert actions in recent years, the Mossad has deeply penetrated the inner sanctum of the Islamic Republic, gaining an unknown treasure trove of intelligence along the way. Through a combination of bombs, electronic warfare, cyberattacks, and sabotage, the Israeli Air Force, Mossad, and Unit 8200 (Israel’s National Security Agency) might well be able to do considerable damage to Iranian nuclear infrastructure. Whether it can destroy it, rather than just set it back, remains an open question—as does whether it can reach Iran’s under-the-mountain enrichment facility near the holy city of Qom.

The Abraham Accords raise the possibility that Israel would no longer have to worry about the air-to-air refueling challenges that a sustained aerial bombing campaign would present, since Israeli jets could land on Arab desert airfields for quick refueling. Jerusalem, in recent days, expressed interest in buying America’s latest bunker-buster, a 5,000-pound bomb that can be launched from an F-15 fighter. The Biden administration should approve that request—and Congress should support it.

But Israel shouldn’t have to do the world’s dirty work. A nuclear-threshold terror-sponsoring regime with long-range missiles presents a grave threat to American national security. And while more creative and bolder than the American military at times, the IDF is no match for the power of the United States.

Mark Kirk was defeated for re-election in 2016. But Menendez is still there, and now the chairman of the Senate Foreign Relations Committee. We need another Menendez-Kirk moment a decade after the last. Who will stand up and take on the mantle?

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More about: Iran, Iran nuclear program, Israel & Zionism, Joseph Biden, Politics & Current Affairs