The White House and Congress have finally reached a deal over the Defense Authorization Bill, The Hill reports. Bush objected to one provision in the bill, leading to its initial veto, which would expose the new Iraqi government to liabilities for the actions of the Hussein regime.

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.

In exchange, the bill does include the “sense of the Congress” that the Secretary of State should work with the Iraqi government to work out compensation for any “meritorious” cases of terror against U.S. citizens or members of the military.

If I’m not mistaken, the bill also provides the necessary funding for the sign-on bonuses for new military recruits.