News : Biden’s sanctions red line: Hurting Americans

Thursday, February 24, 2022

Biden’s sanctions red line: Hurting Americans

Feb 24, 2022

With help from Maggie Miller

Joe Biden delivers remarks.

President Joe Biden delivers remarks about Russia's military invasion of Ukraine on Feb. 24, 2022. | Drew Angerer/Getty Images

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President JOE BIDEN says the United States must punish Russia for its brazen invasion of Ukraine and to defend the liberal world order he so cherishes — but he made clear that domestic considerations weigh on him as he debates which financial levers to pull.

Hours after Russian President VLADIMIR PUTIN ordered a full-scale invasion of Ukraine, Biden stood at a White House podium today and announced a second round of penalties on the Russian economy. They were quite strong, namely fully or near-completely blocking Russian financial institutions like VTB Bank and Sberbank from the U.S. financial system and placing restrictions on exports of U.S. items for Moscow's forces.

Analysts said the U.S. left itself some room to escalate if need be, which it'll need as the West's strategy has shifted from deterring an invasion to preventing a much larger one. Still, the absence of crushing sanctions on Russia's main money maker — its energy sector — were curiously absent.

The reason, per a senior administration official, is that doing so now would both help Putin and hurt the United States.

"No option is off the table," the official said, but "starting out with energy could actually benefit Putin and pad his pockets. Given high oil and gas prices, cutting off Russian oil and gas will drive prices up to Putin's benefit. And as we have said repeatedly on the record, on background [and] off the record, our sanctions are designed to harm Russia's economy, not ours."

Biden emphasized that point in his address, insinuating he has American taxpayers in mind even as he tries to make Putin wince.

"I know this is hard, and that Americans are already hurting," he said. "I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me."

"But this aggression cannot go unanswered," he continued. "If it did, the consequences for America would be much worse. America stands up to bullies. We stand up for freedom. This is who we are."

Lawmakers NatSec Daily spoke to, on the left and right, said they understand the president's concerns. As the midterms approach, and with his poll numbers low, adding to the economic hardship of many Americans won't make him or his party more popular. Plus, no U.S. leader wants to actively make financial life harder for citizens.

And another complication: The U.S. wants to move in lockstep with allies, especially those across the pond, who remain reliant on energy from Russia. "It's clear there isn't consensus in Europe on sanctions against energy companies," said Rep. SARA JACOBS (D-Calif.), a member of the House Foreign Affairs Committee.

"Russia continues to hold a potential stranglehold on Europe's energy security, and the United States and Europe wanted to do all they could not to exacerbate an already concerning situation — particularly as cold weather energy needs continue — and so energy was widely viewed as off limits for this round of sanctions, excerpt for the infamous Nord Stream 2 pipeline," said JOHN SMITH, a former top Treasury sanctions official now a partner at the Morrison & Foerster law firm.

But the crisis is displaying the tensions between his desire to safeguard the postwar world the U.S. created and aims to protect, and what national security adviser JAKE SULLIVAN calls a "foreign policy for the middle class." Biden is signaling to a domestic audience, and to Putin, that he won't greatly sacrifice the health of the American people for Ukraine's cause. That will win him favor at home but raise some eyebrows around the world.

"It's clear the U.S. is willing to go far, just not that far," a senior European diplomat texted us.

The U.S., alongside Ukraine, wants to lead the revolt against Putin — but to a point. That might change if Russia pushes deeper into Ukraine or topples the government, thereby triggering even more punishing sanctions on the Kremlin, and even Putin himself.

The Inbox

UKRAINE WAR SITUATION REPORT: For the foreseeable future, we'll use this section to provide up-to-date information about the war.

— More than 40 Ukrainian soldiers were killed and dozens more were wounded, an adviser to Ukrainian President VOLODYMYR ZELENSKYY told The New York Times.

— Russian forces seized control of the Chernobyl nuclear power plant, a spokesperson for the State Agency of Ukraine on Exclusion Zone Management told CNN.

— Four ballistic missiles were launched in a southwestern direction from Belarus, per the General Staff of the Armed Forces of Ukraine, though it remains unclear what they hit, if anything.

— The Ukrainian military used Javelin missiles to damage 15 T-72 Russian tanks in Glukhov area, per the General Staff of the Armed Forces of Ukraine.

— Ukraine's Rapid Reaction Brigade shot down three helicopters out of 34 in Gostomel, the Ukrainian Armed Forces tweeted. A spokesperson later said that "20 helicopters KA-52 and Mi-8 of the Russian Federation landed at Gostomel airfield."

— Ukraine's armed forces announced the capture of Russian fighters, including "a whole reconnaissance unit" of 74 members of a Motorized Rifle Brigade near Chernihiv.

— As of 5 p.m. local time, a spokesperson for Ukrainian forces said that "the enemy was stopped" along the River Uzh in Velykyi Osnyaky and Rivne regions, where a "tank battle continues." The spokesperson also said a Russian missile cruiser is shelling Snake Island in the Black Sea.

— In the town of Happiness, the General Staff of the Armed Forces of Ukraine said they destroyed two "enemy" tanks.

