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**RSC Policy Brief:**

**National Defense Authorization Act of 2008 Veto**

*January 15, 2008*

**In light of the President's veto of H.R. 1585, the National Defense
Authorization Act of 2008, the RSC has prepared the following policy
brief on the provisions in the bill that led to the veto and the
possible responses that Congress is considering.**

**[Background]{.underline}**: Prior to the passage of the Foreign
Sovereign Immunities Act (FSIA) in 1976, foreign nations were immune to
civil suits by individual U.S. citizens. According to CRS, Congress
first amended FSIA to allow U.S. victims of terrorism to bring civil
suits against certain nations associated with state-organized terrorism
in 1996. Since that time courts have passed numerous default judgments
against nations that refused to appear in court (such as, Cuba, Iran,
Sudan, and Syria), which were never collected. While Congress has
attempted to facilitate the collection of judgments against
terror-sponsoring nations with moderate success, neither the Clinton nor
the G.W. Bush administrations have fully supported attempts to collect
judgments against foreign states. Thus, it has been traditionally
difficult for claimants receiving judgments under the FSIA amendments to
receive awards from foreign states, even if those nations hold assets in
U.S. markets.

In an attempt to make it easier for victims of foreign terrorism to
collect judgments against sovereign states, an amendment to H.R. 1585,
the FY 2008 National Defense Authorization Act (NDAA), was passed on the
floor of the Senate and included in the final Conference Report of the
bill which was sent to the President on December 14, 2007. The amendment
inserted a new section into the bill (Section 1083) that would create a
"terrorist state" exception to sovereign immunity and create a cause of
action under FSIA. The amendment would have allowed U.S. civil suits
against any foreign state that has committed acts of terrorism and the
cause of action expansion would have given courts the authority to
freeze assets of accused foreign nations while court proceedings
transpired. The final Conference Report passed the House by a vote of
[370---49](http://clerk.house.gov/evs/2007/roll1151.xml) and the Senate
by a vote of
[90---3](http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=1&vote=00433).
Each vote was roundly supported by Republican Members in both chambers.

Although the Conference Report passed Congress with solid bipartisan
support, the Bush Administration expressed concerns over Section 1083
and, on December 28, 2007, the White House announced that the President
would veto the bill. The Administration expressed concerns it shared
with the current government of Iraq that the amendment would expose the
Iraqi government to billions of dollars in judgments stemming from acts
of terrorism perpetrated by Saddam Hussein's regime. The President's
senior officials warned that suits brought by former prisoners of war
under the provisions of Section 1083 could freeze up to \$30 billion
dollars in assets belonging to the democratically elected government in
Baghdad. Specifically, the White House stated that "particular
provisions included in the bill risk imposing financially devastating
hardship on Iraq that will unacceptably interfere with the political and
economic progress everyone agrees is critically important to bringing
our troops home."

According to the Administration, the provisions of Section 1083 would
"allow plaintiffs' lawyers pursuing Iraq for Saddam-era acts of
terrorism to freeze Iraq's assets in the amount of damages claimed in
their lawsuits, and would permit the relitigation of billions of dollars
of lawsuits against Iraq that have already been dismissed by our
courts." Therefore, under the new provisions, any assets belonging to
foreign nations accused of acts of terrorism would be frozen in the
amount sought in the initial claim as soon as a suit is brought against
the state---regardless of the validity or eventual outcome of the case.
The White House and the Iraqi government both argue that Iraqi assets in
the U.S., mostly from the Development Fund for Iraq and the Central Bank
of Iraq, are critical to the current effort to rebuild Iraq and continue
the fight against Al Qaeda and other militant groups in the region. As
such, the Administration contends that Section 1083 would "imperil
billions of dollars of Iraqi assets at a crucial juncture in that
Nation's reconstruction efforts and undermine the foreign policy and
commercial interests of the United States."

The White House has also listed additional concerns that the current
provisions in the NDAA would:

-   "Permit the freezing of assets in commercial entities in which Iraq
    has an interest, potentially exposing partnerships between United
    States businesses and Iraqi national enterprises to attachment. Iraq
    would likely take its future business elsewhere;

-   "Overturn prior litigation victories for the new, democratically
    elected Government of Iraq in lawsuits for Saddam-era acts and allow
    lawyers to reopen and expand those cases;

-   "Authorize punitive damages against the new, democratically elected
    Government of Iraq for Saddam-era conduct and eliminate Iraq's
    ability to assert standard legal defenses normally available to
    defendants in United States courts; and

-   "Hold the democratically elected Government of Iraq, a friend and
    ally of the United States, liable in U.S. Courts for the crimes and
    atrocities of the Saddam Hussein regime."

**[Pocket Veto Controversy]{.underline}**: Since the Congress was out of
session when the Administration announced its veto, the President
planned to use the constitutionally provided "pocket veto" to block the
bill. The Constitution dictates that a bill that has been passed in both
chambers of Congress and is sent to the President will become law if it
is not signed into law or vetoed and returned to the Congress within ten
days. However, if Congress prevents the return of the bill by adjourning
before the ten day period has passed, the legislation will not become
law if it is not signed ([Article 1, Section 7, Clause
2](http://www.archives.gov/national-archives-experience/charters/constitution_transcript.html)).
Unlike a normal presidential veto, a pocket veto cannot be overridden by
a two-thirds majority in each chamber of Congress. Thus, if the bill was
blocked by a pocket veto, a new bill would have to be passed.

