Congress

Lawmakers press Treasury to target Chinese banks over Iran

Published

55 minutes ago

August 26, 2026

A number of hawkish lawmakers on both sides of the aisle are urging the Trump administration to focus its effort to cut off Iran’s economic lifeline on one primary target: Chinese banks.

Since Treasury Secretary Scott Bessent pledged Monday to sanction Tehran’s “enablers,” one big question has been whether the White House is willing to risk taking on Beijing, Iran’s biggest trading partner.

On Capitol Hill, at least, the appetite appears to be there — particularly in terms of going after Chinese financial institutions.

“Any country complicit in providing an economic lifeline to Iran’s terrorist regime, including China, must be held accountable,” said Rep. Darin LaHood (R-Ill.), a member of the House Select Committee on China. Sanctions on Chinese banks that do business with Iran would send “a clear message to China and every other nation that enabling Tehran’s malign actions will come at a cost,” he said.

As part of the push to widen sanctions on countries with economic ties to Iran, the Treasury Department expanded its ability Monday to penalize foreign companies that operate in or support five sectors of Iran’s economy: digital assets, technology, gold, aviation and shipping.

Bessent stressed Monday the need to sanction those who “facilitate the flow of its finances” to keep the regime afloat and said “no one is above the reach of U.S. sanctions” when asked if he’s willing to sanction Chinese banks.

But the Treasury Department did not target any Chinese banks in its initial list of sanctioned entities. The administration instead targeted several Hong Kong and China-based companies implicated in illicit Iranian oil transfers and assistance with Tehran’s missile technology development program.

Bessent said Monday that he’ll sanction a major foreign financial institution by the end of the week as part of the new effort, but declined to provide details.

Going after Chinese banks would not only antagonize Beijing at a time when the U.S. is trying to hold on to a fragile trade truce with China, it also risks destabilizing the global finance sector.

That risk is one the U.S. may have to take, said Rep. Johnny Olszewski (D-Md.), a member of the House subcommittee on East Asia and the Pacific.

The administration should “hold accountable any financial institution that knowingly helps the Iranian regime evade sanctions, finance terrorism, or fund activities that threaten Americans and our allies — that includes any Chinese institution the facts show are facilitating Iran’s illicit oil trade,” Olszewski said.

That rare consensus reflects how fatigue with the Iran war — now entering its sixth month — is fueling bipartisan support for increasingly creative and aggressive moves to end it.

While President Donald Trump declared the Strait of Hormuz “very functioning” on Wednesday, ongoing Iranian attacks on shipping are throttling traffic through a waterway that was the gateway for 25 percent of global crude oil exports from the region before the war.

There are still plenty of lawmakers on Capitol Hill who are wary of provoking Beijing, including those whose districts suffered from Beijing’s freeze on agricultural imports and suspension of critical mineral exports during the U.S.-China trade war last year.

But the pressure from even some on Blue Light News to take on Chinese banks highlights a more general anger in Congress about China’s reluctance to use its influence on Tehran to push Iranian leadership toward striking a peace deal with the U.S. That’s despite Xi’s offer to “be of any help whatsoever” in ending the conflict when the two leaders met in Beijing in May.

“There is real, bipartisan frustration building on Capitol Hill” about China’s role in enabling the Iranian regime, said Jon Stivers, a former senior adviser to former Speaker Nancy Pelosi (D-Calif.) who now serves on the U.S.-China Economic and Security Review Commission.

Chinese state banks serve as conduits for transactions in which Iran sells oil to China’s “teapot refineries,” which purchase around 90 percent of Iran’s exported crude.

The transactions involve China-based smaller provincial banks that then transfer the funds to large state-owned banks that have Hong Kong subsidiaries, the U.S.-China Economic and Security Review Commission said in a November report.

The Treasury Department declined to elaborate on whether it’s in contact with Beijing on possible sanctions. “We won’t detail specific conversations with foreign counterparts,” Treasury said in a statement.

