On January 22, the Senate passed H.R. 4986 , a revised version of H.R. 1585 , the FY2008 National Defense Authorization Act, thus clearing the bill for the President, who had vetoed the original version of the bill on December 28. The President vetoed the initial version because of one section which would allow victims of terrorist actions perpetrated by Saddam Hussein's regime to sue the current Iraqi government for damages in U.S. courts. The President said this provision would allow plaintiffs to tie up in lawsuits billions of dollars worth of Iraqi assets, thus hamstringing that country's efforts at economic reconstruction and political reconciliation. The revised defense bill, which would allow the President to exempt Iraq from the provision at issue, would authorize all but $215 million of the $696.4 billion that was the President's amended request for national defense-related funding in FY2008—the same amount as was authorized the vetoed bill. The only other differences between H.R. 1585 and H.R. 4986 were provisions added to the later bill that would make retroactive to January 1, 2008 a 3.5% pay raise for military personnel and the reauthorization of various bonuses, including enlistment and reenlistment bonuses. According to press reports, White House officials have said the President will sign the revised defense bill, H.R. 4986 . The section of H.R. 1585 to which the President objected is Section 1083, which would amend the Foreign Sovereign Immunities Act (28 U.S.C. 1602), the legislation that regulates the conditions under which foreign countries or their instrumentalities can be sued in U.S. courts. Section 1083 is based on a Senate floor amendment to H.R. 1585 sponsored by Senators Frank R. Lautenberg, Arlen Specter, and 20 others. Among the section's many provisions were one that would allow monetary claims against a foreign state for damages (including punitive damages), one that would nullify certain legal defenses currently available to a foreign government being sued, and one that would allow a claimant to freeze assets under U.S. jurisdiction of a state being sued, as soon as a suit was filed. The Administration contended that these provisions could result in billions of dollars in Iraqi funds being tied up by court proceedings, thus undermining efforts to rebuild Iraq and train Iraqi security forces. (For background on the issue, see CRS Report RS22094, Lawsuits Against State Supporters of Terrorism: An Overview , by [author name scrubbed], and CRS Report RL31258, Suits Against Terrorist States by Victims of Terrorism , by [author name scrubbed].) The revised version of the defense bill, H.R. 4986 , retained Section 1083 but added to it a provision that would allow the President to waive its application to Iraq, provided the waiver is in the national security interest and will "promote the reconstruction of, the consolidation of democracy in, and the relations of the United State with, Iraq," and provided that Iraq continues to be a reliable ally in combating international terrorism. Such a presidential waiver would expire 30 days after it is made, unless the President gives Congress written notice of the basis for the waiver. The revised Section 1083 also expresses the sense of Congress that the U.S. and Iraqi governments should negotiate compensation for meritorious claims based on terrorist acts by the Saddam Hussein regime against U.S. citizens or members of the U.S. armed forces if a presidential waiver under this section bars lawsuits for this purpose. Because the President signed the FY2008 Defense Appropriations Bill ( H.R. 3222 , P.L. 110-116 ) into law on December 26, the budget authority thus provided has been available for most ongoing Pentagon operations, notwithstanding the absence of a companion authorization bill. However, because legal authority for more than 20 enlistment and re-enlistment bonuses expired on January 1, 2008, the armed services have temporarily halted payments of those bonuses, pending enactment of authorizing legislation. New bonus agreements signed by the Army, Navy and Air Force on or after January 1, 2008 include an addendum which provides that, while the contracting service member will receive the bonus if and when it is legislatively authorized, payment is not guaranteed. The Marine Corps has suspended its use of bonuses altogether pending enactment of authorizing legislation, directing units to temporarily extend the current enlistments of Marines who intend to reenlist and who would be eligible for a reenlistment bonus. Also as a result of the delay in enacting a defense authorization bill, the basic pay of military personnel increased by 3% on January 1 rather than 3.5%, as was approved in the conference report on H.R. 1585 (and as has taken effect for civilian federal employees). The revised