The Constitution of the United States, Article I, Section 8:
The Congress shall have Power... To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water; To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; To provide and maintain a Navy; To make Rules for the Government and Regulation of the land and naval Forces; To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;Article II, Section 2:
The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices, and he shall have Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment.
So: Congress decides if we go to war, how large the armed forces should be, how much to fund them and how long to fund them for. They say to the President, "we're at war now. Here's an army and a navy. You get this many people for this long. Command them in battle until then." Congress makes all the policy decisions and the President's role is simply to implement that policy with the tools they provide him. The framers did so deliberately; they were in the process of overthrowing a tyrant and wanted to structure their new government in a way that specifically excluded the executive from war policy. They correctly perceived that vesting such powers with a single individual is dangerous in any event and especially dangerous when the individual in question is a little...nutty.
Congress should have long ago reviewed the Authorization for Use of Military Force and decided if Iraq's WMD programs, defiance of UN resolutions, or anything else in it were still operative (answer: "no"). It could have been immediately replaced by a new one with new goals at no risk to soldiers; the only danger would be political. Instead of revisiting the original (or some theoretical new) authorization this week we went through the looking glass and watched Congress ask David Petraeus and Ryan Crocker if it was acceptable to continue the war.
There is a small chance they will consult the Constitution before making their next move, and here's what it would look like if they did. They would tell the President that they are the ones setting policy, that the original reasons for the war no longer apply, revoke the authorization and tell the Pentagon to draw up a smart, timely redeployment schedule. If he wished to continue the war he or his allies in Congress could draft a new authorization and debate it before the nation. George Bush has been his usual brilliant political self by casting the debate in terms of eye-glazing military minutia. Congress could immediately reframe the debate, seize the advantage on it and be faithful to their oaths with one swift move. Their history doesn't make that too likely, but it deserves to be said that the remedy exists and is in the Constitution.
One more point. Congress has gotten into the lazy, cowardly and irresponsible habit of passing authorizations of force instead of declaring war. Wikipedia has a section called "Controversy regarding U.S. declarations of war" on this page that goes over how we've sent soldiers into combat without declaring war, and the benefits of doing so. The Iraq war shows the degree to which the hazards outweigh the benefits. America spends more on its military than the rest of the world combined and the last fifty or so years have shown that Presidents find it almost intolerable to have such a magnificent force and not take it out for a spin every now and then. After all, you don't spend a lot of money on a sports car to drive it through school zones, right? We need to acknowledge that enormous temptation by doing away with authorizations of force and going back to a literal reading of the Constitution. That means, no soldiers in combat unless we declare war. Ever. If we had declared war on Iraq in 2002 instead of "authorizing force" (a nauseating and Orwellian euphemism) do you think we would still be at war now? Once Saddam was hung and elections were held we would have concluded the war was over and been spared the seemingly endless drift and drain of an undefined, open ended commitment.
Actually, if Congress had to formally declare war before combat could begin we may have avoided it entirely. I'm sure the war-first jackals would have howled with outrage and thrown the worst accusations all around and every bad development afterward pinned on not starting a war, so could we please take a mental snapshot right now and put it in a time capsule? Perhaps it could be unearthed when their descendents are baying for the next one. If we are faced with a truly grave threat a formal declaration of war would likely be a minor obstacle. If it's a war of choice being sold as a grave threat then ulterior motives are involved and perhaps someone will point out that incompetence, corruption and unintended consequences are more likely to determine the outcome than the finest plans and noblest intentions.