WASHINGTON (AP) -- Moving to assert congressional authority, key lawmakers urged a select House panel Wednesday to make major changes in President Bush's proposed Homeland Security agency.

House Appropriations Committee Chairman C.W. Bill Young, R-Fla., and the panel's ranking Democrat, Rep. David Obey of Wisconsin, led a parade of powerful lawmakers who want to change Bush's proposed merging of 22 agencies and offices into a single Cabinet department.

Young and Obey said the House Select Committee on Homeland Security should reject Bush's request for authority to transfer up to 5 percent of the new agency's budget without congressional approval.

``In our view, the administration's transfer proposal is overly broad and unprecedented,'' Young told the panel.

Added Obey: ``It gives the agency, in effect, a totally free hand.''

White House spokesman Ari Fleischer told reporters it was no surprise that Congress would protect constitutional power of the purse but that Bush thinks the transfer authority is vital in confronting emerging or new terrorist threats.

The select panel was spending a long Wednesday listening to Republicans and Democrats on committees with jurisdiction over pieces of the new agency.

House Majority Leader Dick Armey, who chairs the select panel, said it would consider legislation Friday to create the department, with House floor action expected next week. That is when the Senate Governmental Affairs Committee chaired by Democrat Joseph Lieberman of Connecticut is set to vote on its version.

Armey, R-Texas, said that although the other panels ``have done excellent work,'' the select panel will not be bound by it -- or by the president's blueprint. ``We think the administration's proposal is a little top-heavy,'' he said.

Obey said Congress should make changes where necessary and not simply rubber-stamp the Bush plan.

``Don't grab the first tomato out of the box,'' Obey said. ``Reorganization will only improve our capability to protect ourselves if it is done well.''

The administration has pulled out the stops to lobby for its plan as is, sending eight Cabinet members to testify before the select panel. Key issues for the House panel to decide:

Whether to put the Federal Emergency Management Agency and the Coast Guard into the new department, as Bush wants. The House Judiciary Committee left both out; White House homeland security point man Tom Ridge called them ``critical to the operation of this department'' in an interview with Associated Press radio.

If the Immigration and Naturalization Service should be moved intact to the new agency, as suggested by Bush, or if it should be divided between Homeland Security and the Justice Department. House Judiciary Committee Chairman James Sensenbrenner, R-Wis., wants the INS's enforcement and processing duties under separate roofs.

How much authority to give the new department over health research at the Centers for Disease Control and Prevention and the National Institutes of Health. Health and Human Services Secretary Tommy Thompson says there would be ``collaboration'' between the two agencies that would ``strengthen homeland security and will not in any way harm our public health institutions.'' One House committee took an opposing view.

If the Secret Service should move from the Treasury Department to the new agency, as the president proposed, or be shifted to Justice, as the Judiciary Committee wants.

Whether to give the president authority to transfer up to 5 percent of the new department's budget to respond rapidly to new terrorist threats. Members of the House and Senate Appropriations Committees, responsible for how tax dollars are spent, have rejected that idea but administration officials continue to press for it.

Whether to permit the homeland security secretary greater flexibility in deploying personnel and resources to meet new or emerging threats. Democrats, backed by labor unions, say this threatens the civil service system and its benefits and protections, including those for whistle-blowers who speak out against agency wrongdoing.

The administration says the secretary would be hamstrung without those powers. Armey planned to offer a scaled-back version of the president's proposal that would permit the flexibility but specifically ensure none of the job protections are lost, according to aides.

Another major issue is the new department's ability to acquire and analyze intelligence from the CIA, FBI and other agencies. Some lawmakers say the new agency needs clear authority to obtain information so it can prevent terrorism and protect vulnerable areas.