President Obama has announced the National Security Administration reforms he believes the administration and Congress should pursue, treading a careful line between addressing the concerns of privacy and civil liberties advocates as well as the intelligence committee and industry.
On the primary issue that has created so much backlash—bulk collection of phone metadata from Americans—Obama is largely punting, preserving the program but ordering his administration, in consultation with Congress, to figure out how to change how and where the data is stored. He has also ordered that, effectively immediately, the NSA will "only pursue phone calls that are two steps removed from a number associated with a terrorist organization instead of three," somewhat reining in the "incidental" collection of data from people who are likely innocent bystanders.
He will not follow the recommendation of the advisory group he had created to review the program, who advised the transfer of all the data to the telecommunications companies, which it turns out the telecommunications companies wanted to no part of. He is also not following the recommendation that the NSA should have to seek a court order to access that data. This is still a very open question. Congress is now split between an effort by the reformers to end the program entirely (Sen. Patrick Leahy [D-VT] and Rep. Jim Sensenbrenner [R-WI] have legislation to do that) and Sen. Dianne Feinstein (D-CA) who would codify it. He has also asked Attorney General Holder and intelligence officials to report back to him at the end of March with ideas on how the bulk data collection can continue without the NSA holding the information. His policy directive [pdf] also instructs the Director of National Intelligence (DNI) to study and report back to him in a year whther it's feasible to create software to collect more targeted data, rather than just sucking up everything.
In terms of transparency, he is directing the DNI to review Foreign Intelligence Surveillance Court (FISC) opinions "with broad privacy implications" to see what should be declassified. He is also asking Congress to "authorize the establishment of a panel of advocates from outside government to provide an independent voice in significant cases before the Foreign Intelligence Surveillance Court."
He has also ordered that the DNI and officials come up with additional restrictions on the government’s ability to retain, search, and use in criminal cases, communications between Americans and foreign citizens incidentally collected under Section 702. Those protections have yet to be developed, but it's likely Congress will want to weigh in on this, as well.
The FBI uses National Security Letters to investigate potential crimes, sending these NSLs to private companies who must provide the private information of their customers, but cannot tell their customers that their data has been shared. Obama has "directed the Attorney General to amend how we use National Security Letters so this secrecy will not be indefinite, and will terminate within a fixed time unless the government demonstrates a real need for further secrecy." He also says that the government "will also enable communications providers to make public more information than ever before about the orders they have received to provide data to the government."
Congress still has a critical role in this, as it should. It's appropriate that Obama turn to Congress to some of the more critical issues, though it is well within his power to end the bulk collection of data straight up, because Congress should be involved in this process. Congress must be involved, must once again provide the oversight that the Constitution requires of it.