The House yesterday changed the FY ’08 Defense Authorization Bill to address concerns raised by the president after it was sent to him to be signed in December.

The president threatened to veto the bill over a section that allowed terrorism victims to sue Iraq and other state sponsors of terrorism and would freeze assets of that country during the lawsuit.

The legislative fix passed yesterday allows the president to waive application of that provision to the government of Iraq. It also expresses the sense of Congress that the president should negotiate with Iraq about what cases are legitimate, Rep. Ike Skelton (D-Mo.), the chairman of the House Armed Services Committee (HASC), said yesterday on the House floor.

The House also changed the bill so that the pay raise included in the legislation applied retroactively to the start of the year.

Rep. Jim Saxton (R-N.J.), ranking member of the HASC air and land forces subcommittee, praised the change during floor debate, saying that the bill should not hold the current government of Iraq responsible victims of Saddam Hussein’s regime.

But the bill does apply to prior regimes in other countries–like Lybia, said Rep. Robert Andrews (D-N.J.), a member of the HASC. For that reason, Andrews said he supports moving the bill today but hopes that Congress revisits the issue later in the year.