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According to Wikipedia (for what that is worth):

Opposition
On February 7, 2007, Sen. Patrick Leahy (D-VT) and Sen. Kit Bond (R-MO) introduced legislation that would revert the Insurrection Act to its previous state.[2][3] Sen. Leahy argues that the modifications to the law make it unnecessarily easy to assert federal authority over national guard elements without the consent of governors, and that the changes removed a "useful friction" that existed between the Insurrection Act and the Posse Comitatus Act.

Senator Leahy remarked on September 19, 2006 [4] "we certainly do not need to make it easier for Presidents to declare martial law. Invoking the Insurrection Act and using the military for law enforcement activities goes against some of the central tenets of our democracy. It creates needless tension among the various levels of government – one can easily envision governors and mayors in charge of an emergency having to constantly look over their shoulders while someone who has never visited their communities gives the orders."

No mention of Section 1076 was made in the President's statement about H.R. 5122. While this section was in effect [5], it allowed the President to declare a public emergency and station the military anywhere in America and take control of state-based National Guard units without the consent of the governor or local authorities.

Criticism in 1997 of weakening the PCA (Posse Comitatus Act) and using the federal military for domestic conditions charged that it endangered the military and the U.S. [6]:

The PCA's exceptions-in-name and exceptions-in-fact endanger the military and the United States by blurring the traditional line between military and civilian roles, undermining civilian control of the military, damaging military readiness, and providing the wrong tool for the job. Besides the current drug interdiction exceptions, the 104th Congress considered two bills to create new exceptions to the PCA. The Border Integrity Act would have created an exception to allow direct military enforcement of immigration and customs laws in border areas. The Comprehensive Antiterrorism Act would have allowed military involvement in investigations of chemical and biological weapons. [...] Increasing direct military involvement in law enforcement through border policing—an exception-in-fact—is an easy case against which to argue. Investigative support—an exception-in-name—is passive, indirect enforcement. Drug interdiction—an exception-in-name for the most part—falls between border policing and investigative support because of the extensive military involvement.

This case was also argued by the Departments of Justice and Defense in 1979 [7]:

The [PCA] expresses one of the clearest political traditions in Anglo-American history: that using military power to enforce the civilian law is harmful to both civilian and military interests. The authors of the [PCA] drew upon a melancholy history of military rule for evidence that even the best intentioned use of the Armed Forces to govern the civil population may lead to unfortunate consequences. They knew, moreover, that military involvement in civilian affairs consumed resources needed for national defense and drew the Armed Forces into political and legal quarrels that could only harm their ability to defend the country. Accordingly, they intended that the Armed Forces be used in law enforcement only in those serious cases to which the ordinary processes of civilian law were incapable of responding.

These changes were repealed in their entirety in 2008.

So I don't think this is the case (oh, and thank Kit Bond and Pat Leahy of all people for repealing this and making it harder for Emperor Hussein to declare martial law...) The changes described above were repealed in their entirety by HR 4986: National Defense Authorization Act for Fiscal Year 2008 (full text)SEC. 1068. All changes have been repealed, and have changed back to the original state of the Insurrection Act of 1807