Senator Coburn, distinguished members of the Subcommittee:
Thank you for your invitation. It is a privilege to appear before you once again to discuss the deepening international crisis over Iran's nuclear program, and the policy options that are available to the United States.
Two months ago, Secretary of State Condoleezza Rice articulated what amounted to a fundamental shift in American policy when she announced that, as part of its commitment to a diplomatic solution of the deepening nuclear stand-off with Tehran, the Bush administration was prepared to offer Iran an unprecedented "package" of incentives to return to the negotiating table. As part of that process, the White House even signaled its willingness to hold direct negotiations with Iran's ayatollahs for the first time in 27 years. Yet today, prospects for such engagement are increasingly remote. Iran's dogged refusal to provide a clear and unambiguous answer to this proposal, coupled with its insistence on continuing uranium enrichment, has led the United States to once again seek international action on Iran's nuclear program.
That these nuclear negotiations would fail was hardly unexpected. From the outset, the proposal proffered by the United States and its allies suffered from serious deficiencies. Secretary Rice's late May offer was actually the third such effort by the international community over the past decade. Between 1994 and 1997, the European Union attempted to moderate Iran's support for terrorism and pursuit of weapons of mass destruction through a series of diplomatic and economic incentives. By the time it was finally tabled in 1997, that policy, known as "critical dialogue," had provided the Islamic Republic with economic aid and international legitimacy, but had failed to moderate Iranian behavior in any meaningful way. More recently, in 2003, the EU "troika" (France, Germany and Great Britain) tried to revive the "critical dialogue" concept in an effort to deal with Iran's runaway nuclear ambitions, with very similar results. Both approaches failed because they fundamentally misread one critical issue: the political will of the Iranian leadership to become a nuclear power. The latest offer shared this failing.
Neither did the offer properly account for Iranian perceptions. Simply put, officials in Tehran do not accept the notion that the United States could have legitimate cause for concern over their country's nuclear effort. Rather, they see American nuclear diplomacy as a foil for accomplishing a different objective: regime change in Tehran. As such, the Iranian leadership has little or no incentive to "do a deal" with Washington. After all, Iranian diplomats have been quick to point out, if the nuclear issue is settled "there will be others." The offer of renewed negotiations did, however, provide the Islamic Republic with a new opportunity to run out the diplomatic clock and buy the necessary time to become nuclear-ready.
At the same time, this effort carried with it a steep opportunity cost. By initiating negotiations (and offering direct contacts) with the Islamic Republic, the United States effectively telegraphed two very damaging messages. To the Iranian leadership, it indicated that concerns over Iran's emerging atomic capability had led Washington to implicitly endorse the current status quo in the Middle East, including Iran's ongoing support for international terrorism and its interference in post-war Iraq. To the Iranian people, meanwhile, the Administration's overture signaled that for the U.S., dealing with Iran's atomic ambitions had trumped American support for the cause of freedom in Iran.
The results have been marked. Today, there is a crisis of confidence within the Iranian opposition, which has begun to doubt Washington's commitment to their cause. The Iranian regime, meanwhile, has been emboldened to expand its sponsorship of radicalism in the region, most directly through its support for Hezbollah in the escalating military confrontation now taking place with Israel.
When addressing the current crisis, some observers have tended to minimize the impact of the Islamic Republic's atomic efforts, suggesting that it will be possible in the future for the United States to deter a nuclear-armed Iran. In doing so, they have relied on the experience of the Cold War, during which the threat of mutual nuclear annihilation created a stable "balance of terror" between Moscow and Washington. This deterrence paradigm functioned successfully because a series of conditions (good communication, rational decision-making, well-informed strategic planning, and, most importantly, a shared assumption that war should be avoided) were presumed to exist between the U.S. and the USSR.
