LANDOVER, Md. (AP) -- President Bush, evoking the memory of Martin Luther King Jr., proclaimed Monday "there is still work to do" to fulfill the assassinated civil rights leader's dream of equality in America.

"It is fitting that we honor Martin Luther King in a church," Bush said, "because I believe, like you, that the power of his words, the clarity of his vision, the courage of his leadership, occurred because he put his faith in the Almighty."

"It is fitting that we honor this great American in a church because, out of church comes the notion of equality and justice," the president said at the First Baptist Church of Glenarden.

"Even though progress has been made," he said, "there is still work to do. There is still prejudice. ... There's still a need for us to hear the words of Martin Luther King so that the word of hope reaches everywhere in the land."

"As we remember the dream of Martin Luther King, and remember his clear vision for a society that's equal, a society full of justice, this society must remember the power of faith," Bush said. "This government of yours must welcome faith, not discriminate faith, as we deal with the future of this great country."

To strong applause, he noted that while the government can write checks through various assistance programs, "it can't put hope in people's hearts."

Introduced by the Rev. William Jones as a "very, very special guest," Bush, accompanied by his wife, Laura, received a standing ovation from the predominantly black congregation.

"We don't know how you feel about him personally, but he is the president of the United States," Jones said, to loud cheers.

Bush's appearance came at a time when his decisions on affirmative action and judicial nominations have brought criticism.

To coincide with the holiday, the White House announced Sunday the president will propose increasing spending by 5 percent for grants to historically black colleges, universities, graduate programs and Hispanic education institutions.

Last week, the administration asked the Supreme Court to declare the University of Michigan's affirmative action admissions policies unconstitutional. It argued in a brief that policies at the university and its law school fail the constitutional test of equal protection under the law, and ignore race-neutral alternatives that could boost minority presence on campuses.

Bush was not required to take a position in the case, but by doing so, he infuriated some black leaders. The decision prompted Jesse Jackson to call Bush "the most anti-civil rights president in 50 years."

Secretary of State Colin Powell, one of two black Cabinet members, said Sunday he disagreed with the president's stance on the Michigan admission policies. Education Secretary Rod Paige, who also is black, said he agreed with Bush .

The new program money announced by the White House would affect three programs:

--The Historically Black Colleges and Universities program makes grants to 99 eligible institutions to help strengthen infrastructure and achieve greater financial stability.

--The Historically Black Graduate Institutions program makes five-year grants to 18 institutions to expand capacity for providing graduate-level education.

The Hispanic-Serving Institutions program makes grants of up to five years to eligible institutions -- those with a full-time population of at least 25 percent Hispanic students, at least 50 percent of whom are low income.

Bush drew 9 percent of the black vote in 2000.

He surprised many observers this month by renominating Charles Pickering of Mississippi, whose nomination to a Court of Appeals seat last year was blocked by Senate Democrats after civil rights groups questioned his race-relations record.