President Barack Obama signed the $633 billion fiscal 2013 National Defense Authorization Act into law on Wednesday.

The legislation, which cleared Congress last month, authorizes the department to act in any number of instances. “There are certain things that cannot be done without [the authorization act],” said a senior defense official speaking on background.

The act allows the department to institute pay raises, bonuses and incentive pay for personnel. “All military construction has to be authorized under this act,” the official said.

It includes a 1.7 percent pay raise for military personnel, and contains $527.5 billion for DOD’s base budget, $88.5 billion for overseas contingency operations and $17.8 billion for national security programs in the Energy Department and Defense Nuclear Facilities Safety Board.

It also extends the Commanders’ Emergency Response Program that has been used in Afghanistan and Iraq. It authorizes a one-year extension of the Afghan Infrastructure Fund and extends the Coalition Support Fund and the Pakistan Counterinsurgency Fund. In Iraq, the law authorizes U.S. training activities, the official said.

The law also authorizes changes needed to deter sexual assault in the military.

In addition, it establishes the Military Compensation and Retirement Modernization Commission, which will examine all aspects of military compensation. Officials stress that any possible changes to military retirement benefits that the group recommends will not affect current service members.

Air Force structure was of some concern to the department going into the process, but officials say they were pleased with the outcome. The Air Force also received 32 more C-130 aircraft than requested.

“But the Air Force is allowed to do everything else. They are allowed to do their divestures and moves,” the official said. “The only thing kept out of service’s force structure plan was we had to keep the Global Hawk Block 30 [unmanned aircraft].”

The act raises the co-pay for medications under TRICARE through 2022. The legislation also limits any annual increases in pharmacy co-payments to increases in retiree cost of living adjustments.

“It is a little bit toward what we need to start paying for how much health care is costing,” the official said.

The authorization also provides DOD funds for servicewomen who need abortions in case of rape or incest. “So they don’t have to take leave and come home or go out on the economy,” the official said. “This is the first time this has been approved.”

Among other programs, the act authorizes the defense biofuel initiative as well as counternarcotic authorities. “We use this a little bit in Afghanistan, but it’s mostly in the southern border and Colombia,” she said. “It has to get done.”

Passage of the legislation is particularly important this year because the department is operating on a continuing resolution through March, which may be continued again through the rest of the fiscal year. The resolution maintains funding at 2012 budget levels. Without this authority, “Things really do shut down,” the official said.

“It actually is things that keep the war going and things that … keep the economy going because it is pay, recruiting, military construction,” the official said.