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The president's remarks came the morning after the Senate handed the White House a major victory by voting to broaden the government's spy powers and to give legal protection to phone companies that cooperated in President Bush's program of eavesdropping without warrants.

A new U.S. intelligence institution will allow government spy agencies to conduct broad surveillance and reconnaissance inside the country for the first time. Contractors like Boeing, BAE Systems, Harris Corporation, L-3 Communications and Science Applications International Corporation are already lining up for possible work.