The Bush Administration has reportedly rejected the compromise bill negotiated between Democrats and Bush's own Director of National Intelligence Michael McConnell to close the so-called "intelligence gap," which was created when a secret spying court reportedly knocked down a key pillar of the government's secret spying program.
The emergency negotiations resulted in proposal (.pdf) from Democrats that would have allowed the spymasters at the National Security Agency to create outposts on domestic communications networks in order to spy on foreign to foreign and some foreign to domestic emails and phone calls. Marty Lederman summarizes the gist of the negotiations.
But as Lederman and Talking Points Memo report, President Bush rejected the proposal, likely because it includes an oversight role for both the secret Foreign Intelligence Surveillance Court and the Justice Department's own Inspector General. The Administration may fear giving access to either of these entities, since the former reportedly is the cause of the "intelligence gap" and the latter issued a scathing report in March finding that the FBI broke the law and misused a key Patriot Act power known as a National Security Letter.
The government wants the ability to grab both foreign to foreign and foreign to domestic communications and the ability to order the nation's phone companies, ISPs and broadband pipe owners to give the NSA access to their networks. The compromise, which is anathema to privacy groups, would allow the government to issue those orders, but allow the secret court and the Inspector General to audit the government's methods to make sure citizens' Constitutinal rights were protected.
http://blog.wired.com/27bstroke6/2007/08/bush-administra.html