Bush said the United States is "leading the civilized world in a titanic struggle against terror," with 60,000 troops deployed worldwide, but it was time for the United States to secure its homeland.
"Right now, as many as a hundred different government agencies have some responsibilities for homeland security. And no one has final accountability," Bush said.
"Employees of this new agency will come to work every morning knowing that their most important job is to protect their fellow citizens."
In a startling political turn around, Bush abandoned months of opposition to forming a large new government bureaucracy. His proposal Thursday night will create the largest single civilian agency in government; bigger than the armies of several countries including the United Kingdom.
If approved by Congress, Homeland Security would have several small air fleets, armed warships and more armed law enforcement officers than the Department of Justice, FBI, CIA or any U.S. police agency. The annual budget estimated is $37 billion but that does not include the non-terrorism activities of some agencies that would come under Homeland.
The president made his announcement in a televised 11-minute address arranged Thursday morning after the White House unexpectedly announced that Bush would propose the new department. White House Homeland Security Director Tom Ridge and White House Chief of Staff Andrew Card had been studying how to handle this question since April but were not expected to report until July.
The dramatic announcement comes as the Congressional Joint Intelligence Committee and the Senate Judiciary Committee are conducting hearings on how security agencies failed to act on significant leads about the Sept. 11 attack.
On Thursday, the Judiciary Committee heard testimony from FBI Director Robert Mueller and Colleen Rowley, an FBI agent who wrote a blistering critique of how she and other agents were frustrated in the investigation of a man who was later accused of being the "20th hijacker."
Commenting on the timing, Sen. Charles Grassley, R-Iowa, one of the more vociferous critics of the FBI in Congress, said: "All I can do is hope that the White House has not used this to detract from legitimate oversight of the FBI.
"Everyone knows that not all is right with the FBI," Grassley told CNN.
"The Department of Homeland Security will be charged with four primary tasks," Bush said, including border security, working with state and local authorities and bring together what he called "our best scientists" to develop technologies that detect biological, chemical and nuclear weapons."
"And, " Bush said, "this new department will review intelligence and law enforcement information from all agencies of government, (to) produce a single daily picture of threats against our homeland." This proposal seemed to touch on the failure of the FBI and CIA to coordinate intelligence reports that might have led to the perpetrators of the Sept. 11 attacks.
"Based on every everything I have seen, I do not believe anyone could have prevented the horror of September the 11th," Bush said. But he exhorted federal agents to report everything they spot. "If you are a frontline worker for the FBI, the CIA, some other law enforcement or intelligence agency, and you see something that raises suspicions; I want you to report it immediately."
The list of agencies or activities that will fall under the new department is dizzying.
It will have total control of America's borders, from sea to shining sea, and along some 7,000 miles of land borders with Mexico and Canada. In controlling borders alone, Homeland Security would bring under its control the 22,000-strong U.S. Customs Service, the 40,000 employees of the Immigration and Naturalization Service and the Border Patrol, the 43,700-person U.S. Coast Guard and a Transportation Security Agency now budgeted for 41,300 employees.
Homeland Security will be responsible for every plane, ship or truck that leaves or enters the country and for transportation security within the country. Under some proposals it would place numerous elements abroad to pre-screen cargo and passengers headed for the United States.
The job is an astounding one. The United States receives 5.7 million cargo containers every year and 600 million passengers fly on American aircraft in an annual period. There are 95,000 miles of coastline and 430 major airports to police.
The new agency will include elements of eight government agencies and coordinate everything from biological warfare response to emergency preparedness. It will subsume the 6,000-person Federal Emergency Management Agency and through that agency open national training programs for first emergency responders and assist police and fire agencies prepare for terrorist attack. FEMA will remain the key agency for all other national emergencies.
As the administration conceives of the plan, agencies like the Secret Service or the Coast Guard will continue all their functions like protection of the president or maritime safety as well as Homeland Security.
The initial response of both Republicans and Democrats in Congress was favorable. "All to often, homeland security has fallen through the cracks of an overlapping bureaucracy," said House Speaker Dennis Hastert, R-Ill.
But Democratic Sen. Ted Kennedy of Massachusetts raised a faint warning when he noted, "We need a well-organized, efficiently run office that works in coordination with existing law enforcement and intelligence agencies not another bureaucracy."
"The proposal of the White House was developed with little or no input from experts or federal agencies with the result being a haphazard plan that would load the new department down with a huge bureaucracy and responsibilities that have nothing to do with preventing terrorism," Obey said in a statement.
When Tom Ridge was doing his planning, he noted in one briefing that there were 88 different congressional committees and subcommittees that had oversight over some element of homeland security. Many in Washington anticipate the president's plan will open up a massive bureaucratic fight on Capitol Hill.
A senior administration official -- briefing reporters before the speech -- said members of Congress have long had an intricate committee system and the White House would not "presuppose to give them direction as to how to deal with the challenge of reorganizing."
The two agencies most severely depleted by Bush's plan are the Department of Treasury and the Justice Department. Some activities like Customs, primarily a tax collecting function, have been in Treasury for 200 years.
Bush did not Thursday nominate Ridge, a former Pennsylvania governor, to head the new agency, but White House Spokesman Ari Fleischer cautioned that this should not suggest that Ridge would not be the president's choice.
Fleischer -- speaking before the speech -- said Ridge and Card are key to designing and forming the new agency.
Last fall, when Bush named Ridge to head a White House Office of Homeland Security, there was widespread criticism that the job was too big for a White House office and needed a major Cabinet agency with a budget and a leader who defends its mission in Congress.
Fleischer said the White House office would remain active. Several members of Congress, including Connecticut Sen. Joe Lieberman, the Democratic nominee for vice president in 2000, had proposed their own plans for a homeland security agency. Fleischer said Bush's plan is similar to Lieberman's. Lieberman, too, predicted there would be a battle on Capitol Hill.
Fleischer at the morning briefing made efforts to mute criticism of Bush for waiting months to launch the new agency and suggested that it was not a major increase in the government's size but a reordering of existing agencies.
Bush came to office on the ticket of reducing the size of the federal government, but in the wake of the Sept. 11 terrorist attacks, he has had to propose almost $200 billion in different kinds of military, intelligence and security activities to be developed over the next decade. His 2003 budget called for $19 billion in additional funds for homeland security.
In the past nine months, Ridge has had great difficulty organizing Homeland Security steps and many security programs are not under way or have been criticized as ineffective.
The reorganization, the biggest change since Truman brought intelligence operations under one department and created the CIA in 1947, is expected to generate massive political debate. Agencies facing huge loss of power and influence will resist the move and it will change the structure of congressional oversight.
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