Update, April 5: Undersecretary of State for Political Affairs Thomas Shannon described the reports about the U.S. granting Iran better access to U.S. dollars as false "rumors" during a Senate Foreign Relations Committee hearing.
The Obama administration is considering relaxing financial restrictions that prevent the use of U.S. dollars in transactions with Iran, according to U.S. officials speaking with the Associated Press.
The Treasury Department has created a general license allowing offshore financial institutions to access U.S. dollars for currency trading in conjuncture with legitimate business transactions with Iran, even though this practice is currently illegal.
Some lawmakers are furious, considering Iran's increasingly belligerent behavior. Moreover, the proposed policy was not part of last year's nuclear agreement signed with Iran.
"These reports are deeply concerning, to say the least...As Iran continues to undermine the spirit of its nuclear agreement with illicit ballistic missile tests, the Obama administration is going out of its way to help Tehran reopen for business. The president should abandon this idea," House Speaker Paul Ryan said Thursday in a statement.
Since the U.S. dollar is the world's dominant currency, it is frequently used in global financial transactions and conversions. Sanctions prevent Iran from exchanging the money on its own, while international banks are threatened with heavy fines and potential cut off from the American financial market if caught facilitating Iranian transactions involving U.S. currency.
Senior administration officials justify additional assistance to Iran.
"We do believe that they are complying [with the nuclear accord]...Ballistic missiles, support for terrorism, destabilizing activities in the region, that's not the nuclear deal...It's a separate set of issues in which we have the ability to respond," Ben Rhodes, President Obama's deputy national security adviser, told reporters on Thursday.
Top Democrats also objected to the new proposal.
In a letter to the president, U.S. Rep. Brad Sherman, D-Cal., argued that allowing the dollar for business transactions with Iran "is clearly not required" by the nuclear agreement and would encourage the Iranians to demand more concessions.
"I do not support granting Iran any new relief without a corresponding concession. We lose leverage otherwise, and Iran receives something for free," added Rep. Steny Hoyer, the No.2-ranked House Democrat.
The proposal violates an administration promise to preserve non-nuclear penalties on Iran following the nuclear deal. Critics argue that the large influx of money will help Iran increase its sponsorship of terrorism worldwide and enhance its regional expansion. In light of recent sanctions relief, Iran continues to invest in the murder of Israelis and anti-regime critics abroad.