A new "massive Homeland Security Agency" can be much small then the sum of the current existing separate agencies, if it is done correctly. I think this is what Bush is trying to accomplish and that's why the Dems are fighting it.
Think this one through. If you have - say ten agencies and combine them as-is into one - what do you get? A more massive bureaucracy? No, you get the same overall size that you had before. What do you get if you have a Republican president, combine agencies, and insist on non-unionized labor agreement? You get a conservative solution to a piece-meal, inefficient, ineffective bureaucracy. I think a massive consolidation of multiple organizations and eliminating the redundancies is conservative. That's why GWB is insisting on the non-union (i.e entitlement) situation.