Congress reaches deal on new defense bill after Bush veto
By Roxana Tiron
Posted: 01/16/08 03:22 PM [ET]

Congress has reached a compromise with the White House over a defense authorization bill provision that had drawn complaints from the Iraqi government.

Those complaints prompted President Bush to veto the defense bill last month. He complained that a provision in the bill that allowed victims of terrorism to be awarded compensation from frozen foreign assets of state sponsors of terror could have crippled the fledgling Iraqi government with billions of dollars in liability.

Under the compromise, Iraq is excluded from the provision, but other state sponsors of terrorism, such as Iran and Syria, could see frozen assets used as compensation. The compromise is likely to leave American victims taken hostage and tortured by Saddam Hussein’s regime during the first Gulf War without recourse in U.S. federal court.

The new language allows the president to waive the entire provision with regards to claims against Iraq for acts of terrorism that happened before or on the date of the enactment of the 2008 defense authorization bill. The president is required to make a national security determination before issuing a waiver and must notify Congress 30 days prior to issuing it.

However, the changed provision does give a nod to those who had wanted Iraq to be covered by the provision. It includes a sense of the Congress that the secretary of State should work with the government of Iraq to ensure compensation for any meritorious cases based on terrorist acts committed by Saddam’s regime against U.S. citizens or members of the military whose cases can’t be addressed in U.S. courts.

The Bush administration had argued that freezing Iraq’s assets, even temporarily, would deter Iraqis from working with U.S. businesses and could invite other nations to freeze American assets abroad.

The House is expected to vote on the revised defense authorization bill Wednesday night and send it to the Senate for approval.