If Bush truly wanted to turnaround the INS he never would have installed a self-professed Open Borders Libertarian like Ziglar to head up the agency. So I'm not sure what you see in any so-called reforms that the Bush administration is making, aside from some cynical window dressing. As for needing to declare martial law for halting immigration from the Middle East don't make me laugh. How do you come to this conclusion? In fact, this action lowers the chance that the Feds may someday have to declare martial law by reducing Americas exposure to terrorists.
To my knowledge, Bush cannot circumvent a law made by congress unless he does it under war powers(which were not granted to him)or a act of Congress. I can see Congress putting a hold on only immigration from the evil empires but they do not have political cover to do more.
Immigration is a political hot potato. No matter what you do, someone is POd. The Mexicans have lodged a complaint with the American goverment for arresting those illegals in the Phoenix airport last week.(just a minor example) And they had falsified documentation!(surprise!)
This stuff takes time.