The Chinese embassy declined to comment on whether the administration is in contact with Beijing regarding possible sanctions on Chinese banks.

Beijing has called the sanctions threat “economic warfare” and hinted it’s ready to punch back.

New U.S. sanctions will “fuel tensions and lead to risk spillover, which will disrupt the global economic and financial order, and harm the legitimate rights and interests of other countries,” Chinese Foreign Ministry spokesperson Lin Jian said Tuesday.

Some lawmakers argued that the key is not to avoid sanctioning banks because of the risk, but to prepare for potential economic blowback.

“Chinese banks that help Iran evade sanctions should be held accountable, but accountability has to come with strategy,” said Rep. Haley Stevens (D-Mich.), a member of the House Select Committee on China. “We also can’t ignore the risk of Chinese retaliation — Beijing has shown its willingness to weaponize its dominance of rare earths.”

Addressing that danger should go hand in hand with sanctions on Chinese banks, said Rep. Zach Nunn (R-Iowa), a member of the House Select Committee on China.

“The bigger fight is making sure China’s Communist Party can never hold America’s supply chains hostage in the first place,” Nunn said.

The administration is likely also weighing the benefits of sanctioning Chinese banks against the risk that it may threaten Trump’s summit with China’s leader Xi Jinping in Washington next month. Bessent avoided naming “China” during his press conference Monday despite multiple questions from reporters about whether the threatened sanctions would hit Beijing.

There’s a danger that sanctions on one or more of China’s four largest state-owned banks — Bank of China, China Construction Bank, Industrial & Commercial Bank of China and Agricultural Bank of China — could spark negative ripple effects across international finance institutions. They hold an estimated $25 trillion in combined assets.

“We’ve always called it the nuclear economic weapon — to really stop the Chinese would be to hit the big banks like Bank of China — with sanctions,” said Dennis Wilder, former National Security Council director for China in the George W. Bush administration.

Bessent alluded to that risk when he said he’ll give potential sanction targets time “to remedy bad behavior” prior to possible sanctions. “Why would I want to blow up the global financial system?” he asked.

In recent years, the administration has only taken small steps toward going after Chinese financial institutions. The Treasury Department warned two Chinese banks earlier this year that they face U.S. sanctions “if we can prove that there is Iranian money flowing through your accounts,” Bessent said.

Over the last 14 years the U.S. government has imposed sanctions on two smaller Chinese banks with relatively limited links to the global financial sector. The Treasury Department targeted Bank of Kunlun for its “relationships with U.S.-designated Iranian banks” in 2012 and Bank of Dandong for enabling “illicit North Korean financial activity” in 2017, severing them from the U.S. financial system.

China’s large state banks have global operations involving debt payments and currency transfers that U.S. sanctions could disrupt. Bessent even threatened that institutions linked to money laundering for Tehran “will be removed from the U.S. dollar system.”

Those affected by U.S. sanctions on a large Chinese state-owned bank would “likely include major banks and customers in the U.S., Europe, Japan and elsewhere,” said Erik Woodhouse, former deputy assistant secretary of State for counter threat finance and sanctions.

Yet lawmakers eager to kneecap China are undeterred.

The administration “has already sanctioned Chinese refineries, shipping companies, procurement networks, and other entities that help sustain Iran’s illicit economy,” said Gus Bilirakis (R-Fla.), a member of the House Select Committee on China. “I support any efforts to expand that pressure to foreign entities providing Iran with the financial lifeline it uses to fund terrorism and destabilize the region.”

Congress

House GOP leaders under pressure to act on data centers before the midterms

Published

40 minutes ago

August 26, 2026

Blue Light Newsroom

Pressure is growing on House GOP leaders to allow a floor vote before the midterms on legislation designed to shield their constituents from the costs associated with data centers, with an increasing number of Republicans worried that mounting opposition to the energy-sucking facilities could hurt them at the polls.

Reeling from voter complaints over the five-week summer recess about rising power prices linked to the nationwide data center boom — necessary to power the growing artificial intelligence demand — some Republicans are now pressing for action around a bill called the Ratepayer Protection Act.

