Obama signs defense authorization bill, despite 'serious reservations'

President Obama signed on Saturday the defense authorization bill, formally ending weeks of heated debate in Congress and intense lobbying by the administration to strip controversial provisions requiring the transfer of some terror suspects to military custody.

"I have signed this bill despite having serious reservations with certain provisions that regulate the detention, interrogation, and prosecution of suspected terrorists," Obama said in a statement accompanying his signature.

The White House had originally threatened to veto the $662 billion bill, considered must-pass legislation, over the language that requires mandatory military custody for suspects linked to al-Qaida or its affiliates, even if they are captured in the U.S. Just before the House and Senate passed the bill comfortably, the White House said it would support the bill's compromise language that, as tweaked by conference committee, would not impede the administration's ability to collect intelligence or incapacitate dangerous terrorists.

Still, administration officials have admitted publicly the final provisions were not the preferred approach of this administration.

"Ultimately, I decided to sign this bill not only because of the critically important services it provides for our forces and their families and the national security programs it authorizes, but also because the Congress revised provisions that otherwise would have jeopardized the safety, security, and liberty of the American people," Obama said in Saturday's satement.

Responding to the White House's concerns that the provisions would limit the flexibility of law-enforcement and counterterrorism officials, lawmakers added written assurances the bill would not affect existing waivers of the FBI or any other domestic law-enforcement agency. They also gave the president the authority to waive the military-detention provisions, and dropped language requiring military tribunals for all cases.

Many Democrats and human-rights groups have decried the bill's language that would allow indefinite detention for suspected terrorists without a trial--including Americans arrested in the United States. Supporters of the detainee provisions argue that the bill merely codifies existing law as it applies to Americans and legal resident aliens, as they retain the right to challenge their detention in court.

The bill also sets in motion strong sanctions against Iran's Central Bank, in an attempt to rein in Tehran's nuclear program, by impeding Iran's ability to process payments for the roughly $90 billion in oil and gas it sells each year. The measures, which would penalize any foreign financial institution that does business with the central bank, sparked threats by Iranian officials to cut off access to the Strait of Hormuz, which could block transportation of most oil exports from the Persian Gulf.

The administration retains a national security waiver for the sanctions - and one to waive the petroleum sanctions if it determines there isn't enough global supply to offset the lost Iranian oil - but has said it opposes being held to a timeline that could fragment to the international coalition working to isolate Iran or potentially spike oil prices.