Political blog

A Republican effort Tuesday to cut off U.S. loans to some companies doing business with Iran will bring Congress deeper into the fray over the U.S. response to the Iranian elections.

Rep. Mark Steven Kirk, R-Ill., said the amendment was aimed at Reliance Industries, a large energy company based in India that reportedly has provided Iran with as much as a third of its refined petroleum. He will offer the measure when the House Appropriations Committee takes up the draft bill on Tuesday.

The amendment to the draft fiscal 2010 State and foreign operations appropriations bill will give members their first chance to vote on binding Iran policy since that countrys presidential election June 12.

“This will be the first vote on a substantive issue with regard to Iran since the election imploded,” Kirk said.

The House and the Senate adopted separate measures (H Res 560, S Res 193) on June 19 supporting the post-election protests that have engulfed Iran, but those resolutions are simply statements of Congress and have no force of law.

Kirk worked Monday with Nita M. Lowey, D-N.Y., chairwoman of the State-Foreign Operations Appropriations Subcommittee, to draft language they both could support. Final details were unclear, but Kirk aims to block the U.S. Export-Import Bank from extending loan guarantees to companies that supply gasoline to Iran.

Many Republicans have argued that President Obama should offer more support for the protesters and should criticize Irans rulers; Democrats have largely stuck by his initial decision to avoid direct criticism to avoid being blamed by the regime for the unrest, although he has more recently criticized the Iranian government as violent and unjust.

“As theyre shooting kids in Tehran, this is not the time to provide taxpayer funding for a facility helping [Iranian President Mahmoud] Ahmadinejad ease his gas shortage problem,” Kirk said.

Although Iran is a large exporter of oil, the country lacks refining capacity and must import as much as 40 percent of its gasoline, a situation those arguing for tougher sanctions have sought to exploit.

Kirk said the companys role in providing a large share of Irans refined petroleum makes it a target. “We think it would be good for Reliance just to choose not to do business with Iran,” he said.

The Export-Import Bank provides loan guarantees for companies overseas to buy U.S. goods and services. The bank has provided Reliance with two loan guarantees totaling $900 million, including a $500 million guarantee to build the worlds sixth-largest refinery in Jamnagar, India.

“It struck me as a little strange that were going to hamstring American companies in the middle of the worst recession in decades,” said Patrick Disney, legislative director at the National Iranian American Council.

Potential Side Effects Opponents say that the language would do little to block gasoline imports and would end up hurting both Americas image in Iran and U.S. companies that would be penalized by the measure. Bechtel Corp. and Dow Global Technologies are involved in the refinerys construction.

The funds for the Jamnagar project have already been disbursed, but if the amendment is retroactive it could apply to that and other past transactions and potentially undermine confidence in the Export-Import Bank, critics say.

However, he noted, the bills nuances are not likely to translate to the Iranian street. “The perception will be U.S. Congress imposes harsh new sanctions to destabilize the Iranian economy, ” he said.

He offered another reason to back his plan: “Our amendment is a go because AIPAC supports it,” he said, referring to the American Israel Public Affairs Committee, a leading pro-Israel lobby, which confirmed that it did back the measure.

The refinery would not provide gasoline to Iran, according to the bank, but Kirk waved aside that issue. “I think nuances like that fall on deaf ears as the situation has come apart in Iran,” he said.

It would provide $7.7 billion for global health programs, including $5.7 billion for activities aimed at combating global HIV and AIDS, $110 million more than Obama requested, according to Lowey; about $700 million would go to the Global Fund to Fight AIDS, Tuberculosis and Malaria.

State and Foreign Operations The appropriations bill would provide $48.8 billion for the State Department, foreign military and economic aid, the U.S. Agency for International Development (USAID) and related programs.

Lowey said the bill would include language clarifying that the legislation would make no changes to restrictions on funding for abortions overseas.

Obamas election has eliminated one source of friction that usually accompanies the annual spending bill: a fight over overseas abortion. In January, Obama overturned the so-called Mexico City policy, which blocked funding from groups that perform or promote abortion overseas. Republican and Democratic presidents have taken turns imposing and repealing the policy, respectively, since it was announced in Mexicos capital in 1984.

The bill would also require a report from the State Department on implementation of sanctions against Iran, which have never been fully exercised.

The measure contains funds for 1,000 new employees at the State Department and 300 at USAID.