By Emily Cadei, CQ Staff

The struggle between the executive and legislative branches over Iran sanctions continues this week, moving from the Senate floor to the conference room as lawmakers negotiate a final defense authorization bill for fiscal 2012.

The Senate voted 100-0 last week in favor of an amendment to the defense authorization bill (HR 1540) that would create tough new sanctions targeting Iran’s central bank and the financial firms that do business with it. Despite that resounding tally, the Obama administration is still pressing for the sanctions to be softened in conference, with Treasury Department staff sending an email to conferees requesting changes to the amendment, several senators confirmed.

“We understand the administration has submitted to your committee a list of proposed changes to the Menendez/Kirk amendment — both ‘technical fixes’ and ‘alterations,’” amendment sponsors Robert Menendez, D-N.J., and Mark Steven Kirk, R-Ill., wrote in a counterletter to the conferees. “We would note that proposals to delay sanctions implementation and water down the amendment’s penalties are not ‘technical’ in nature and should be rejected.”

The administration proposal that is causing the most heartburn among the measure’s supporters is one that would considerably broaden a sanctions exception for firms based in countries cooperating with the United States on Iran policy. Depending on the interpretation of “cooperating,” that language could be applied to almost any country in the world, boosters of the sanctions worry. Supporters of the sanctions amendment say they do not have a problem with some of the more narrow, technical changes that do not alter how the sanctions would be implemented.

In their letter, Menendez and Kirk argue that the central bank sanctions measure “is tough, responsible and, most importantly, bipartisan.  . . .  With the support of every single United States senator, it needs no alterations.”

In remarks Tuesday at a forum hosted by the right-of-center American Enterprise Institute, Kirk called the measure, which would block any foreign company that conducts transactions with the Central Bank of Iran from doing business with the American financial sector, “the last best hope for peace.” That is especially true, he said, given that the broader sanctions bill (S 1048) he and Menendez have been drafting has little hope of becoming law anytime soon.

“The Banking Committee offered to do a February markup to move forward on other sanctions legislation,” Kirk said, “but given the fact that we’re thinking that we’re on a rough 12-month clock before things become irreversible, burning up another five months” to hold hearings and mark up legislation “looks irresponsible.”

Kirk and other panelists accused the administration of lacking the proper sense of urgency on the threat of Iran’s advancing nuclear weapons program.

Undersecretary of Treasury David S. Cohen and Undersecretary of State Wendy R. Sherman pushed back hard on that assessment last week in a Senate Foreign Relations Committee hearing. They argued instead that the best way to pressure Iran and its banking system is through multilateral efforts. And they said they were worried that the threat of sanctions against international financial institutions, as well as the risk of unsettling the oil market, would damage that cooperation.

Kirk said Tuesday that such scenarios are avoidable. “We provided two waivers for the amendment,” he said. “If oil markets are too tight, you can suspend or delay these sanctions.

“And secondly, we put in a standard national security waiver,” Kirk continued.

Kirk also said that global oil production is set to increase with the ending of wars in Libya and Iraq. If the United States works “with our allies and especially the enormous swing production of Saudi Arabia,” he said, an oil price spike is avoidable.

The administration faces an uphill climb in its effort to soften the central bank sanctions included in the defense authorization bill. In addition to the overwhelming vote in the Senate, the House Foreign Affairs Committee has signaled its support, approving last month by voice vote an Iran sanctions bill (HR 1905) that includes a similar measure targeting the central bank.