The bipartisan measure, which advanced unanimously out of the House Energy and Commerce Committee in July, would require states to consider adopting a federal standard that would ensure data centers cover the costs of the grid upgrades needed to serve them.

“I’m encouraged by the momentum behind the Ratepayer Protection Act, and I’m hopeful we’ll see it come to the floor when Congress returns in September,” Rep. Gabe Evans (R-Colo.), an original sponsor of the bill alongside Rep. Kathy Castor (D-Fla.), said in a statement Wednesday. “This legislation earned unanimous bipartisan support in committee, and we continue to see more members sign on every week.”

But GOP leaders are so far undecided on whether to bring the measure up before the November elections — driving anxiety among Republicans who fear they’re politically vulnerable on an increasingly polarizing issue.

“We’ve reached out to Majority Leader [Steve] Scalise to let him know that we’d like to see the Ratepayer Protection Act on the floor as soon as the House comes back from August recess,” said an aide for a Republican member of the Energy and Commerce Committee, granted anonymity to describe internal party dynamics. “Our constituents are demanding substantive action on data centers.”

Another House GOP aide, also granted anonymity to speak candidly, was even more blunt about the political urgency at play: “There’s not really a point in passing this bill after the election.”

When members return to Washington Monday after the August recess, the House is only scheduled to be in session for 15 days before breaking again until after the November elections. A spokesperson for Speaker Mike Johnson declined to comment on the floor agenda for the latter half of September.

A spokesperson for Scalise, meanwhile, said Wednesday night that “no decisions have been made as leadership has heard concerns from members about the bill.”

The spokesperson didn’t elaborate on those concerns, but Scalise, in earlier comments provided to Blue Light News, said the data center dilemma is ultimately “a local issue” — underscoring an aversion to strict federal regulations shared by many conservatives.

“If you want a data center in your community, it’s your choice,” he continued. “I’m from a state where we have several major data centers, and we are seeing tremendous benefits from them.”

In fact, Scalise said, increased tax revenue from Meta’s $50 billion data center has led to every teacher in Louisiana’s rural Richland Parish getting a $50,000 bonus. And in Loudoun County, Virginia, he noted that increased revenue from data centers has led to a 30 percent decrease in property taxes.

“There are tremendous benefits for communities who embrace data centers … They’re good customers, they’re good neighbors and studies prove that they don’t add to the cost of the grid,” Scalise said. “They’re paying their own way.”

Johnson, from Louisiana like Scalise, has similarly highlighted the economic potential of data centers while stressing the importance of maintaining local control. He told CBS Colorado in a recent interview that “my constituents are delighted to have [data centers]” and that they have “welcomed them with open arms.

In February, Amazon announced a $12 billion data center project in Shreveport, the most populous city in Johnson’s district. The company announced another $6 billion expansion there in August.

But there are signs some of Johnson’s constituents are more wary of data center projects: At a recent town hall dubbed “The Truth About Data Centers,” residents voiced concerns about the facilities and their potential impacts on their community.

The political winds across key swing states and districts also appear to be quickly shifting against data centers. Backlash has prompted Michigan Senate candidate Mike Rogers to announce last week that he would support a one-year data center moratorium in his state as he battles Democratic contender Abdul El-Sayed.

Sen. Jon Husted (R-Ohio), who is in a competitive race against former Democratic Sen. Sherrod Brown, has pledged he’ll work to make sure the Senate passes the version of the Ratepayer Protection Act he has sponsored in his chamber.

In the House, the Ratepayer Protection Act could end up being an easy way for Johnson and Scalise to demonstrate that Republicans are responding to voters’ calls to take the issue seriously.

The measure wouldn’t go so far as to impose a pause on data center construction but would still infuse a level of accountability on operators. It also would codify the principle behind the Trump administration’s voluntary agreement with data center developers that they should shoulder energy costs.

