Summary: US Congress, first the Senate and then the House, humiliated the president when it voted on Wednesday to override Obama for the first time in his eight-year tenure, as the House rejected a veto of legislation allowing families of terrorist victims to sue Saudi Arabia. The House easily cleared the two-thirds threshold with a 348-77 vote to push back against the veto. The Senate voted 97-1 in favor of the override earlier in the day, with only Democratic Leader Harry Reid voting to sustain the president’s veto.
“We can no longer allow those who injure and kill Americans to hide behind legal loopholes denying justice to the victims of terror,” said House Judiciary Committee Chairman Bob Goodlatte (R-Va.).
The White House immediately slammed lawmakers following the Senate vote.
“I would venture to say that this is the single most embarrassing thing that the United States Senate has done possibly since 1983,” press secretary Josh Earnest told reporters aboard Air Force One, an apparent reference to a 95-0 vote to override President Ronald Reagan that year.
The override was widely expected in both chambers, with lawmakers from both sides of the aisle characterizing it as an act of justice for the victims of the Sept. 11 attacks.
The so-called Justice Against Sponsors of Terrorism (JASTA) would amend current law to allow victims of terrorist attacks on U.S. soil to sue countries that are not formally designated as sponsors of terrorism — like Saudi Arabia.
As reported before, the implications for capital markets should the House follow the Senate in overriding Obama's veto, they could be dramatic: as noted earlier, the threat of the 9/11 bill passing has put on hold Saudi plans to issue its megabond, effectively putting even more pressure on the kingdom's finances; alternatively as Saudi Arabia has threatened before, should the bill pass, it would (and may have no other choice considering its liquidity crisis) have to sell US reserves, among which billions in Treasurys and an unknown amount of US equities.
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Update: moments ago the House also overrode Obama's veto, meaning that as of this moment, the Sept 11 bill is now law.
- HOUSE HAS VOTES TO OVERRIDE VETO OF SAUDI BILL, VOTE ONGOING
This is the first time an Obama veto has been overriden by Congress.
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Late last Friday, we reported that in a troubling development for all Americans, Barack Obama sided with Saudi Arabia when he vetoed the Justice Against Sponsors of Terrorism Act , better known as the "Sept 11" bill, allowing Americans to sue Saudi Arabia over its involvement in terrorism on US soil, passed previously in Congress, despite clear signs that the veto may be rejected by both the Senate and the House.
Moments ago, that is precisely what happened, when the Senate voted overwhelmingly 97 to 1, to override President Obama’s veto of a bill letting the victims of the 9/11 attacks sue Saudi Arabia, striking a blow to the president on foreign policy weeks before he leaves office. The vote marks the first time the Senate has mustered enough votes to overrule Obama’s veto pen.
Democratic Leader Harry Reid was the sole NO vote.
As the Hill reported, not a single Democrat came to the Senate floor before the vote to argue in favor of Obama’s position.
Obama has never had a veto overridden by Congress.
Ironically, the White House promptly called the veto the most embarrassing action by lawmakers in years. What it failed to comprehend is that it was Obama's veto of the Sept 11 that was the most embarrassing action by a US president, perhaps ever.
I think President Obama should spend the balance of his term on pitfalls on fat shaming and golf. He is done. https://t.co/u4ktlykWhE— Cate Long (@cate_long) September 28, 2016
Lawmakers don’t want to be seen as soft on punishing terrorist sponsors a few weeks before the election, at a time when voters are increasingly worried about radical Islamic terrorism in the wake of recent attacks in Manhattan, Minnesota and Orlando, Fla. Oddly enough, Obama had no problem with those particular optics.
The House will take up the matter later on Wednesday, and Speaker Paul Ryan told reporters last week that he expects there be to enough votes for an override.
As a reminder, the legislation, sponsored by Senate Republican Whip John Cornyn (Texas) and Sen. Chuck Schumer (D-N.Y.), the third-ranking member of the Democratic leadership, would create an exception in the Foreign Sovereign Immunities Act to allow the victims of terrorism to sue foreign sponsors of attacks on U.S. soil.
