State of the Union Puts Bush on Collision Course With Himself

On the nation’s biggest domestic problems, President Bush faces a clear choice as he approaches Tuesday’s State of the Union address. He can make a political point. Or he can make progress against the problems. It’s probably not possible to do both -- unless Bush wants to radically reconfigure his political strategy.

Here’s the tension. Since 2000, Bush’s electoral game plan has relied mostly on inspiring a big turnout from his Republican base. With a few exceptions (education, immigration), this has encouraged him to advance policy proposals that excite his half of the electorate -- while often infuriating the other half.

At times, the White House seems to welcome Democratic opposition. The greater the disagreement between the parties, the sharper the contrast Bush and GOP candidates can use to energize their core supporters at election time.

But on crucial issues such as the federal budget deficit, access to healthcare and America’s dependence on foreign oil -- all concerns Bush is likely to emphasize Tuesday -- the nation is unlikely to make significant progress unless the parties narrow their differences. The evidence suggests that the best way to confront these problems is to blend ideas each side favors. The political imperative of greater contrast collides with the substantive imperative of more cooperation.

Consider healthcare. About 46 million Americans lack health insurance. All indications are that Bush wants to expand coverage by offering Americans sweetened tax incentives to open health savings accounts. With these tax-free accounts, people pay much more of their initial medical costs out of pocket (at least $2,100 for a family). Then they buy an insurance plan for catastrophic expenses.

These accounts can be a good deal for healthy people, and they might attract younger workers who now choose to remain uninsured. With proper safeguards to prevent a migration that leaves only the oldest and sickest in traditional insurance programs, Bush’s health savings accounts could help expand access.

But these accounts alone are unlikely to significantly shrink the number of uninsured. Two-thirds of the uninsured come from families with incomes at twice the poverty line, or about $38,614 for a family of four, or less.

Even with tax benefits, health savings accounts “really don’t lend themselves to the vast majority of the uninsured, because they don’t have the money to pay” the required out-of-pocket expenses, says Bruce Bodaken, chairman and chief executive of Blue Shield of California.

Since most Democrats resist these accounts as a threat to traditional insurance, a Bush plan built on them alone would guarantee plenty of campaign contrast. But a compromise that joined these accounts with expansions of government programs, and perhaps new requirements on employers, could meaningfully expand access to care.

On energy, the same pattern holds. Bush aims to reduce American dependence on foreign oil mostly by increasing domestic energy production. That’s surely part of the solution. But it’s too small a lever to liberate America from Middle East oil.

America imports about 12 million barrels of oil a day, roughly 60% of our consumption. The federal Energy Information Administration estimates that opening the Arctic National Wildlife Refuge to oil production, as Bush wants, would produce 900,000 barrels a day by 2025. By contrast, the EIA projects that raising federal fuel economy standards 10 miles per gallon for cars would save about 1.5 million barrels a day by then.

An energy plan tilted toward production would guarantee partisan firefights in Congress and the 2006 campaign. A production-conservation package might actually reduce our vulnerability to oil blackmail from hostile nations such as Iran.

Then there’s the deficit. Bush is likely to call this week for more spending reductions. But the annual deficit is projected to remain stuck indefinitely at about $300 billion or more if Bush’s tax cuts are extended, as he’s seeking.

That’s a big hole to fill with spending reductions alone. Peter R. Orszag, a tax and budget expert at the Brookings Institution think tank, says that if Congress wants to eliminate that deficit without touching entitlement programs or defense, it will need to cut all other federal programs -- from domestic security to environmental protection -- by two-thirds. “Or we could cut all existing Social Security benefits by two-thirds,” he says. “If you don’t like that, you could reduce Medicare payments by 93%.”

Congress obviously isn’t going to take any of those steps, or anything approaching a combination of them.

A deficit reduction plan that relies only on spending cuts will undoubtedly establish a bright line between the parties. But Bush has little chance of taming the deficit unless he couples spending reductions with a rollback of his tax cuts (which the Congressional Budget Office last week estimated would add $2.3 trillion to the national debt over the next decade).

By dismissing half of the potential solution on each of these problems, Orszag says pointedly, Bush “is like a man trying to use a scissor that has only one side.”

A more balanced approach to healthcare, energy or the deficit might anger many of Bush’s core supporters and threaten his high-turnout political strategy. But it could also help the GOP by improving his anemic standing among independent and moderate voters in recent polls.

It would also call the bluff of Democrats who denounce Bush as divisive but increasingly pick fights to excite their own base. (See the entry under Samuel A. Alito Jr., filibuster of.)

Most important, an agenda that tackles our challenges from all directions might reduce the nation’s divisions and send Bush toward the history books with the arrows pointing up on some of the most entrenched problems of his time.

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Ronald Brownstein’s column appears every Sunday. See current and past Brownstein columns on The Times’ website at latimes.com/brownstein.