GOP fears new unilateral action on Iran

Republican lawmakers are sounding the alarm about the Obama administration’s plans for Iran, warning officials are on the verge of waiving tax penalties that make it harder for companies to do business in the country.

The administration has not responded to an inquiry from the tax-writing House Ways and Means Committee about whether it will waive a pair of tax penalties related to Iran, lawmakers said during a subcommittee hearing on Wednesday.

That leaves open the possibility that the White House will eliminate the penalties, GOP lawmakers said, and in doing so open the floodgates for American and foreign business profits to flow to the theocratic Iranian government.
“I would rest easy if the president said, ‘I agree with you and I have no intention of waiving these things,’ ” said Rep. Peter Roskam (R-Ill.), the head of the Ways and Means Oversight subcommittee and a critic of the Iran deal. “He’s not said that.”

“We can interpret that one way or we can interpret that another way. But I think that there’s a real opportunity for us.”

The nuclear deal — which went into effect last month — lifts international sanctions on Iran in exchange for limits on its nuclear capabilities.

Under the deal, the vast majority of American companies will continue to be barred from doing business in Iran due to a slew of existing sanctions related to support for terrorism and human rights abuses, though some foreign subsidies will be able to move in.

“For those contemplating a rush to do business with a terrorist regime, I urge caution,” Roskam said on Wednesday.

“There’s a lot of people in Congress that are going to extract a very high price for American companies or anybody else that’s trying to do business and be complicit with the type of activity that robs the life of an American hero,” he added.

GOP lawmakers said they fear Obama will act unilaterally to clear the way for more investment in Iran.

In particular, they worry that the administration will eliminate a provision that denies tax credits to companies that do business in Iran. That provision has for years exposed businesses operating in Iran to the risk of double taxation.

Republican lawmakers also fret that Obama might waive a requirement that businesses pay American taxes on any money that its foreign subsidiaries receive during operations in Iran.

Easing the tax penalties on Iran would be nearly unprecedented. Such a move has been taken only once before, when President George W. Bush in 2004 lifted similar provisions on Libya after it took steps to abandon its hunt for weapons of mass destruction.

Lifting the restrictions “would promote more companies doing more business in Iran, paying more taxes in Iran, creating more revenue for the Iranian government, and the result is allowing more resources to direct Iranian terror activities,” said Rep. Jason Smith (R-Mo.).

The White House did not respond to an inquiry from The Hill on Wednesday about whether it was considering waiving the tax penalties.

Democrats were quick to criticize Wednesday’s GOP-led hearing as a “stunt” they said was nothing more than an opportunity for Republicans to take pot shots at the nuclear agreement.

“Today is not about legislation — it’s about catch-up,” said Rep. Lloyd Doggett (D-Texas). “It’s about catch-up because we’ve had attempts to repeal the ObamaCare provisions 62 or 63 times, and we’ve only had one effort … to repeal and undermine the Iranian nuclear agreement.”

Any “intelligence” that would indicate Obama is planning to waive the provisions, Doggett added, “is about the quality of the intelligence … relied on to get us into the disaster in Iraq.”

Republicans, who have long distrusted the Obama administration, were unconvinced.

“I’m just saying that President Obama has done many things that no American president has done before,” Roskam countered. “Just because an American president has not done something before doesn’t mean that it’s off the table for President Obama.”

It remains unclear precisely what options House Republicans would have to resist a move by the administration to lift the tax restrictions on Iran.

Yet lawmakers certainly want to do something.

“It’s clearly within the order of this committee and Congress that we can strengthen these provisions so that any company, foreign or domestic, considering their options in Iran will have in the back of their mind: ‘Will the tax laws change?’ ” said Rep. George Holding (R-N.C.)

“They can certainly change in ways that can be incredibly detrimental to their business activities.”