Chuck Schumer Quietly Moving Lame-Duck $3 Billion Payout to Families of 9/11 Victims

Senate Majority Leader Chuck Schumer has hotlined a bill that would redistribute almost $3 billion to the families of victims of 9/11 that had initially been appropriated for the Covid-era Paycheck Protection Program, according to multiple Democratic Senate sources.

Hotlining a bill is the first step in an effort to move legislation through the Senate by unanimous consent. If no senators object, then the measure will pass with no debate and no vote. Families of 9/11 victims were compensated by a special fund created shortly after the 2001 attack. In 2015, Congress established the U.S. Victims of State Sponsored Terrorism Fund to use billions more in U.S. tax dollars to compensate terrorism victims’ families who could not force foreign states into court. The measure excluded 9/11 families since they had already been compensated. 

Since then some of the families have been lobbying to repeal the provision that excluded them and appear closer than ever to another payout. The 2015 legislation also excluded families of the victims of the 1983 Marine base bombing in Beirut, and those families have been fighting their exclusion as well, though not as successfully as the 9/11 victims’ families. This week, a slate of seven four-star generals raised issues with the bill in a letter directed to Schumer and Senate Minority Leader Mitch McConnell seeking to amend it to include families of the Beirut victims.

The bill was hotlined Monday and has not hit the floor yet, suggesting that there may be opposition, which would require a floor debate and vote. The bill would authorize payments from the U.S. State Sponsored Terrorism Fund, paid for by unused money from the CARES Act’s loans for small businesses.

Schumer’s attempt at a rapid passage through unanimous consent would bypass debate over whether a fresh payout to 9/11 families and their attorneys is the best use of the unspent $3 billion at this moment. “I fought long and hard with 9/11 families and allies in the Senate and House to pass the United States Victims of State Sponsored Terrorism Fund Clarification Act in 2019 that fixed the mistake of excluding certain 9/11 families from United States Victims of State Sponsored Terrorism Fund,” Schumer said in a statement to The Intercept. “This catch-up payment will rectify that original error and provides 9/11 spouses and children as the victims of the worst foreign terror attack in American history the funds that they should have had access to from day one.”

At the end of September, all but one Democrat in the House — outgoing Rep. Kurt Schrader, D-Ore. — voted to approve H.R. 8987, a bill that would distribute money authorized under the Paycheck Protection Program to the families of 9/11 victims. The Fairness for 9/11 Families Act represents another multibillion-dollar distribution to 9/11 victims’ families. The first, known as the September 11th Victims Compensation Fund, came in the weeks following 9/11 and authorized some $7 billion. A special master overseeing the fund began distributing it, but those who had already received payments under an earlier program were barred from double dipping into the new fund in 2015. The recent passage of the Fairness for 9/11 Families Act attempts to correct that perceived miscarriage of justice with another cash payment. 

“I hope that these funds can provide some measure of comfort and justice to the people whose lives were changed forever that day,” House Judiciary Committee Chair Jerrold Nadler, D-N.Y., said in a press release after the bill’s passage in the House on September 30. “As we pass this legislation, we must not forget the survivors and first responders who continue to suffer the health effects of the 9/11 attacks. I will continue to fight to ensure that these people have the care they need.  We can — and we must — look after everyone who was affected that fateful day.”

The legislation follows an August recommendation by a federal magistrate judge seeking to block 9/11 victims’ families engaged in a suit to force the government to use billions of dollars in Afghanistan’s central bank assets frozen by the United States. The Afghan currency and gold reserves are being held in the New York Federal Reserve Bank, as Afghanistan struggles under widespread economic collapse from the devaluation of the central bank, which has resulted in starvation conditions for tens of millions of citizens. As The Intercept reported in February, President Joe Biden’s former Afghanistan adviser Lee Wolosky has joined other lawyers representing families seeking payments from the frozen funds. Together, the lawyers likely stand to make hundreds of millions of dollars from the suit. 

In September, Biden signed an executive order to create a Switzerland-based foundation to distribute $3.5 billion in frozen Afghan central bank funds in a highly controlled scheme that attempts to use the funds to benefit Afghanistan without ceding assets to the Taliban. According to a State Department press release, “Disbursements from the Afghan Fund could include keeping Afghanistan current on its debt payments to international financial institutions, which would preserve their eligibility for development assistance, and paying for critical imports, such as electricity.”

Former central bank employees and experts have criticized the failure to recapitalize the central bank’s frozen funds. Without recapitalization, there is little chance the economy can regain its footing, ensuring continued economic fallout and mass immiseration of tens of millions of people. Multiple family members of 9/11 victims, in opposition to those engaged in the suit against the Biden administration, have called for the recapitalization of the central bank in an effort to head off a humanitarian crisis initiated by the decadeslong war in Afghanistan and rendered even more dire by the seizure of bank funds.