updated 12/28/2007 5:52:42 PM ET 2007-12-28T22:52:42

President Bush on Friday used a "pocket veto" to reject a sweeping defense bill because he dislikes a provision that would expose the Iraqi government to expensive lawsuits seeking damages from the Saddam Hussein era.

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In a statement, Bush said the legislation "would imperil billions of dollars of Iraqi assets at a crucial juncture in that nation's reconstruction efforts."

The president's objections were focused on a provision deep within legislation that sets defense policy for the coming year and approves $696 billion in spending, including $189 billion for the wars in Iraq and Afghanistan. Also in the legislation were improved veterans benefits and tighter oversight of contractors and weapons programs.

The pocket veto means that troops will get a 3 percent raise Jan. 1 instead of the 3.5 percent authorized by the bill.

Bush's decision to use a pocket veto, announced while vacationing at his Texas ranch, means the legislation will die at midnight Dec. 31. This tactic for killing a bill can be used only when Congress is not in session.

'The House rejects'
The House last week adjourned until Jan. 15; the Senate returns a week later but has been holding brief, often seconds-long pro forma sessions every two or three days to prevent Bush from making appointments that otherwise would need Senate approval.

Brendan Daly, spokesman for House Speaker Nancy Pelosi, D-Calif., said, "The House rejects any assertion that the White House has the authority to do a pocket veto."

When adjourning before Christmas, the House instructed the House clerk to accept any communications — such as veto messages — from the White House during the monthlong break.

A Democratic congressional aide pointed out that a pocket veto cannot be overridden by Congress and allows Bush to distance himself from the rejection of a major Pentagon bill in a time of war.

In a message to Congress, the president said he was sending the bill and his outline of objections to the House clerk "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."

Democratic aides said they have not ruled out any legislative options, including dropping the language on lawsuits against Iraq and sending the rest of the bill back to Bush.

The sponsor of the contested provision, Sen. Frank Lautenberg, D-N.J., said the provision would allow "American victims of terror to hold perpetrators accountable — plain and simple."

Senate Republican Leader Mitch McConnell of Kentucky called on lawmakers to "move rapidly to fix this section" when Congress returns in January so that the underlying bill can be signed.

Democratic congressional leaders complained that Bush's move was a last-minute stunt because he had never indicated his intention to veto the bill.

Problems with the provision
Bush aides said they had signaled concern about the controversial provision for weeks, although there had been no formal veto threat. They said their concern grew urgent recently after a legal review and feedback from U.S. diplomats in Iraq and Iraqi leaders.

The disputed section of the bill would reshape Iraq's immunity to lawsuits, exposing the new government to litigation in U.S. courts stemming from treatment of Americans in Iraq during Saddam's reign. Even cases that had once been rejected could be refiled.

Bush's aides warned of a dire scenario — a rush of litigation that could freeze tens of billions of dollars in Iraqi assets being held in U.S. banks. Money at the heart of the Iraqi rebuilding effort would be tied up in court, potentially halting the very stabilization efforts that could get U.S. troops home faster, the aides said.

Yet Democrats fumed that Bush could have worked out the technical fix sooner if he had wanted, without rejecting an entire bill that contains extra help and money for troops.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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