Lots of news today on the Bush Administration's surveillance measures. The skinny of it so far is that, under current law, the president has the power to conduct domestic surveillance on Americans or others pending approval by court under the Foreign Intelligence Surveillance Act (FISA). In order to expedite that process, however, the President can authorize surveillance immediately as long as then seeks a retroactive approval of his actions within 72 hours. Furthermore, the court almost never denies such requests (estimates lie between 0 and 6 denials in 15,000 requests), so the President doesn't exactly have his proverbial hands tied here.
The problem with W's actions, however, lie in the fact that he decided that he doesn't even have to ask the court at all to spy on Americans on American soil.
For more on the nitty gritty of the issue, I'd suggest going over to Talking Points Memo: Josh, as usual, is all over this and has some great insights. Arguments from the Administration and their congressional/journalist cronies are weak and being pretty soundly debunked all over the place: Kos has the latest on such developments (I'm only linking to the general websites here, and not specific articles, because both sites are watching this closely and a number of posts worth looking at). For instance, AG Gonzalez is claiming that the congressional authorization of force in Afghanistan gave the president this ability, even though he also admits that the Administration didn't seek a specific resolution for this in Congress because even a congress dominated by the President's own party wouldn't pass it (here's a collection of legislators of both parties saying that the resolution does not allow the president to set aside the laws).
This is big; more to follow.