"For our airways there is one supreme priority, security," Mr. Bush said. "For the first time, airport security will become a direct federal responsibility."
The bill-signing ceremony was held at Reagan Washington National Airport, which was the last major U.S. airport to reopen following the Sept. 11 terrorist attacks.
The final legislation was the product of weeks of negotiations in Congress, and it contains provisions that Mr. Bush opposed.
The measure requires the federal government to hire about 28,000 airport baggage screeners within a year, effectively putting private airport security companies out of business.
Mr. Bush had wanted most of them to remain employees of private companies, to give airports, airlines and the government more flexibility in hiring and firing them.
But in a compromise for Republicans, after two years airports would be able to opt out of the system and go back to letting private companies do the baggage screening if they wish.
The president noted the differences of opinion, but said passage of the measure was a fresh sign of the nation's unity after the terrorist attacks.
"Security comes first. The federal government will set high standards. And we will enforce them," he said.
The legislation will cost an estimated $2.5 billion to $2.6 billion. Airline passengers will pay up to $5 per one-way trip to help finance the new security measures which will also add to airport delays.
The measure also moves toward 100 percent inspection of checked bags and seeks to ensure that a potential hijacker who gets into a plane will be stopped by air marshals in the cabin and reinforced cockpit doors. The Transportation Department may authorize pilots to have weapons in the cockpit of their planes.
Among the more immediate effects of the new law will be a heightened law enforcement presence. The package requires at least one law enforcement officer at every screening post at major airports.
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Congress began work on the measure not long after the Sept. 11 suicide hijackings that killed thousands in New York, Washington and Pennsylvania.
The compromise legislation passed the House on Friday, in a 410-9 vote just hours after it was endorsed by the Senate on a voice vote.
Congressional agreement on the bill came as Capitol Hill felt the pressure of the Thanksgiving holiday, the heaviest traveling season of the year.
"As families prepare for the biggest travel day in the nation they can feel assured that airport security will be strengthened nationwide, the very moment the president signs this landmark legislation into law," said Sen. Max Cleland, D-Ga.
Sen. John McCain, R-Ariz., predicted that the new law will have a "major, major impact on the American people" who are reluctant to board an airliner because of fears that air travel is not safe.
But even as Congress voted to strengthen airline security, fewer Americans were planning to travel by air this Thanksgiving, according to the AAA. The travel and advocacy group, formerly known as the American Automobile Association, forecast 4.6 million people traveling by air, a 27 percent decline from last year's 6.3 million.
In a CBS News poll taken just after the crash of American Airlines Flight 587 in New York, 56 percent of Americans said the government had not done enough to improve airport security and two-thirds said the airlines had not sufficiently tightened airport security, about a 15 percentage point increase in both categories since late October.
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