The Senate overwhelmingly passed the legislation 89-2, one day after the House easily pushed through the compromise strongly endorsed by President Bush.
"The world has changed," said Sen. Joseph Lieberman, D-Conn. "Our terrorist enemies today make no distinction between soldiers and civilians, between foreign and domestic locations when they attack us."
The Sept. 11 terrorist attacks three years ago on New York City and Washington, which killed nearly 3,000 people, proved that the intelligence operation established in World War II and modified afterward to fight communism wasn't effective enough against the threats of the new century, senators said Wednesday.
"We are rebuilding a structure that was designed for a different enemy at a different time, a structure that was designed for the Cold War and has not proved agile enough to deal with the threats of the 21st century," said Senate Governmental Affairs chairwoman Susan Collins, R-Maine.
Sens. Robert Byrd, D-W. Va., and James Inhofe, R-Okla., voted against the bill, with Byrd saying that it was folly to expect a law to make America safer from foreign terrorists.
"No legislation alone can forestall a terrorist attack on our nation," Byrd said.
The House passed the bill on Tuesday, 336-75, after Mr. Bush endorsed it and House Republicans satisfied themselves that the measure would not negatively affect the nation's military.
Congressional approval was a victory for the president, whose leadership was questioned after House Republicans refused to vote on the bill two weeks ago despite his urging.
The legislation, which amounts to the biggest change to U.S. intelligence gathering and analysis since the creation of the CIA after World War II, would:
The bill also included a host of anti-terrorism provisions, which would:
The Sept. 11 commission, in its July report, said disharmony among the nation's 15 intelligence agencies contributed to the inability of government officials to stop the 2001 attacks that killed nearly 3,000 people in New York City, Washington and Pennsylvania.
The new structure should help the agencies work together to prevent such disasters in the future, lawmakers said.
"The organization puts one person in charge," Rep. Jane Harman, D-Calif, told CBS News' The Early Show. "That's what we all fought for. We fought for what we call a unified command across the intelligence agencies. This is much like what we have across the military departments. Otherwise, you can't fight one war. And that's why we lost clues leading up to 9/11. Each agency behaved like its own so-called stovepipe and hoarded information."
Heavy and persistent lobbying by the bipartisan Sept. 11 commission and families of attack victims kept the legislation alive through the summer political conventions, the Nov. 2 elections and a postelection lame duck session of Congress.
House GOP leaders held up action on the bill for two weeks because Armed Services Committee Chairman Duncan Hunter, R-Calif., was concerned that the new intelligence director might be inserted into the chain of command between the president and military commanders in the field.
Hunter and the bill's negotiators came to an agreement Monday on language clarifying the president's control.
Some Republicans, however, still weren't satisfied. House Judiciary Committee Chairman James Sensenbrenner, R-Wis., was upset because the bill wouldn't prohibit states from giving driver's licenses to illegal immigrants or change asylum laws to make it more difficult for terrorists to get into the country.
Other Republicans said they opposed the entire overhaul bill because they saw it as useless.
"I believe creating a national intelligence director is a huge mistake," said Rep. Ray LaHood, R-Ill. "It's another bureaucracy, it's another layer of government. It would not have prevented 9/11 and it will not prevent another 9/11."