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Conservative Christian leaders are fearful of precedents in Europe and Canada, where church pastors have been jailed for short periods over statements of faith that homosexuality is sinful.
But the move gives the president some breathing room with gay rights supporters, a group that has grown frustrated that Mr. Obama has not moved more quickly to repeal the military's "don't ask, don't tell" policy, or to repeal the Defense of Marriage Act, which defines marriage as between one man and one woman.
Mr. Obama has paid tribute to the gay community, holding a gay pride reception at the White House in June, awarding a posthumous Presidential Medal of Freedom to gay rights icon Harvey Milk, and delivering the keynote speech earlier this month to the HRC annual awards dinner.
But activists have said that while they appreciate gestures from the president, they want action.
Democratic National Committee Chairman Tim Kaine acknowledged this ongoing tension in a statement issued after the president's signing of the legislation.
"There is still much work ahead, but today ... President Obama has delivered on his promise to sign an inclusive hate crimes bill into law," Mr. Kaine said.
Mr. Obama appeared on a dais with the parents of Matthew Shepard and the sisters of James Byrd Jr., the two men whose names appeared on the hate crimes bill. Shepard, a gay 21-year-old University of Wyoming student, and Byrd, a 49-year-old black man from Jasper, Texas, were both brutally murdered in 1998.
The defense authorization bill does not provide the actual funds for defense spending, but instead provides guidelines that are followed for the most part by congressional appropriations committees.
Mr. Obama noted that the bill eliminates funding for a new presidential helicopter fleet, which was six years behind schedule with costs that had ballooned to $13 billion.
"I won't be flying on that," Mr. Obama said.
The bill also eliminated the F-22 fighter program.
But not every project the White House opposed was cut. Lawmakers defied a presidential veto threat and retained funding for an alternative engine for the F-35 Joint Strike Fighter in the bill.
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