In a surprise move, the President has vetoed HR 1585, the 2008 Defense Authorization Act. This means that U.S. Military personnel will not receive the 3.5 percent raise in military pay authorized by the act on January 1. Instead, troops will receive a raise of 3.0 percent, which is an automatic adjustment for inflation required by previous law.
At issue is a single provision of the bill, Section 1083, which would allow Iraqi assets in the United States to be frozen.
In a statement, White House Deputy Press Secretary Scott Stanzel said, "The President intends to veto H.R. 1585, the National Defense Authorization Act for Fiscal Year 2008 ("NDAA"). One provision in the bill - section 1083 - would significantly amend current law (the Foreign Sovereign Immunities Act) in ways that would imperil Iraqi assets held in the United States, including reconstruction and central bank funds. If enacted, Section 1083 would permit plaintiffs' lawyers immediately to freeze Iraqi funds and would expose Iraq to massive liability in lawsuits concerning the misdeeds of the Saddam Hussein regime. The new democratic government of Iraq, during this crucial period of reconstruction, cannot afford to have its funds entangled in such lawsuits in the United States. Once in place, the restrictions on Iraq's funds that could result from the bill could take months to lift, and thus Section 1083 cannot become law even for a short period of time."
Democrat leaders accused Bush of bowing to Iraqi demands. The government of Iraq raised serious objections to Section 1083. They warned that plaintiffs, including former U.S. POWs who had been held captive during the first Gulf War in the 1990s, might cite this section in seeking compensation from its assets currently in U.S. banks — reportedly $25 billion. Reportedly, the Iraqi government threatened that, unless President Bush veto'd the Defense Department legislation, Iraqi leaders would immediately move assets out of U.S. banks.
In preventing the bill from becoming law, Bush used a tactic known as a "pocket veto." Under the U.S. Constitution, if a president does not sign a bill within 10 days after the bill is presented by Congress, it becomes law -- unless Congress is not in session at the time, in which case the bill dies. Both the House and the Senate adjourned December 19th, the same day the bill was sent to the President. Congress is not scheduled to return until January 15.
The difference between a 3.0 percent pay raise and 3.5 percent pay raise are not great. For an E-5 with six years of service the difference is about $12 per month. For an E-8 with 16 years of service, it's about $19 per month, and for an O-3 with 10 years of service, it's about $25. per month.
Also at issue are millions of dollars in enlistment, reenlistment and other bonuses. The current authority for the services to pay such bonuses expires on December 31.
When Congress returns to session, the Bush Administration has promised to work with Congress on a re-worked bill that would make the 0.5 percent difference and bonus money retroactive to January 1.
In a White House memorandum, Bush said, "This legislation contains important authorities for the Department of Defense, including authority to provide certain additional pay and bonuses to service members. Although I continue to have serious objections to other provisions of this bill, including section 1079 relating to intelligence matters, I urge the Congress to address the flaw in section 1083 as quickly as possible so I may sign into law the National Defense Authorization Act for Fiscal Year 2008, as modified. I also urge the Congress to ensure that any provisions affecting service member pay and bonuses, as well as provisions extending expiring authorities, are retroactive to January 1, 2008."
However, the Defense Finance and Accounting Service (DFAS) needs a minimum of 10 days to make pay changes to their pay software, so the earliest troops could see this would be in February.