authorization bill, H.R. 4986 , would authorize the 3.5% pay raise and the various bonuses, retroactive to January 1. House and Senate negotiators had filed the conference report on the initial version of the defense bill ( H.R. 1585 , H.Rept. 110-477 ) on December 6. The House adopted the conference report December 12 by a vote of 370-49. The Senate adopted it December 14 by a vote of 90-3, clearing the bill for the President. On December 28, Administration officials announced that the President would not sign the bill and that, since the House had adjourned, the bill thus would die as the result of a so-called "pocket veto." However, Democratic congressional leaders contended that Congress was not adjourned and, therefore, that the President could not invoke that procedure under the circumstances. The Constitution provides that, once a bill is passed by Congress and sent to the President, if he neither (a) signs the measure nor (b) vetoes it and returns it to Congress within 10 days (not counting Sundays), then the bill will become law without his signature, "unless the Congress by their adjournment prevent its return, in which case it shall not be a law" (Article I, Section 7, Clause 2). This last contingency was first referred to in 1812 as a "pocket veto." The practical significance of the issue is that, while Congress can try to override a regular veto with a two-thirds majority in each chamber (thus enacting the vetoed legislation over the President's objection), it has no recourse in the case of a pocket veto except to pass a new bill. For decades, a constitutional debate has been underway over whether the President can exercise the pocket veto after an adjournment between the two sessions of a Congress or only after the adjournment at the end of a two-year Congress. Congress has adopted various procedures to designate agents to whom the President could return a vetoed bill during an inter-session adjournment, thus appearing to provide an opportunity for Congress to try to override the veto. However, several recent presidents, including George W. Bush and William J. Clinton have argued that none of those devices block the use of a pocket veto during an adjournment within a two-year Congress. In the case of H.R. 1585 , a White House spokesman told reporters December 31 that the Administration regarded Congress as being in a state of adjournment and, thus, that the defense authorization bill would die by pocket veto at midnight that date. However, the President also returned the bill to the House accompanied by a "Memorandum of Disapproval," stating his reasons for withholding approval of the bill. This so-called "protective return" procedure—both invoking the pocket veto power and returning the bill to Congress—has been used by previous Administrations in similar circumstances. After the House reconvened in January, it committed the vetoed defense bill, H.R. 1585 , and the President's accompanying "Memorandum of Disapproval" to the House Armed Services Committee, thus upholding the constitutional position that the House did not acknowledge that the President's action was a pocket veto. On January 16, Armed Services Chairman Ike Skelton then introduced the new bill, H.R. 4986 , consisting of the text of the vetoed bill with the changes required to address the issues of Section 1983 and the need to make the pay raise and bonus authorities retroactive. On the same day, the revised bill was passed by the House 369-46 under suspension of the rules, a procedure requiring a two-thirds majority to pass the bill. The Senate passed the bill January 22 by a vote of 91-3, thus clearing the bill for the President. On November 13, the President signed into law the conference report on the FY2008 Defense Appropriations bill ( H.R. 3222 , P.L. 110-114 ), which would provide $460.3 billion in new budget authority for activities of the Department of Defense. The House had approved the compromise version of the bill November 8 by a vote of 400-15 and the Senate adopted it by voice vote the same day. In general, the appropriations bill funds only DOD's base budget—its activities other than the conduct of ongoing military operations in Iraq and Afghanistan. The only exception to that rule is the conference report's inclusion of $11.6 billion to purchase Mine-Resistant, Ambush-Protected (MRAP) vehicles, which are designed to better protect their occupants against land-mines than conventional vehicles. The conference report also includes a continuing resolution that would allow federal agencies to continue operating, through December 14, 2007, even if their regular appropriations bills for FY2008 have not been enacted. Because none of the regular FY2008 appropriations bills had been enacted by October 1, when the new fiscal year began, a continuing resolution ( H.J.Res.