El Jefe Humiliated in Front of His Saudi Handlers

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.

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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.

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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 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.

Reprinted with permission from Zero Hedge.

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