(CNSNews.com) - Rep. Ed Royce (R-Calif.), chairman of the House Foreign Affairs Committee, says the best way to pressure Russia over its military takeover of Ukraine's Crimean Peninsula is to impose sanctions on Russia's state-owned banks.
The leverage "has to be financial," Royce told CNN's "New Day" on Monday. "It has to recognize that the Achilles heel for Russia is their economy, the ruble.
"What can we do to sort of set up a scenario where we lead, get the Europeans involved, and say to the state-run banks in Russia, either you cooperate here or the sanctions we will impose will create economic chaos in Russia? What can we do in terms of the credit that Russia needs and the trade that Russia needs with the West?
"But here the administration will be put to the test, because the Poles and the Czechs are already upset with the administration for pulling out our anti-ballistic missile defensive program that we were working on with them...to help defend Europe and the United States against Iran.
"The fact that we signaled that we were willing to do that in the face of Russian pressure makes the administration look weak. So at this point we have to lead, and we have to rally Europe around a series of steps that would actually impact the Russians economically -- sanctions against state-owned banks."
Royce said the United Nations Security Council should bring up a resolution criticizing or sanctioning Moscow.
"Make Russia veto it," he said. "Make Russia isolate itself diplomatically and economically. At that point, they have to begin to weigh the cost; and at that point they might begin to look at a way out or a way to cut a deal to keep them in their base in Sebastopol, you know, in Crimea, for their fleet, but would stop them from escalating into the eastern Ukraine, which I think is what we're all concerned about right now."
Royce said he met Sunday evening with Treasury Secretary Jack Lew to discuss some of the steps the U.S. could take. And he said his committee will hold a hearing on Thursday:
"We're going to have officials from the administration, from Treasury, from State Department, and we're going to talk about some of the steps that we might be able to take jointly with the Senate in order to sort of bolster the position of the Ukrainian government in this, because that also is part of the equation, isn't it?
"We need to give some confidence to Ukraine, to sort of come together and to show the support of Europe. Now most of the support is going to come from Europe but some of the backstop here will be from the United States, some of the loan guarantees. So on Thursday we'll have that hearing and try to send that message that the United States, in a bipartisan way, is going to try to strengthen our commitment to work with Europe to bolster Ukraine."
President Obama on Monday said the U.S. is "examining a whole series of steps -- economics, diplomatic -- that will isolate Russia and will have a negative impact on Russia's economy and its standing in the world."
Obama also urged Congress to "work with the administration to help provide a package of assistance to the Ukrainians, to the people and that government. "