US President George W Bush has signed a defence spending bill that tops $400bn for the first time since the Cold War.
The president said the US armed forces were engaged in a great and historic task to confront terrorism.
The money includes an average 4.15% pay rise for US troops, as well as controversial funding for research into new types of nuclear weapons.
In a ceremony at the Pentagon, Mr Bush said the US faced enemies who measured progress by chaos, fear and death.
FIVE BIGGEST DEFENCE BUDGETS
The $401.3bn defence bill was approved by Congress earlier this month, although separate legislation is needed before the money can actually be spent.
"We will do whatever it takes to keep our nation strong, to keep the peace and to keep the American people secure," Mr Bush said.
The BBC's Pentagon correspondent, Nick Childs, notes that despite Mr Bush's upbeat speech and the huge sums of money involved, questions have been raised even at the Pentagon as to whether the United States knows if it is winning the so-called global war on terrorism.
The funding bill includes:
'Greater sacrifice'
The president praised US forces who were now "facing greater sacrifice" and he congratulated Defence Secretary Donald Rumsfeld for "doing a fantastic job for America".
"America stands with the United States military," the president said.
On Monday, a top Pentagon planning official warned of the continuing challenge facing America in Iraq, where it has some 140,000 troops deployed.
"Our enemies are well-financed, well-armed and motivated..." Under Secretary of Defense for Policy Douglas Feith told a conference in Washington.
"No one should underestimate the difficulty of our mission," he said, adding that the US would, nonetheless, prevail.
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