None of these conditions currently exist in America's relationship with Iran. For over two-and-a-half decades, since the November 1979 takeover of the American embassy in Tehran, the United States has not had steady official contacts with the Islamic Republic. As a result, American policymakers today have little insight into the Iranian regime's decision-making process—or the government's potential "red lines" in the unfolding confrontation over its nuclear ambitions.
Likewise, U.S. officials have not adequately understood the implications of the internal political changes that are now taking place within the Islamic Republic. The past several years have seen a re-entrenchment of conservative forces in the Iranian body politic. Iran's clerical army, the Pasdaran, has been the principal beneficiary of this trend, taking on major new political and economic powers within the regime. This new crop of conservatives is distinct from other nodes of regime power in the Islamic Republic. Its members are overwhelmingly military strategists and tacticians, rather than professional clerics, and generally lack the political experience of Iran's clerical establishment (including the ability to safely navigate international crises). Their ascendance has created significant shift in the regime's traditional balance of power—one that includes the emergence of Iranian president Mahmoud Ahmadinejad, himself a former Pasdaran commander, as an independent foreign policy actor.
Nor can it be assumed that both countries are seeking to avoid a conflict. On the contrary, at least one segment of the Iranian leadership now appears to be seeking just such a showdown. Since his assumption of power in August 2005, Iranian president Mahmoud Ahmadinejad has charted an increasingly confrontational foreign policy course vis-à-vis the United States and Europe. As Ahmadinejad told a closed-door session of the Iranian parliament's foreign policy and national security committee in January 2006, the Islamic Republic must abandon its decade-and-a-half-old policy of "détente" with the West in favor of confrontation.
Significantly, this foreign policy brinksmanship appears to have deep theological underpinnings. Like his religious mentor, the radical Qom cleric Mohammed Taqi Mesbah-Yazdi, Iran's president believes fervently in the imminent return of the "Mahdi," the Islamic Messiah of Shi'ite theology. Moreover, as Ahmadinejad has made clear, this second coming will be brought about through a civilizational clash with the West—"a historic war between the oppressor [Christians] and the world of Islam"—in which Iran will play a leading role.
A TRIPLE TRACK STRATEGY
Given the forgoing, it should be assumed that the establishment of a successful bilateral deterrence relationship will be difficult, if not impossible, to achieve with the current Iranian leadership—effectively making Iran "undeterrable" in the traditional sense of the word. Instead, the United States should focus its attentions in the following areas:
Economic pressure. Today, the Islamic Republic possesses at least three fundamental economic vulnerabilities. The first is its reliance on foreign supplies of refined petroleum products; more than a third of Iran's annual consumption of over 64.5 million liters of gasoline is currently imported from a variety of foreign sources, at an estimated cost of more than $3 billion annually. The second is the country's centralized economic structure, which is dominated by a small number of families and charitable foundations (known as bonyads). The third vulnerability derives from Iran's dependence on foreign direct investment; Iran's energy sector currently requires approximately $1 billion annually to maintain current production levels, and an addition half a billion dollars to increase output. Through economic measures that target these vulnerabilities, the United States and its international allies have the ability to substantially influence regime decision-making—and, potentially, to galvanize serious domestic unrest within the Islamic Republic as well.
Simultaneously, the United States must expand its support for freedom in Iran. Back in February, the Bush administration took the bold step of asking Congress for $75 million to "support the aspirations of the Iranian people for freedom in their own country." Five months later, however, these efforts appear to be faltering. Despite a series of encouraging developments—including the establishment of a dedicated Office of Iran Affairs within the State Department's Bureau of Near East Affairs, and plans for a major expansion of government broadcasting to Iran—the Bush administration has not yet articulated a clear vision for achieving democratic change within the Islamic Republic. More detrimental still have been the Bush administration's diplomatic efforts to defuse the expanding confrontation over Iran's nuclear program, which have led it to seek accommodation with Iran's ayatollahs at the expense of the country's captive population. Revitalizing this effort means refocusing on the promotion of internal change through expanded contacts with the Iranian opposition, more grassroots efforts to engage ordinary Iranians, and the pursuit of a policy that favors freedom over accommodation.
