Bush signs revised defense bill after concerns addressed about Iraq

President Bush signed the defense authorization bill into law Monday, a month after he caught Congress by surprise and rejected the measure over a provision that threatened to freeze Iraqi assets held in U.S. financial institutions.

In addition to authorizing funding for the Defense Department and military construction, the measure authorizes military pay increases of 3.5 percent and contains several policy initiatives intended to improve oversight of the Pentagon and its contractors.

"This is a great day for our troops, their families, and our nation," said House Armed Services Chairman Ike Skelton, D-Mo. "In spite of the delay caused by the president's unexpected veto, it is gratifying to see this defense bill finally signed into law. I am very proud of this legislation, which may be the best defense bill in decades."

Congress revised the legislation after Bush vetoed it Dec. 28 because of the Iraqi assets provision, which originated in the Senate version of the bill as an amendment by Sen. Frank Lautenberg, D-N.J. The goal was to expand the ability of American victims of terrorism to sue current and former state sponsors of terrorism for damages in U.S. courts. The language essentially would have held the current Iraqi government liable for suits filed by victims of former President Saddam Hussein's regime.

The White House argued that freezing Iraqi assets would devastate reconstruction efforts.

As approved by the House and Senate, the revised bill included a presidential waiver for all claims against Iraq that occurred before enactment of the fiscal 2008 defense authorization bill. The president must notify Congress within 30 days of issuing the waiver or it cannot go into effect.

House lawmakers also added non-binding "sense of the Congress" language urging the president to work with the Iraqi government to compensate Saddam's victims.