At the time this was widely regarded as his attempt at witty repartee, although one of dubious comedic merit. Since then, however, we have come to see that this was not whimsy, but revelation.
George W. Bush is gradually assuming "unitary executive" powers. The unitary executive theory is an extreme interpretation of the Constitution that contorts its words to mean that the President, in furtherance of his notion of what constitutes the nations security, is free to violate any laws and do so entirely in secret. President Bush has relied on this doctrine, promulgated by former Justice Department Legal Counsel John Yoo, in many of his decisions.
His operatives clandestinely wiretap American citizens without demonstrating probable cause of any offense, as required by the Constitution and have even claimed the right to break into houses and offices without court approval and without ever revealing its having been done.
People are subject to "extraordinary rendition", a hideous policy whereby a totally harmless person is secretly shanghaied to a foreign country to be tortured for months or years based on mere suspicion of a connection to "terrorists" (itself a poorly defined term not part of the legal lexicon). This is not merely a theoretical possibility; it was recently done by Bush operatives to a Canadian citizen.
The President claims, and has exercised, the right to make war on any sovereign country that he deems to be not sufficiently deferential to American hegemony. Iran is currently in his sights and may be bombed at any time under authority of the unitary executive.