U.S., NATO and European moves:

— U.S.: Biden approved 7,000 more troops to Germany, bringing the total to 12,000 sent to Europe this month. Six F-35s are on their way to Latvia, Lithuania and Estonia, a senior defense official told reporters, with two going to each country.

— Britain: Per the government, the U.S. will send two Typhoons, and a Voyager for refueling, from the U.K. to support continuous NATO air policing over Poland's border with Ukraine. Two Typhoons and a Voyager for refueling from RAF Akrotiri will also support continuous NATO air policing over Romania's border with Ukraine.

DOD: RUSSIA AIMS TO 'DECAPITATE' UKRAINE GOV: In a background call with reporters, a senior defense official said that Russia intends to "decapitate" the democratic government in Kyiv, our own PAUL McLEARY reports, underscoring one of the most chilling details U.S. intelligence has collected.

Putin's forces are "making a move on Kyiv," the official said, "basically decapitating the government and installing their own method of governance."

"What we are seeing is initial phases of a large-scale invasion," the senior defense official continued, adding the war could rage "for a long, long time to come."

"We haven't seen a conventional move like this, nation-state to nation-state, since World War II, certainly nothing on this size and scope and scale," the official continued.

Translation: This is a big war that could see the toppling of Ukraine's government in the very near future.

ZELENSKYY GOING NOWHERE: We asked a spokesperson for Zelenskyy if the Ukrainian president had an escape plan should Russian troops close in on him in the coming days or weeks. We were told, in no uncertain terms: Hell no.

There "has been no conversation about leaving the capital by the head of state, it's not being conducted," the spokesperson, IRINA, told us in a text. "The situation is far from over."

Irina said Zelenskyy continues to manage Ukraine's defenses and that "all our state structures are working." But she did reiterate Kyiv's stance that the West should impose a no-fly zone over Ukraine "so that Russia cannot bomb cities" and "maximize the price for Russia for its war."

"Our army defends Ukrainian freedom and democracy," Irina said. "But the West can now have the final say."

BIDEN PRESENTED WITH MASSIVE CYBER ATTACK OPTION?: NBC News' KEN DILANIAN and COURTNEY KUBE report that Biden has been presented with options to "carry out massive cyberattacks designed to disrupt Russia's ability to sustain its military operations in Ukraine."

"U.S. intelligence and military cyber warriors are proposing the use of American cyberweapons on a scale never before contemplated. Among the options: disrupting internet connectivity across Russia, shutting off electric power, and tampering with railroad switches to hamper Russia's ability to resupply its forces," they wrote.

Most of the options presented aim to "disrupt," not "destroy," thus falling short of an act of war, the two reported.

Western officials and analysts have long worried about the U.S. and Russia getting into a tit-for-tat escalation in cyberspace, which could ratchet up tensions higher than they already are.

The White House fiercely denied the report: "This report on cyber options being presented to @POTUS is off base and does not reflect what is actually being discussed in any shape or form," White House press secretary JEN PSAKI tweeted.

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Flashpoints

U.N. WARNS OF 'DEVASTATING' REFUGEE CRISIS: "The humanitarian consequences on civilian populations will be devastating. There are no winners in war, but countless lives will be torn apart."

That's FILIPPO GRANDI , the U.N. high commissioner for refugees, who made that statement following Russia's invasion of Ukraine. For weeks leading up the attack, Western officials and analysts warned of the likelihood of millions of refugees fleeing westward to escape the fighting. Bumper-to-bumper traffic outside of Kyiv suggests Ukrainians are already looking for a way out.

"We have already seen reports of casualties and people starting to flee their homes to seek safety," Grandi said. "We have stepped up our operations and capacity in Ukraine and neighbouring countries. We remain firmly committed to support all affected populations in Ukraine and countries in the region."

Keystrokes

UKRAINE FENDED OFF CYBERATTACKS: Ukraine fought back against cyberattacks Russian troops poured over the border today, with predicted major successful cyberattacks on Ukrainian critical infrastructure failing to materialize, our own MAGGIE MILLER wrote in.

"It was a tough night in terms of cybersecurity of Ukraine," Ukrainian Vice Prime Minister MYKHAILO FEDOROV tweeted. "We've been protecting our cyberspace all night. Ukraine is experienced and continues to counter non-stop attacks on main informational sources. As of now everything operates stable. Keep calm and don't panic."

The invasion came after two distributed denial of service attacks in the past week temporarily knocked several Ukrainian government websites offline and interrupted online operations for multiple Ukrainian banks. The Biden administration and the United Kingdom blamed Russia for the first attack last week, and Biden told reporters at the White House on Thursday that "the Russian government has perpetrated cyberattacks against Ukraine."

As Ukraine continues to guard against attacks against critical infrastructure — such as its power grid, which Russia targeted in 2015 and 2016 — the website of the Russian Ministry of Defense was not accessible for individuals based in the U.S. or several other countries. It was not clear if this was due to a cyberattack or Russia making the decision to geofence its government websites to protect against DDoS attacks from the West.

