Democratic senators on Wednesday denounced the plan as "crazy" and "mindboggling" in light of a new warning that al Qaeda may try more suicide hijackings.
"Cuts in air marshals should not happen now, and it should not happen ever," said Democratic Senator Barbara Boxer of California.
That hijack warning prompted an order from the Transportation Security Administration directing U.S. airlines to immediately begin more intensive screening of travelers flying out of a foreign airport into the United States, then connecting to another foreign destination.
As for the marshals program, a key Republican said he was adamantly opposed to any effort to shift money away from it.
"It is foolish to even consider cutting back the number of air marshals on commercial flights," said Rep. Harold Rogers of Kentucky, chairman of the House Appropriations subcommittee that handles the Homeland Security Department's budget.
Separately, the department was to announce plans Thursday to begin testing a program to assign a threat level to all airline passengers. Privacy advocates had criticized the passenger screening program, fearing it could lead to unconstitutional invasions of privacy and database mix-ups that could brand innocent people as security risks.
The Computer Assisted Passenger Prescreening System was ordered by Congress after the Sept. 11, 2001, terrorist attacks. As originally conceived, it was to develop a nationwide computer system that would check such things as credit reports and consumer transactions and compare passenger names with those on government watch lists.
But Nuala O'Connor Kelly, Homeland Security's chief privacy officer, said Wednesday the program would be narrowed to exclude credit history or medical records. It will use government data on people as well as information from commercial databases.
People will have a right to write or call in to find out what's in the database about them, Kelly said. The program will be tested using the names and addresses of real people for several months at a secure government location.
The government also is moving to close a big aviation security loophole, reports CBS News Correspondent Peter Maer.
It's called traveling without visa, a system that allows hundreds of thousands of international travelers to use U.S. airports as transfer points to other destinations.
The Homeland Security Department is considering ending the practice, following intelligence indicating terrorists might try to use it to sneak into the U.S. or again use aircraft as weapons. All travelers switching flights in the U.S. could be required to have visas soon.
Meanwhile, the government is urging airlines to tighten security involving passengers without visas.
The Transportation Security Administration asked Congress last Friday for permission to cut $104 million, or about 20 percent, of the funding for the air marshals program to help offset the agency's $900 million budget deficit. That set off an uproar on Capitol, reports CBS News Correspondent Bob Fuss.
The next day, Homeland Security, the TSA's parent agency, sent an advisory to airlines and law enforcement agencies warning that al Qaeda may try more suicide hijackings.
It's unclear how many of the estimated several thousand air marshal jobs could be affected by the proposed cuts.
"I have talked to people in Homeland Security, from the top down, and privately, they will admit they don't have enough money to do the job," said Sen. Charles Schumer, D-N.Y. "This sorry episode won't be the last. Every time there's a problem in one place they pull money out of another."
Homeland Security spokesman Brian Roehrkasse said Wednesday that the proposed budget cut actually is $74 million because the air marshals had $30 million left over from last year. That would mean the cuts would apply only to an increase in support staff and some advanced training, he said. There are no plans right now to cut air marshal jobs, he said.
Lawmakers also were upset by reports that air marshals had received a directive saying they would no longer be allowed to fly missions requiring overnight stays to save money on hotel bills. Such a move would reduce the number of cross-country and international flights with marshals on board.
A Homeland Security official, speaking on condition of anonymity, said no directive was sent by the agency. It was not clear whether the idea has been abandoned.
"The administration insists on trying to convince us that, although we are not funding Homeland Security at the levels that everyone knows we need, that somehow they can make do," said Sen. Hillary Clinton, D-N.Y.
Asa Hutchison, undersecretary for border and transportation security, sent a memo on Wednesday authorizing other federal law enforcement agencies to augment the air marshals.
Still, Democrats accused the administration of scrimping on resources needed to defend Americans against terrorists.
"The word came categorically down from the White House they've got a scheme and a plan on course, 'Let's cut the taxes, cut the taxes, cut the taxes,' and then to sort of make it look legitimate, cut all spending," said Sen. Ernest Hollings, D-S.C.
With an average of 35,000 flights in the United States every day, the marshals can't fly on every plane. But the possibility that they might be on a flight is a deterrence, most agree.