President Bush has called for a three percent increase in spending for America's space agency, NASA. The increase includes $3 billion to develop the Orion space vehicle that NASA considers a key to U.S. ambitions to return to the Moon. The budget request comes as NASA faces renewed questions about its future.

Steve Mort reports from Cape Canaveral, in the southern state of Florida.

A fire in the cockpit killed three astronauts 40 years ago

A memorial service marking the 40th anniversary of the 1967 Apollo 1 accident. A fire in the cockpit during a routine test killed all three astronauts onboard.

NASA's Space Operations chief, William Gerstenmaier, says the agency continues to learn from its mistakes. "We need to keep looking for failures before they occur. As we take our first steps back to the Moon we should remember the legacy of Apollo 1 – exploration is worth taking risks, but not undue risks. And so we must be diligent in our work and in our imagination and in our oversight".

But as NASA looks back at the Apollo 1 accident, it also is looking ahead to an uncertain future.

William Gerstenmaier, NASA Space Operations Chief

The space agency is still trying to recover from a three year delay in shuttle flights following the 2003 Columbia disaster.

The orbiter disintegrated as it returned to Earth -- the first accident since the 1986 Challenger explosion.

Astronaut Carl Walz blames the tragedy on an attitude problem at NASA. "I think maybe we just became complacent in thinking that we were so successful post-Challenger, that we had everything licked. And I think that what we found out was that this is still a very dangerous business".

A dangerous and costly business.

The White House has requested a record $17.3 billion for NASA in 2008, while some members of the U.S. Congress  want to cut spending. The legislature has trimmed nearly $700 million from NASA's 2007 manned space program.

Experts also worry that the agency could suffer from a shortage of first rate talent.

William Potter from the Astronauts Memorial Foundation says too few Americans are interested in science. "Many standardized tests indicate that U.S. students are lagging behind in their science and math skills. Many universities are finding that foreign students have a much greater enthusiasm for math, science and engineering than do U.S. students".

But NASA officials believe the problem is not just a waning appetite for science. They say the agency has lacked direction for three decades, and NASA Administrator Michael Griffin has even described the shuttle program as a "mistake".

The shuttle fleet will be retired in 2010, and four years later NASA plans to launch a new type of spacecraft called Orion.

NASA wants to resume manned flights to the Moon by 2020 with the eventual goal of reaching Mars. The agency hopes setting a goal, like President Kennedy's target of a lunar landing by the end of the 1960s, will re-energize the U.S. space program.

And that excites former astronauts like Duane Graveline. "I'm sure we're going to do our research on Mars. We're going to continue... we're a creature that always studies, that is always looking ahead in our studying."

The goal of putting a man on Mars is the most ambitious target ever set for NASA. A study from the University of Wisconsin found the Apollo program cost the U.S. taxpayer more than $60 billion in today's money. A voyage to Mars will cost a lot more. It is not at all clear how much -- and it is not at all clear there is a political will to pay the bill.