Final Pentagon policy bill includes Senate’s sanctions against Iran

House and Senate conferees’ final version of a Pentagon policy bill includes an upper chamber-approved plan to pressure Iran’s central bank, an attempt to convince Tehran to shutter its nuclear weapons program.

“The conferees have adopted the Senate’s strong provisions applying sanctions against Iran’s central bank virtually intact,” Senate Armed Services Committee Chairman Carl Levin (D-Mich.) said in a statement issued Monday evening.

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The Iranian sanctions provision is part of a broader bill that clears the Pentagon to spend $662 billion in 2012, a figure that covers its base and war budgets. The defense authorization conference committee approved a $530 billion base Defense Department budget, $23 billion less than the Obama administration’s $553 billion request.

“Provisions from the Senate bill included in the conference report give us confidence that sanctions will not result in a windfall for Iran through increases in the price of oil,” Levin said. “At the same time, these provisions will add major pressure on Iran to end its quest for nuclear weapons.”

Sens. Mark Kirk (R-Ill.) and Robert Menendez (D-N.J.) pushed the Senate plan that would prohibit any U.S. financial entity from engaging in transactions with any foreign government, central bank or other financial firm that does business with the Central Bank of Iran.

Administration officials strongly opposed the sanctions package, saying it could drive up global oil prices and dissuade allies from joining efforts to further isolate Tehran.

Many lawmakers and security experts say squeezing the central bank is one of the few remaining ways to use economic sanctions to convince Tehran to shed its nuclear ambitions.

Some GOP lawmakers and presidential hopefuls are more hawkish, saying sanctions have failed and a military strike should be considered.