Inside the Iran sanctions debate

The House is set to pass Rep. Howard Berman’s Iran sanctions bill today, only the latest in a long string of moves that will help set the administration up for a switch to the "pressure track" next year.

But the real action over Iran sanctions behind the scenes is focused on Sen. Chris Dodd‘s package of Iran sanctions bills, which is currently the subject of negotiations between the administration and key senators. The administration’s concerns over the Dodd bill were outlined in this letter, first reported by The Cable, which asked for a delay in passing the Senate bill until next year.

Interestingly, the administration didn’t send Berman any letter and didn’t even bother to copy him on the Senate letter, which was specifically requested and then addressed to Berman’s Senate counterpart, John Kerry.

The feeling in Congress, multiple sources told The Cable, is that all parties concerned see today’s House action as only the latest in a long series of negotiations about how Iran sanctions might materialize. Also, as is often the case, the Berman bill is likely to undergo significant changes after passage, particularly when it goes to conference and has to be reconciled with whatever the Senate and the administration negotiate.

"Everybody is excited, but hold your horses," said one Hill source. "This has to be thoroughly vetted before it goes to Obama’s desk."

That will be a tough fight for House conferees, considering that they will be negotiating against both the Senate and the White House with the implicit and omnipresent message about the Senate bill being, "This is what we can get passed and signed."

Moreover, there’s a recognition inside the system that the House version of the bill, as stands, has some provisions that are seen as problematic. For example, the Berman bill would mandate some sanctions that are optional under current law, which the administration fears would raise trade and WTO compliance issues.

Specifically, regarding third countries’ complicity in complying with the sanctions, the Berman bill would expand their obligation from having to act on "actual knowledge" of violations, to penalizing countries that have "constructive knowledge" of violations — in other words, holding them to account for things they should know or should have known.

There are other players on the field as well. Insurance companies and other firms that could be affected are sure to lobby for safe harbor within the sanctions regime through their American subsidiaries.

There is also a dispute over strategy within the Senate negotiators among those pushing for sanctions. Some Senate offices, such as that of Joseph Lieberman, are said to be amenable to pushing back the Senate bill until next year, seeing that as the most pragmatic way to get the legislation signed.

Other offices, such as that of Jon Kyl, are said to be pushing a harder line, wanting to make more political hay out of the issue now by resisting administration calls for a delay.

Either way, when the Berman bill passes later today, while many will be cheering it as a victory, the insiders know that the game has just begun.