Roughly a week after Russian forces first entered Ukraine, the White House joined lawmakers Thursday in pursuing another round of steep punishments — hoping to strike deeper at the heart of the Kremlin and Russia’s now-embattled economy.
The flurry of economic penalties — those levied and those perhaps on the horizon — have not curtailed Russia’s continued advance. The humanitarian situation has worsened, with the United Nations’ refugee agency estimating that 1 million people have fled the destruction. Russian President Vladimir Putin, meanwhile, remained defiant in the latest round of negotiations, leaving French officials fearful that “the worst is yet to come.”
The Kremlin’s obstinance has emboldened its fiercest critics in the United States to forge ahead more aggressively. Along with new sanctions, the Biden administration on Thursday requested $10 billion in fresh aid to bolster Ukraine’s defenses and shore up NATO allies. And lawmakers began to discuss ways to follow the new funds with other proposals, including measures that might limit Russian trade or empower the U.S. government to enforce its economic directives more effectively.
“We want him to feel the squeeze,” White House press secretary Jen Psaki said of Putin at her daily press briefing, describing the president’s strategy. “We want people around him to feel the squeeze.”
With the vise only tightening, the Russian economy continued to feel the sting of the world’s unprecedented rebuke. The value of the ruble plummeted to less than one U.S. cent earlier this week. The Russian government remained unable to tap a large portion of its $640 billion in central bank reserves, denying it a lifeline to skirt the impact of global sanctions. And the country soon faced a downgrade of its credit ratings to junk status, as Moody’s Investors Service and Fitch Ratings each highlighted the effect of sanctions and other penalties on Russian’s financial health.
In the United States, meanwhile, the Dow Jones industrial average was down nearly 100 points by the end of trading Thursday, and oil prices remained volatile, with a key benchmark at one point hitting its highest price per barrel since 2008. For Americans, the geopolitical tumult also coincided with rising costs at the gas pump: Prices reached $3.72 per gallon, according to a national average from AAA released Thursday, marking an uptick of 11 cents since Monday.
Biden had for weeks explicitly warned about the prospect of economic blowback as he sought to rally the nation in a swift, united condemnation of Russian aggression. Speaking to the nation Tuesday during his first State of the Union address, he cast the financial burdens as an unavoidable cost of holding Russia to account for a war without cause. The president also used the speech to highlight efforts already underway to cut off Russia’s largest banks from the international financial system, for example, while “choking off” the country’s access to technology in a way that might “weaken its military.” And Biden in the process essentially signaled more to come.
“In the battle between democracy and autocracies,” the president said, “democracies are rising to the moment and the world is clearly choosing the side of peace and security.”
U.S. prepares to expand financial attack on Russian oligarchs, aiming to freeze billions held by Putin allies
The latest round of penalties arrived two days later, as the Biden administration announced it would expand its sanctions on Russian oligarchs, further taking aim at Putin’s close-knit, elite network.
The new sanctions targeted the likes of Alisher Usmanov, the owner of an iron and steel conglomerate who Forbes has estimated to be worth more than $15 billion. The White House said that Usmanov’s property will be blocked from use in the United States, including his superyacht and his private jet, which is one of Russia’s largest privately owned aircraft.
In addition to Usmanov, the administration also announced sanctions on Dmitry Peskov, who serves as Putin’s press secretary, and Nikolai Tokarev, a longtime associate who is also the president of Transneft, a state-owned pipeline company that is responsible for transporting 90 percent of the oil extracted in Russia, according to the Treasury Department. The administration further imposed visa restrictions on 19 oligarchs and 47 of their family members and close associates.
“These individuals, part of President Putin’s inner circle, have enriched themselves at the expense of the Russian people, and their support has facilitated Putin’s war of choice against Ukraine,” Secretary of State Antony Blinken said in a statement Thursday, referring broadly to the oligarchs targeted by the new sanctions.