However, there has been significant debate over whether President Bush's
veto of H.R. 1585 was indeed a constitutionally authorized pocket veto.
Congressional Democrats have contended that while the House was in
recess over the Christmas break, the Senate met in a series of pro forma
sessions and both chamber's clerks were instructed to receive messages
from the White House in order to receive a veto. In addition, there
exists a longstanding controversy over whether a President may use a
pocket veto between sessions of the same Congress. The legislative
branch has contended that a pocket veto may only be applied every two
years, during the break between one Congress and the next.

For its part, the Administration has contended that since the bill
originated in the House, which did not meet in any form over the recess,
the bill was sent back to the House where it was not received. However,
the White House also returned the bill to the Clerk of the House along
with a [Memorandum of
Disapproval](http://www.whitehouse.gov/news/releases/2007/12/20071228-5.html),
which is uncommon in the case of pocket vetoes. To clarify the
Administration's position and explain why the bill was returned to the
House even though a pocket veto was exercised, the President stated
that:

In addition to withholding my signature and thereby invoking my
constitutional power to 'pocket veto' bills during an adjournment of the
Congress, I am also sending H.R. 1585 to the Clerk of the House of
Representatives, along with this memorandum setting forth my objections,
to avoid unnecessary litigation about the non-enactment of the bill that
results from my withholding approval and to leave no doubt that the bill
is being vetoed.

Despite the President's claim that the bill was pocket vetoed, House
Democratic leadership is still considering a vote to override the veto.
The vote would likely be called in order to bolster the claim that
pocket vetoes may only be used during two-year breaks between Congresses
and would likely fail. If, however, a veto override were to pass both
chambers with more that two-thirds of the vote, the controversy
regarding whether or not H.R. 1585 was pocket vetoed would probably have
to be decided by the courts.

**[Possible Courses of Action]{.underline}**: At this point, the
Congress may do one of three things with H.R. 1585: it may refer the
bill back to the Armed Services Committee for debate regarding a
compromise that would allow the Administration to sign the bill; it
could bring the bill to the floor and attempt to override the veto; or,
it could table or postpone proceedings on the bill and try to reach a
compromise with the White House so that an acceptable form of the bill
is passed and signed shortly after the Senate returns on January 22,
2007.

According to Congress Daily, sending the bill back to the committee
would be the "likely course of action." The Democrats have hinted that,
though they disagree with the President's assertion that the bill was
pocket vetoed, they are interested in finding a compromise and getting
the NDAA passed and signed as soon as possible. The bill could be
referred back to the Armed Services Committee where the bill's
controversial provisions could be corrected.

Democratic leadership may also choose to vote on a veto override to
reassert their position on mid-Congress pocket vetoes and force
Republicans to vote against a bill that they supported one month ago. In
that case, it is likely that Republicans would vote against the override
and the Democrats would fall short of the two-thirds needed to beat the
veto. If that were to happen the Administration and Congress would then
have to work out an acceptable compromise. The likelihood of holding a
veto override vote depends on the Democrat leadership's willingness to
delay passage of the NDAA in order to make a constitutional point
regarding the President's pocket veto.

Finally, the House could table the bill or postpone taking action on the
bill until a date certain and work with the Administration to fix the
problems with Section 1083 so the bill could be passed and signed when
the Senate returns next week. This scenario would be likely if the
Democrats were interested in punting the issue until the Senate is back
in session. Tabling or postponing any action would allow the Armed
Services Committee to work on new language and the Democrats could still
potentially pass the bill by the end of January, which they have stated
is their intention.

No matter what the final scenario may be, the House is set to act on the
bill Today, January 15, 2008. As the House Democratic leadership decides
how to proceed, the Armed Services Committee is currently working on new
NDAA language that would be acceptable to the White House. While the
Administration would like to strip Section 1083 completely, or at least
be given the authority to waive certain nations from liability, the
Congress might advocate a smaller change that limits liens against Iraqi
assets but still eliminates immunity for foreign states in cases of
terrorism. A compromise will probably look like some amalgamation of
these two positions or a complete stripping of Section 1083.

While the bill waits for further action, a portion of a 3.5% pay raise
for active duty service members and other benefit increases and bonuses
for veterans in Iraq and Afghanistan will be put on hold. However, the
pay increase will likely be applied retroactively and the vast majority
of the Pentagon's program funding was already made into law in the
Defense appropriations bill on November 13, 2007.

For further information on the issue of sovereign immunity and the
President's veto of H.R. 1585 see:

-   [*The RSC's original Legislative Bulletin on the Conference Report
    to H.R.
    1585*](http://www.house.gov/hensarling/rsc/doc/lb_121207_dodauthfy08confrpt.doc)

-   [*White House Fact Sheet: National Defense Authorization Act Section
    1083: A Danger to Iraq\'s
    Progress*](http://www.whitehouse.gov/news/releases/2007/12/20071228-3.html)

-   [*White House Memorandum of
    Disapproval*](http://www.whitehouse.gov/news/releases/2007/12/20071228-5.html)

-   [*CRS Report Defense: FY2008 Authorization and
    Appropriation*](http://www.congress.gov/erp/ra/html/RL33999.html#n_1_)

-   [*CRS Report:* *Suits Against Terrorist States By Victims of
    Terrorism*](http://www.congress.gov/erp/rl/html/RL31258.html)

**[RSC Staff Contact]{.underline}**: Andy Koenig,
<andy.koenig@mail.house.gov>, (202) 226-9717

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