Both efforts must be reinforced by a robust public diplomacy program. The United States cannot hope to fracture the domestic consensus that exists in Iran today in favor of the regime's nuclear program without highlighting the risks associated with the runaway atomic ambitions of Iran's ayatollahs. Nor can it hope to convey to the 75-80% of Iranians that oppose the current regime in Tehran that it stands with them in their desire for change. Today, however, American outreach falls far short of these objectives. Despite widespread popularity, the U.S. government's principal public broadcasting tools toward Iran, Radio Farda and the Voice of America, continue to suffer from serious systemic dysfunctions. These include sub-optimal programming, a lack of defined goals and no metrics by which to measure success. As a result, American outreach is overwhelmingly reactive, often irrelevant, and at times downright damaging to U.S. objectives. If it hopes to persevere in the battle for Iranian "hearts and minds," the United States must craft a clear message of hope and transformation that is continuously calibrated to the Iranian "marketplace," and that message must be capable of penetrating the regime's increasingly sophisticated barriers.
These components are interdependent. Without economic pressure, the international community cannot hope to slow the pace of Iran's nuclear program. Truly eliminating the threat posed by an Iranian bomb, however, will require a fundamental change of regime in Tehran. And neither goal can be accomplished without the assistance of those that represent the future of Iran: the people themselves.
In its April 2006 National Security Strategy, the Bush administration noted that the United States faces "no greater challenge from a single country than from Iran." That challenge is two-fold; the first stems from Iran's nuclear ambitions, the second from the driver of those efforts: the nature of the regime itself. The former problem is immediate. The latter is long-term. Washington, however, must confront both, or risk the rise of a radical regional order deeply antagonistic to the United States. Should that happen, there can be little doubt that America's interests in promoting democratic change and combating international terrorism will take a giant step backward.
 Johannes Reissner, "Europe and Iran: Critical Dialogue," in Richard N. Haass and Meghan L. O'Sullivan, eds., Honey and Vinegar: Incentives, Sanctions and Foreign Policy (Washington: Brookings Institution Press, 2000), 42.
 Conversations with Iranian officials, Muscat, Oman, June 2006.
 See, for example, Barry R. Posen, "We Can Live with a Nuclear Iran," New York Times, February 27, 2006, http://www.nytimes.com/2006/02/ 27/opinion/27posen.html.
 See "Iran's President Criticizes Past 16 Years of Détente with West," VOA News, January 3, 2006, http://www.voanews.com/english/2006-01-03-voa52.cfm.
 "Ahmadinejad: Wipe Israel Off Map," Al-Jazeera (Doha), October 26, 2005, http://english.aljazeera.net/NR/exeres/15E6BF77- 6F91- 46EE-A4B5 -A3CE0E9957EA.htm.
 "'Iran's Refining Capacity to Increase to 900,000,'" iranmania.com, February 19, 2006, http://www.iranmania.com/News/ArticleView/Default.asp?ArchiveNews=Yes&NewsCode=40656&NewsKind=CurrentAffairs.
 Paul Klebnikov, "Millionaire Mullahs." Forbes, July 21, 2003, http://www.forbes.com/forbes/2003/0721/056_print.html.
 "NIOC Undertaking Host of Projects to Boost Oil Output", Middle East Economic Survey XLVIII, no 19, (2005), as cited in A.F. Alhajji, "Will Iran's Nuclear Standoff Cause a World Energy Crisis? (Part 1 of 2)," Middle East Economic Survey XLIX, no. 13 (2006) http://www.mees.com/postedarticles/oped/v49n13-5OD01.htm.
 Secretary of State Condoleezza Rice, Remarks before the Senate Foreign Relations Committee, Washington, DC, February 15, 2006, http://www.state.gov/secretary/rm/2006/61262.htm.
 National Security Strategy of the United States of America, White House, March 2006, 25.