Sanctions possible by the new year

Congress could move ahead with economic sanctions against Iran in a matter of weeks, with a final bill passing before the winter recess, according to recent reports.

That sanctions bill could include a gasoline embargo, a move that might be perceived by Iran as an act of war (and which at least one oil company CEO says is unworkable).

Iran has clearly spent the last week baiting the West to take exactly this step. Iranian president Mahmoud Ahmadinejad ordered his nuclear scientists to draft a plan for building ten new uranium enrichment facilities. Several lawmakers threatened to back out of the Nuclear Nonproliferation Treaty. Ali Larijani, the parliament speaker, said Iran would reconsider its diplomatic relations with the countries that supported last week's IAEA censure resolution -- which Ahmadinejad has dubbed illegal.

Brash rhetoric -- but little of it is substantial. Experts say Iran doesn't have the capacity to build new enrichment plants; lawmakers are unlikely to back out of the NPT, fearing the diplomatic consequences.

Still, Iran's provocations seem to be having the desired effect, with Congress warning of sanctions and Barack Obama talking about deadlines and think tankers hinting at military action.

We've speculated before about what drove the regime to thumb its nose at the West. On one level, there's a very real sense of aggrievement at the "P5+1" countries' perceived lack of respect for Iran's right to enrich uranium. But there are also strategic considerations: As one Obama administration official said over the weekend, Iran might be trying to goad the U.S. into pushing too quickly for international sanctions. China would certainly reject tougher sanctions; Russia might. The myth of "P5+1 unity" would be shattered.

Other considerations drive the regime's behavior, though. Splits within the government certainly play a role. Ahmadinejad skipped a meeting earlier this week aimed at creating "political unity"; former president Ali Akbar Hashemi Rafsanjani, a sometime-critic of Ahmadinejad's, also failed to attend. (Less than one-sixth of the 199 invited guests showed up, in fact.)

Rafsanjani did say today that Iran's political factions should unite in the face of "foreign pressure" over the nuclear program.

The ongoing subsidy reform debate also surely plays into Ahmadinejad's calculus, and into Ayatollah Ali Khamenei's. We've covered this story before, so I'll spare you a rehash, but if you're new to the debate, the New York Times did a good summary earlier this week.

Suffice it to say that Ahmadinejad -- who actually has a sound economic case for phasing out subsidies! -- finds himself beset by criticism on all sides. A confrontation with the West is a useful way to distract an Iranian public that's increasingly focused on subsidy reform.

After a year of contentious debate, it seems like the issue of economic sanctions against Iran could come to a head in a matter of weeks.

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