“Throughout August, members have heard directly from constituents that data center development and affordability are among their top concerns,” Evans said in his Wednesday statement. “This bill tackles both by ensuring hardworking families and small businesses aren’t forced to foot the bill for the massive energy demands of data centers.”

Regardless of whether the bill eventually becomes law, Francesca Hsie — deputy director for electricity at center-left think tank Third Way — said the Ratepayer Protection Act could have the effect of “signaling to states” the need to take up regulation.

Whether imagined or real, she said, public perception is that data center expansion is “inextricably linked” to rising energy costs, “and because of that, I think the public is really wanting politicians to show some sort of engagement or regulation of how buildout is happening.”

Owen Dahlkamp contributed to this report.

Congress

House GOP leaders eye quick vote on Senate-passed stopgap

Published

9 hours ago

August 26, 2026

Blue Light Newsroom

House GOP leaders are aiming to put a Senate-passed stopgap spending bill on the floor early next week, in the first days back in session after a five-week recess, according to three people granted anonymity to disclose private discussions.

The continuing resolution would reset the Sept. 30 appropriations deadline for Dec. 11, after the midterm elections.

The quick vote, coming almost a full month before the government funding deadline, underscores how Republican leaders are intent on avoiding a government shutdown before voters go to the polls in November. Before the summer recess, the House passed a slightly shorter stopgap funding bill largely along party lines.

The Senate version, however, was negotiated with Democrats, and GOP leaders are considering passing the bill under suspension of the rules — a fast-track process that requires a bipartisan two-thirds majority, the three people said.

Most Democrats opposed the earlier House-passed stopgap because it did not include legislative language to ensure funding would not go to certain immigration enforcement activities. But some Democrats are now suggesting they could be open to supporting the Senate version.

Rep. Rosa DeLauro of Connecticut, the top Democrat on the House Appropriations Committee, called the Senate measure “a welcome improvement” from the House bill.

The Senate measure has Republican support as well, with House Rules Chair Virginia Foxx (R-N.C.) saying earlier this month that she believed it would pass under suspension. The White House has also issued a statement of administration policy in support of the bill, which includes language the administration supports postponing a ban on intoxicating hemp products set to kick in this fall.

But some Republicans loyal to President Donald Trump could raise concerns about another provision, demanded by Senate Democrats, temporarily blocking the White House from finalizing its proposal to put political appointees in charge of approving federal grants.

Jennifer Scholtes contributed to this report.

Congress

Senate Democrats urge Netanyahu to stop surge of violence in West Bank

Published

9 hours ago

August 26, 2026

Blue Light Newsroom

Senate Democrats urged Israel Prime Minister Benjamin Netanyahu to intercede in the “surge” of violence in the West Bank on Wednesday, in a letter expressing their concern and opposition.

The letter comes after reports of mass arrests of Palestinians and settler attacks on mosques in recent weeks. Senate Democrats raised concerns that continued settlement, expansion and fighting will harm Israel’s security.

The Democratic Party remains divided, as tensions over the relationship between the U.S. and Israel continue to dominate debates ahead of the midterm election.

“We urge you to take measures to prevent and intercede in this violence, establish a credible mechanism to investigate violations of law, and to make clear that the Government of Israel will not tolerate violence by its people, just as it does not tolerate violence against its people,” the senators wrote in the letter.

The letter, drafted by Sen. Adam Schiff (D-Calif.), includes the signatures of 45 of the 47 senators who caucus with the Democrats.

Sen. Bernie Sanders (I-Vt.) — a longtime critic of Netanyahu’s government — and Sen. John Fetterman (D-Pa.), arguably Israel’s most vocal supporter among Senate Democrats, were not among the signers.

Spokespeople for Fetterman and Sanders did not immediately respond to a request for comment.

Schiff’s efforts come weeks after the California Democrat told Blue Light News he would not swear off future support from the American Israel Public Affairs Committee, the powerful pro-Israel lobby.

However, Schiff sharply criticized Netanyahu, saying it was “heartbreaking” the way he had “so damaged Israel, its standing in the world, and the loss of life as a result.”