U.S. Congress backs bill authorizing $633 billion for defense in 2013

The U.S. Congress approved the final version of the annual defense policy bill on Friday, authorizing $633 billion in defense spending for 2013, tightening sanctions on Iran over its nuclear program and beefing up security at U.S. embassies.

The Democratic-controlled Senate voted 81-14 in favor the National Defense Authorization Act. The vote followed approval of the legislation by the Republican-controlled House of Representatives on Thursday and sent the measure to President Barack Obama for his signature.

The legislation authorizes a Pentagon base budget of $527.5 billion, plus $88.5 billion for overseas operations, primarily the war in Afghanistan. The base budget includes $17.4 billion for defense-related nuclear programs at the Department of Energy.

The NDAA sets defense policy for the year. While it authorizes spending levels for different military programs, it does not appropriate the money. That is done under separate legislation in the House and Senate.

In addition to authorizing the size of the military budget, the bill approved a 1.7 percent pay increase for military personnel and blocked a Pentagon effort to offset rising healthcare costs for retirees by raising some health insurance fees.

The bill calls for tightening sanctions on Iran because of its nuclear program, targeting shipbuilding, shipping and energy sectors for additional restrictions in an effort to boost pressure on Tehran to abandon its uranium enrichment.

The measure directs Defense Secretary Leon Panetta to develop and implement a plan to increase the number of Marines assigned to American embassies and consulates worldwide by up to 1,000.

The move aims to bolster diplomatic security following the deaths of U.S. Ambassador Christopher Stevens and three other Americans in an attack on the consulate in Benghazi, Libya.

The bill eases restrictions on the export of satellites to help U.S. manufacturers, who have seen their global share of the market shrink to less than 25 percent from 65 percent 15 years ago, officials said.

It also allows the Pentagon to continue its efforts to develop biofuels, rejecting a House attempt to prevent the purchase of fuels that are more expensive than petroleum.

The measure prohibits a final U.S. payment of $400.9 million for development of the Medium Extended Air and Missile Defense System, known as MEADS, which is being developed by Lockheed Martin with partners in Italy and Germany.

Lawmakers say Washington has no plans to produce the system, which has been in development for a decade at a cost of $4 billion. But officials say termination fees may nearly equal the cost of completing the system and the White House has warned that failure to approve the funding could hurt ties with allies.

The final measure also extends restrictions blocking any administration effort to imprison Guantanamo detainees in the United States.

(Editing by Sandra Maler and Bill Trott)