Two senators working on legislation that would overhaul U.S. intelligence agencies said Thursday a new intelligence chief should have significant and clear power over the budget.

"My support for providing significant budget authority for the new national intelligence director has been strengthened," said Sen. Susan Collins (search), chairman of the Senate Governmental Affairs Committee. The Maine Republican spoke after a closed hearing with senior officials from the Pentagon, CIA and FBI.

The committee's top Democrat, Sen. Joseph Lieberman (search) of Connecticut, added, "A strong case was made that if you are going to create a national intelligence director, it can't be a phony, it can't be cosmetic. It's got to be real and the way to make it real in this town is with budget authority."

President Bush has endorsed the two main recommendations of the commission appointed by Congress to investigate the Sept. 11 attacks: creating a national intelligence director (search) and a national counterterrorism center.

Still, broad differences of opinion exist about how much power that director would have, both over policy and the purse.

Collins and Lieberman, at the request of Senate Majority Leader Bill Frist and Democratic leader Tom Daschle, are working to present the full Senate with an intelligence bill by the end of September. Lieberman said the goal was to win passage before Congress leaves for the November elections.

Collins said it was understandable that the Pentagon, which currently controls roughly 80 percent of the intelligence budget, was not eager to give up authority to a new office. But she said the Bush administration has made it clear that it supports both the new director and counterterrorism center.

She said both ideas were endorsed by Stephen Cambone, undersecretary of defense for intelligence. He did not talk to reporters after the closed hearing Thursday.

In unclassified prepared statements, Cambone noted the president's support for change, while adding a cautionary note: "If we move too unwisely and get it wrong, the penalty will be great."

Larry Kindsvater, the CIA's deputy director for community management, said in his prepared remarks that if Congress and the president "want someone that is truly in charge of the community," then increased authority, "including full control over National Foreign Intelligence Program budget, personnel and management, is needed."

Collins said she was surprised to learned how much control the Pentagon now exercises over the intelligence budget "despite the clear statutory authority that gives that responsibility to the director of the CIA."

Lieberman pointed to a "real lack of clarity when it comes to budget matters about who is in charge. And one thing we will not allow to continue is that lack of clarity."

Both senators said they welcome ideas proposed from other lawmakers about how best to overhaul intelligence operations. That includes a plan by Senate Intelligence Committee Chairman Pat Roberts, R-Kan., that would break up the CIA and remove several intelligence agencies from the Pentagon.

Also Thursday, the House Veterans' Affairs Committee heard testimony on how the Veterans Affairs Department, which operates 158 hospitals and employs more than 15,000 physicians, can play a more active role in preparing for a national medical emergency caused by a terrorist attack.

"From a national planning perspective, the VA is the only federal agency capable of assembling a large number of individuals to treat mass casualties," said the committee chairman, Rep. Christopher Smith, R-N.J. He urged the department to better cooperate with other medical responders.