"As governments fight the enemies of democracy, they must uphold the principles of democracy," Bush said during remarks at a White House celebration of Hispanic Heritage Month.
Putin announced the plan as part of his effort to deal more effectively with terrorism after heavily armed militants took more than 1,200 hostages in a school in southern Russia, killing 338 people.
Putin's moves have renewed fears that he is concentrating too much power in the Kremlin and setting back democratic development. The State Department on Tuesday signaled the Bush administration's displeasure on Tuesday.
Russian officials have suggested they are annoyed that the United States has indicated the best way to halt terrorism is through a political settlement in Chechnya (search). Yet Bush said that in a conversation with Putin this month he reaffirmed U.S. support for Russia in the fight against terrorism.
"I told him that we stand shoulder to shoulder with him in fighting terror," Bush said, and "that we abhor the men who kill innocent children to try to achieve a dark vision."
Bush added that he has since developed new concerns "about the decisions that are being made in Russia that could undermine democracy in Russia,
He said, "Great democracies have a balance of power between central governments and local governments, a balance of power within central governments between the executive branch and the legislative branch and the judicial branch."
Those comments were similar to an opinion article by Secretary of State Colin Powell published last January in the newspaper Izvestia as he was making an official visit to Moscow. The article said that "essential balance" is lacking among the various branches of the Russian government.