The president is working his way up the escalation ladder, but not quickly enough.
The president is working his way up the escalation ladder, but not quickly enough.
F or months, the White House pledged that a Russian invasion of Ukraine would be met with crippling economic sanctions intended to isolate Moscow from financial markets. So after Russian president Vladimir Putin launched a brutal assault on the country, the Biden administration started to implement measures targeting Russia’s ability to wage war. “Now he and his country will bear the consequences,” Biden pledged at the White House today.
Will Russia actually face significant consequences? The president laid out a relatively forward-leaning sanctions package this afternoon, announcing steps to punish Russian banks and state-owned firms and impose costs on certain parts of Russia’s technology sector in conjunction with U.S. allies. That built on a relatively significant step taken earlier this week to prohibit U.S. entities from trading in Russian sovereign debt.
But observers noticed a number of significant omissions, which are particularly glaring because Biden told reporters today, “We have purposely designed the sanctions to maximize the long-term impact on Russia and to minimize the impact on the United States and our allies.”
For one, Biden decided against steps that would effectively block Russia from SWIFT, the Belgium-based financial intermediary platform used around the world, amid European opposition to such a move. Although the U.S. doesn’t administer the system, and although some European leaders oppose blocking Russia from it, its leadership abides by Washington’s sanctions measures.
Lawmakers almost immediately called on Biden to block Russia from SWIFT after the press conference, even though he claimed that his administration’s moves to target Russian banks today might be more consequential than barring them from the platform. These lawmakers included Senator Bob Menendez, chairman of the Senate Foreign Relations Committee.
But even though the bank sanctions, which the Treasury Department says target “all of Russia’s largest financial institutions and the ability of state-owned and private entities to raise capital,” are significant, the White House has still pulled its punches.
By failing to target the entirety of Russia’s financial sector, the White House left open the possibility that the Kremlin could shift assets between institutions, according to Marshall Billingslea, a Trump-era Treasury official, who raised the possibility on Twitter.
There’s another potential sanctions-evasion trick that today’s moves left the door open to.
“While these sanctions are a step in the right direction, they’re nowhere near maximum pressure,” a senior Republican aide told National Review, pointing to Treasury’s announcement of the move, which does not include sanctions targeting foreign entities that continue to do business with the Russian banks. This source said the lack of these secondary sanctions is effectively a loophole through which Russian banks could continue to do business with Chinese firms and therefore maintain some access to the U.S. dollar.
Secondary sanctions on Russian banks is a top priority for congressional Republicans, with Jim Risch — Menendez’s GOP counterpart — pledging this afternoon to introduce the NYET Act (Never Yielding Europe’s Territory), which calls for secondary sanctions, next week. Representatives Michael McCaul and Mike Rogers, the top Republicans on the House Foreign Affairs and Armed Services Committees, in a statement this afternoon echoed that call, saying that Biden should use secondary sanctions to make Russia a “pariah.”
The largest group of conservative lawmakers in the House, the Republican Study Committee, meanwhile, issued a list this afternoon of all the other steps that the administration could be taking but currently has refrained from.
“Biden must cripple Russia’s wartime economy and send a message to Dictator Xi and the rest of the world: If you launch a full-scale, illegal invasion, America will make it as costly as possible,” reads a Republican Study Committee memo obtained by National Review, responding to Biden’s latest sanctions announcement.
The House conservative group, which is the Republican conference’s de facto policy shop, urged sanctions on Russia’s energy sector, as well as on Putin and his inner circle, the Russian central bank, and oligarchs identified by Russian dissident Alexei Navalny’s organization. The RSC also wants to designate Russia as a State Sponsor of Terrorism and accelerate efforts to arm Ukraine with anti-tank and anti-aircraft missiles.
The committee also called for an approach that might be a non-starter for the Biden administration: jump-starting fossil-fuel production and imports to reduce U.S. reliance on Russia. “Biden must alleviate harm to American consumers by reversing his war on domestic production and returning America to energy independence,” the RSC memo said.
That would be a wholesale departure from the administration’s current energy agenda. The Republican Study Committee called on the president to reverse his revocation of the permit for the Keystone XL pipeline, revoke his moratorium on drilling on federal lands, reverse EPA regulations on waterways and ethanol, and withdraw from the Paris climate accords.
In the months leading up to the invasion, top U.S. officials said they would immediately impose the most severe possible measures on Moscow for an invasion of Ukraine. That invasion has since begun, teeing up what’s likely to shape up as a deadly, brutal, and intractable conflict.
Instead of racing out of the gate with the most punishing possible measures, Biden has opted for a gradual approach designed to calibrate the U.S. response to each Russian escalation. “They are profound sanctions,” Biden said about the actions he announced today. “Let’s have a conversation in another month or so to see if they’re working.”