The flurry of new asset freezes and other penalties came a day after the White House imposed sanctions on Belarus, a key Russian ally, along with Kremlin-aligned defense companies. The president this week also set in motion the creation of a new entity at the Justice Department, known as “Task Force KleptoCapture,” to coordinate efforts to enforce sanctions against “corrupt Russian oligarchs.”
“I don’t believe this is going to be the last set of oligarchs,” Psaki predicted at her press briefing Thursday, in a sign that additional sanctions are under consideration. “Making them a priority and a focus of our individual sanctions is something the president has been focused on.”
Biden administration requests $32.5 billion in Ukraine aid and coronavirus funds as spending talks continue
On Capitol Hill, meanwhile, Democrats and Republicans found rare unity in debating a slew of measures to assist Ukraine and take aim at Russia for its invasion. They accompanied their calls for sanctions and trade restrictions with new requests, including a push to target cryptocurrency, fearing that it might allow Russia to evade international accountability.
“Crypto takes the sting out of sanctions,” Sen. Elizabeth Warren (D-Mass.) said at a hearing Thursday. “Cracking down on crypto is a critical piece of holding Russia accountable for its aggression. We can’t fool around any longer. We need to get new crypto rules in place.”
Other Democrats and Republicans appeared to rally around a new request from the Biden administration to deliver roughly $10 billion in aid that would bolster Ukraine’s defenses, respond to regional humanitarian concerns and assist NATO allies throughout Europe. Leaders for the two parties have explored adding the emergency money to a still-forming bill to fund the government, which Congress is rushing to enact before the end of next week to avert a federal shutdown.
A bipartisan group of lawmakers led by Rep. Tom Malinowski (D-N.J.) unveiled legislation allowing the Biden administration to confiscate oligarchs’ wealth and put it toward rebuilding Ukraine. And still another camp of lawmakers began to coalesce around a potential import ban targeting Russian oil. The prohibition attracted high-profile political support early Thursday from House Speaker Nancy Pelosi (D-Calif.), who told reporters at her weekly news conference: “I’m all for that. Ban it.”
Two lawmakers from energy-producing states, Sens. Joe Manchin III (D-W.Va.) and Lisa Murkowski (R-Alaska), hours later unveiled a bill that precisely aimed to cease the Kremlin’s crude oil and petroleum shipments to the United States. At an event on Capitol Hill announcing the measure, Manchin fretted that “energy has been weaponized” in the conflict, adding of the new proposal targeting Russia, “We have the ability to basically counter that weapon.”
So far, Washington has largely spared Russian oil from the same punishing sanctions it has imposed in other areas of its economy. The United States imported an average of about 198,000 barrels of Russian oil per day in 2021, according to federal estimates, enough to prompt some experts to warn that a new blockade could hit gas prices in the United States at a moment of intensifying inflation.
For its part, the White House on Thursday signaled it is open to cutting back on U.S. imports of Russian oil. But Psaki sought to walk a fine line: She said Washington does not have a “strategic interest” in reducing global energy supply, which could raise gas prices domestically, yet she signaled the Biden administration is looking broadly at policy steps it might take to target Russia’s energy sector.
“We are continuing to look at other options we could take right now to cut U.S. consumption of Russian energy,” Psaki said. “Reducing the supply out there would have an impact on prices.”
Seeking to counter such a spike, Murkowski and Sen. Rob Portman (R-Ohio) renewed their calls for the Biden administration to lift restrictions on domestic fossil fuel production. Democrats, however, have sought in recent months to shift the country toward cleaner, greener energy alternatives, part of a broader push to combat climate change.
Some Democrats, meanwhile, have proposed a pause on the federal gas tax, which is 18.3 cents per gallon, to provide families with a financial reprieve. But Pelosi offered a reality check for those plans Thursday, telling reporters such an idea might be difficult to implement.
“That sounds good,” the speaker said, but she noted that “there is no guarantee the oil companies pass that reduction on to the consumer. And it’s very hard to write a bill that requires them to pass it on.”
Jeff Stein, Yeganeh Torbati and Ellen Nakashima contributed to this report.