Many issues are raised by the claim, by "Scooter" Libby, that President Bush declassified and thus authorized disclosure of previously classified material relating to the question whether Iraq had, or was seeking, weapons of mass destruction. Some of these issues have long-term as well as short-term interest, so it is worthwhile to try to sort them out.
It appears to be true that the President has the legal authority to declassify classified materials however he chooses. This conclusion is supported by dicta in Department of Navy v. Egan, 484 US 518 (1988), and it is consistent with the historical fact that classification and declassification decisions have been made by the President. (On the relevance of historical facts, see Justice Frankfurter's separate opinion in The Steel Seizure Case.) To be sure, Congress might have the power to limit the President's power to classify and declassify (though the President is likely to resist any such limitation on constitutional grounds) -- but no such limitation appears to be in place.
It is also true that the President could, by executive order, impose substantive and procedural limits on declassification decisions by the entire executive branch, including himself. But the currently governing order, E.O. 13292 (amending E.O. 12958, as amended), seems to be best read not to limit the President's own declassification authority. There are some wrinkles here. See in particular section 3.1(b), which notes, "In some exceptional cases, however, the need to protect [classified] information may be outweighed by the public interest in disclosure of the information, and in these cases the information should be declassified." This section goes on to refer to the decision of the "agency head or the senior agency official," but the reference should probably be understood in the context of ultimate presidential control of classification and declassification decisions.
The legal point is only one side, of course. In assessing declassification decisions, it is important to distinguish among the following: 1) a declassification decision designed to inform the public (fine); 2) a declassification decision designed to correct a widespread misunderstanding of why the President did something (a subset of 1), and also fine, and claimed by some of the president's defenders here); 3) a declassification decision that jeopardizes national security (to say the least, not fine -- but to my knowledge, not alleged thus far with respect to the President or Vice President); 4) a declassification decision that discloses the name of a CIA agent (almost always a subset of 3), and to say the least, not fine -- again, not alleged thus far with respect to the President or Vice President); 5) a declassification decision that represents, in context, an effort not only to defend the President but also to mislead the public (not fine, and alleged by some of the President's critics here).
The debate, right now, seems to be whether the declassification decision at issue falls in category 2) or category 5).