In his latest budget proposal, US President George W Bush has given top billing to the war on terrorism by earmarking an eye-popping $41.3 billion -- one per cent more than last year -- for homeland security.

The proposal plans to strengthen communications, disaster preparedness, power and transportation systems, and covers a wide range of responses to terrorism, from bio-preparedness to new technology to protecting critical infrastructure.

Most of the $41.3 billion will go towards funding the Homeland Security Department's first year of full-fledged operation. Headed by Tom Ridge, the new department began functioning in January.

It has earned enormous media attention, as well as plenty of congressional debates and some soul-searching from lawmakers.

The Homeland Security Department's vast powers include immigration, disaster response, protection of airports, ports and borders, and the Secret Service -- the agency that protects the president.

According to the proposals, the Homeland Security Department's research and analysis branch will receive a large increase in funds.

The branch studies areas of vulnerability to terrorist strikes and comes up with counter-terror measures, including new technologies.

The Office of Domestic Preparedness, which includes fire fighters and policemen, will receive around $3.5 billion, which is the same as the previous year.

The latest proposals earmark $400 million for vaccines to contain biological weapons, $300 million for communications and $373 million for border security, including radiation detection and X-ray machines for cargo containers.

The budget for the fiscal year 2004, which begins in October, has a record deficit of more than $300 billion.

Interestingly, George Bush Sr held the previous record for the biggest budgetary deficit -- $290 billion.