President Barack Obama signed into law a historic and contentious defense spending bill Wednesday that includes a broad expansion of hate-crimes legislation to include crimes committed against people because of their sexual orientation.

After passing out of the Senate 68-29 last week, the defense appropriations bill included hate-crimes language deemed too important for Obama to follow up on his threatened veto over concerns about military spending.

“I promised Judy Shepard when she saw me in the Oval Office that this day would come," Obama told the crowd at the signing of the 2010 National Defense Authorization Act. Shepard's son, Matthew was tortured and murdered in Laramie, Wyoming in 1998, because he was gay. According to the FBI, more than 77,000 hate-crime incidents were reported between 1998 and 2007.

Many conservatives worry the law will be used to criminalize speech. During recent floor debate, Sen. Jim DeMint (R-S.C.) asked, "Can priests, pastors and rabbis be sure their preaching will not be prosecuted if it says certain things are right and wrong?"

Firebrand libertarian broadcaster Alex Jones urged opponents of the president to write letters this week promising to vote out Democrats if he signs "the freedom-destroying hate crimes bill."

However, Attorney General Eric Holder has said the law will only be used to prosecute acts of violence. The new 'hate crimes bill' expands the 1969 United States federal hate-crime law to include crimes motivated by a victim's actual or perceived gender, sexual orientation, gender identity, or disability. It is the first law in the history of the federal government to extend legal protections to transgender persons, requiring the FBI to track statistics on hate crimes against them for the first time.

The Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act also removes the current prerequisite that a victim be engaged in voting, going to school or other federally-protected activity. Federal authorities will be able to engage in hate crimes investigations that local authorities choose not to pursue, with extra funding for prosecution available to all.

At the signing, Obama also touched on the problem of billions of dollars in cost overruns for military projects, pointing out that funding for F-22 fighters was removed from 2010 defense spending. He had threatened to veto the spending bill during summer negotiations with Defense Secretary Robert Gates. Critics have warned the defense bill nevertheless contains $100B in unnecessary spending on other equipment, including F-35 jet engines. Obama today called for further "fundamental" reforms in how the government and Pentagon do business, according to CNN.

Thirty-year Government Accountability Office veteran Winslow T. Wheeler warned earlier this year not to trust talk of defense spending reform. "For decades, the media have taken their descriptions of the size of the defense budget straight from the Pentagon's annual press release," he wrote. "Its business as usual, pure and simple."