"Geofencing, if that's what they've done, ministries that would be targets, would be part of what they're thinking," said JAMES LEWIS, director of the Strategic Technologies Program at the Center for Strategic and International Studies, on Thursday. "My guess is the Russians have a plan, and they are working through the steps of the plan, some of it's defensive, some of it is offensive."

"If Russia pursues cyber attacks against our companies, our critical infrastructure, we're prepared to respond," Biden said during a speech at the White House. "For months, we've been working closely with the private sector to harden our cyber defenses, sharpen our response to Russian cyber attacks."

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The Complex

UAE TO BUY CHINESE JETS?: Our friends at Morning Defense (for Pros!) wrote about the United Arab Emirates' desire to buy Chinese warplanes — and how that could complicate future U.S. arms sales to America's Gulf partner.

"The United Arab Emirates' announcement that it intends to buy 12 Chinese L-15 training jets — and possibly 36 more — would represent a huge win for Beijing but potentially a big loss for F-35 maker Lockheed Martin," Morning D wrote. "Nothing has been signed, but the news could throw a wrench into the stalled $23 billion package for as many as 50 F-35s and over a dozen Reaper drones."

A State Department official told our own PAUL McLEARY that the F-35-and-drone deal "remains on the table" and "we remain committed to them, even as we continue consultations to ensure that we have a clear, mutual understanding with respect to Emirati obligations and actions before, during, and after delivery."

On the Hill

SCHIFF BACKS RUSSIA'S SWIFT REMOVAL: Rep. ADAM SMITH (D-Calif.), chair of the House Intelligence Committee, told reporters that he favored kicking Russia out of the SWIFT banking messaging system.

As Punchbowl's JAKE SHERMAN tweeted, Schiff is "an ally of Biden and of the democratic leadership," meaning his support for the move likely proved influential on the administration as it developed its punitive response to the invasion.

The U.S. should "cut off Russia from the international financing system and its ability to access Western capital," he told reporters, adding that this moment should mark the "final death" of the Nord Stream 2 natural gas pipeline.

"If there's any authority [Biden] doesn't have that he does need to increase sanctions on Russia, he'll get it from Congress. And I think Congress, on a very bipartisan basis, will also be willing to provide whatever resources are necessary to help Ukrainian defense," Schiff continued.

NO RUSH: Senate Majority Leader CHUCK SCHUMER told reporters in New York that senators will get a classified briefing on the Russia-Ukraine war next week, per our own BURGESS EVERETT.

That might be too late. Expect "a rapid fall of Kyiv," a European official told us.

Broadsides

RUSSIAN CELEBRITIES BLAST PUTIN: A surprising number of Russian celebrities have openly criticized Putin for enlarging his invasion of Ukraine, indicating that support for his war isn't unanimous among Russia's elites.

— MAKSIM GALKIN, a popular host on state-run TV, to his 9.3 million Instagram followers: "Can't put into words how I feel! How is this possible! There can be no justification for war! No war!"

— IVAN URGANT, who the Financial Times' MAX SEDDON says is like Russia's STEPHEN COLBERT: " Fear and pain. NO to war."

— VALERY MELADZE, a famous singer, in an Instagram video message : "Today something happened that could and should never have happened. History will judge everything one day. Now I want to beg you to stop military action and sit down to negotiate."

Notably, none of them called out Putin by name, but it's clear what and who they were referring to. Protests also sprung up around Russia, including in Putin's hometown of St. Petersburg. Hundreds have been arrested, reports indicate.

Transitions

— ALAN YU was named senior vice president for national security and international policy at the Center for American Progress. He was most recently a senior adviser to JOHN KERRY, the special presidential envoy for climate change, and served as a senior fellow at CAP.

— CAMERON EDINBURGH has joined the Center for a New American Security as a communications officer.

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

What to Read

— MARIA POPOVA and OXANA SHEVEL, Just Security: "Russia's Invasion of Ukraine Is Essentially Not About NATO"

— ALEXANDER VINDMAN, The Atlantic: "America Could Have Done So Much More to Protect Ukraine"

— RICHARD N. HAASS, The New York Times: "The West Must Show Putin How Wrong He Is to Choose War"

Tomorrow Today

— The Government Executive Media Group, 8:15 a.m.: "Doing Business with the Army — with GAYNA MALCOM-PACKNETT, MATTHEW PAUL and WAYNE SOK"

— The Atlantic Council, 8:30 a.m.: "Eight Years Occupied: The Anniversary of Russia's Illegal Capture of Crimea — with JOHN HERBST, HANNA SHELEST, OLGA SKRYPNYK and TAMILA TASHEVA"

— The Wilson Center, 9 a.m.: "Turkey's Role in the Russian-Ukrainian Crisis — MURAT MERCAN"

— The Nuclear Threat Initiative, 11 a.m.: "From Cyber Attack to Nuclear War: Avoiding Escalation through Cooperation — with CHRISTOPHER PAINTER"

Have a natsec-centric event coming up? Transitioning to a new defense-adjacent or foreign policy-focused gig? Shoot us an email at award@politico.com or qforgey@politico.com to be featured in the next edition of the newsletter.

And thanks to our editor, John Yearwood, who says the goal of his edits are to hurt us, not him.

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