US troops will see an increase in their pay
The increase - of nearly 15% - will be the largest rise in US military spending in 20 years, he said in a speech to military reserve officers.
He said that his proposals were non-partisan, stating that there were no differences between the White House and Congress on the issue.
"I have no ambition whatsoever to use this as a political issue. There is no daylight between the executive and the legislative branches," he said.
"I have a responsibility to prepare the nation for all that lies ahead," he said.
"There will be no room for misunderstanding. The most basic commitment of our government will be the security of our country."
More security jobs
A White House official said the increase included $38bn for the pay rise and weaponry and $10bn in "war reserves".
The total defence budget will be $379bn.
Mr Bush was giving details of the $2 trillion budget that he will submit to Congress on 4 February.
For defence at home, the president said the budget would also call for the hiring of 30,000 airport security workers and an extra 300 FBI agents.
It will also be used to strengthen local police, fire and rescue departments.
In the wake of the anthrax attacks, there will be new equipment to improve mail safety and more research into bio-terror threats.
Mr Bush said that the war on terror had started in Afghanistan but it would not end there.
He spoke of the "shadowy enemy dwelling in dark corners of the earth".
Congressional debate
The president is expected to win the support of Congress for this defence budget boost, but not without debate.
Mr Bush has already been criticised by Democrats in Congress over the recession and the fact that his tax and spending cuts will put the US Government in deficit for the first time since 1997.
Republican Senator John Warner of Virginia, who is on the Senate Armed Services Committee, said he expected Congress to support the defence budget increase.
"In my opinion the Congress is going to be supportive of the president," Senator Warner told reporters. "The people of the United States are prepared and ready to support an increase of this size."
But Democratic Senator Daniel Inouye of Hawaii, who chairs the appropriations sub-committee on defence, was sceptical that Congress would support the big increase in these tight budget times.
"They'd be reluctant to, unless the president can justify it," he said.