The White House said Tuesday that President Obama would sign a bill allowing additional sanctions against Moscow, as officials warned that Russia’s economy is on the “brink of crisis.”
“If I were chairman of President Putin’s council of economic advisers, I would be extremely concerned,” Jason Furman, who holds that position in the Obama administration, told reporters at the White House.
{mosads}The new sanctions legislation comes as the value of Russia’s currency, the ruble, has collapsed in recent weeks alongside a dramatic fall in the price of oil, Russia’s top export.
Furman said Russian leaders had “only bad choices,” as they weigh increasing interest rates — and constraining the domestic economy — or allowing the ruble to continue to depreciate on the international stage.
On Monday, Russia’s central bank announced it would raise its key interest rate from 10.5 percent to 17 percent — the largest single increase since 1998, preceding a government default on its debt. It was the sixth interest rate increase this year by Russia.
“I think they are facing a very serious economic situation and it’s a serious economic situation that is largely of their own making and largely reflects the consequences of not following a set of international rules,” Furman said.
The United States and Europe have implemented penalties on Russia’s energy, financial and military sectors following Russia’s incursions into Ukraine.
On Tuesday, White House press secretary Josh Earnest said the president would sign by week’s end new legislation that imposes new penalties on Russian weapons exports and oil production imports. The legislation also targets Moscow’s national energy company if it withholds supplies from European states, and makes rolling back sanctions more difficult.
The White House had not previously said whether the president would sign the bill, signaling some concern that the unilateral steps could cause tensions with European allies that could be exploited by Moscow.
Earnest said Obama opted to sign the legislation because it “does preserve the president’s flexibility” to decide when and how to impose the new penalties.
Still, the White House spokesman acknowledged “it does send a confusing message to our allies because it includes some sanctions language that does not reflect the consultations that are ongoing.”
Obama has faced pressure from lawmakers in both parties to sign the new sanctions bill.
Before the White House’s announcement Tuesday, Republican senators made a new push to get Obama’s signature on the bill.
“He needs to sign it,” Sen. Bob Corker (R-Tenn.), ranking member of the Senate Foreign Relations Committee, told The Hill Tuesday.
“We worked very closely with the administration to get the language so they would not hold it on the floor, so to now veto it would be a big breach,” Corker said.
Sen. Kelly Ayotte (R-N.H.) said in a statement that the time is right to show Moscow that the U.S. means business when it comes to defending its European allies.
The administration also said Tuesday it was not concerned that the fallout from the Russian economy could hurt the U.S. Furman noted that exports to Russia represented only one 10th of 1 percent of U.S. gross domestic product.
“A world in which nations around the world are abiding by rules is one that is, you know, in our economic interest as well,” Furman added. “So I think the bringing about a return to that will ultimately be good for the U.S. economy.”
The White House also said the administration believed falling gas prices were, on the whole, a benefit to the U.S. economy, with lower energy prices offsetting the market instability caused by the declines.
“On balance, this is definitely a positive, but we’re certainly monitoring both sides of the ledger,” Furman said.
Updated at 8:38 p.m.