It was crafted primarily at the urging of the families of victims of the Sept. 11, 2001, attacks who want to sue Saudi Arabian officials found to have links with the hijackers who flew planes into the World Trade Center and Pentagon. It passed the Senate and House unanimously in May and September, respectively, but without roll-call votes.
“This is pretty much close to a miraculous occurrence because Democrats and Republicans, senators [and] House members have all agreed [on] the Justice Against Sponsors of Terrorism Act (JASTA), which give the victims of a terrorist attack on our won soil an opportunity to seek the justice they deserve,” Cornyn said on the Senate floor before the vote.
President Obama warned in a veto message to the Senate last week that the bill would improperly give legal plaintiffs and the courts authority over complex and sensitive questions of state-sponsored terrorism. He also cautioned that it would undermine protections for U.S. military, intelligence and foreign service personnel serving overseas, as well as possibly subject U.S. government assets to seizure.
Obama sent a letter to Senate leaders reiterating his threats concerns that the measure could put U.S. troops and interests at risk.:
“The consequences of JASTA could be devastating to the Department of Defense and its service members — and there is no doubt that the consequences could be equally significant for our foreign affairs and intelligence communities,” he wrote in the letter, which was later circulated by a public affairs company working for the embassy of Saudi Arabia.
For once, using threat as a negotiating tactic, especially when on behalf of a foreign sponsor of terorrism and one of the Clinton foundation's biggest donors, failed to work.
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The Saudi Embassy and a high-priced team of lobbyists it hired waged an intense campaign to persuade lawmakers to sustain the override, but it came too late. Surprisingly, the White House seemed to have recognized it as a lost battle and put in less effort, according to Sen. Bob Corker (R-Tenn.), the chairman of the Foreign Relations Committee, who on Tuesday characterized the administration’s lobbying effort as zero.
Senators who are worried about the risk posed by the bill to U.S. personnel in foreign countries huddled on the Senate floor Tuesday to discuss passing additional legislation to protect them. These lawmakers acknowledged the 9/11 victims bill had too much political momentum to stop weeks before Election Day, especially after both chambers approved it unanimously.
“The focus right now is how can we over a period of time create some corrective legislation to deal with whatever blowback might occur,” Corker said. Ryan told reporters last week that he had concerns with the legislation but said he would nevertheless allow it to come to the floor.
“I’m going to let Congress work its will because that’s what Congress does. I do think the votes are there for the override,” he said.
The veto override is a big win for Schumer, whose home state bore the worst of the 9/11 attacks.
“This bill is near and dear to my heart as a New Yorker, because it would allow the victims of 9/11 to pursue some small measure of justice — finally giving them a legal avenue to hold accountable foreign sponsors of the terrorist attack that took from them the lives of their loved ones,” Schumer said on the floor. He co-sponsored the bill when it was first introduced in December 2009 by the late Sen. Arlen Specter (Pa.).
Schumer revived the bill last year by teaming up with Cornyn, a fellow member of the Judiciary Committee. They overcame an early objection from colleagues by empowering the president to pause a lawsuit against a foreign government if the administration proves good-faith effort to reach a settlement are underway. The administration initially wanted unilateral authority to stop a lawsuit regardless of the status of negotiations, something the 9/11 families rejected.
Efforts to override Obama’s vetoes of legislation authorizing construction of the Keystone XL pipeline and a special budget package dismantling the Affordable Care Act failed earlier this Congress.
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Now we wait to see if the Veto is likewise overriden in the House, in what is set to be a historic humiliation for the outgoing Saudi American president.
As for the implications for capital markets should the House follow the Senate in overriding Obama's veto, they could be dramatic: as noted earlier, the threat of the 9/11 bill passing has put on hold Saudi plans to issue its megabond, effectively putting even more pressure on the kingdom's finances; alternatively as Saudi Arabia has threatened before, should the bill pass, it would (and may have no other choice considering its liquidity crisis) have to sell US reserves, among which billions in Treasurys and an unknown amount of US equities.