Bush Sets Sights Lower This Time

Times Staff Writer

One year ago, fresh from his 2004 reelection, President Bush challenged Congress with an ambitious domestic agenda of sweeping changes in Social Security, the federal income tax and immigration law.

None of those changes came to be. The president's top priority -- remaking the Social Security system -- sputtered and stalled. Tax reform fell by the wayside. Guest-worker proposals drew fire from conservatives.

Bush, meanwhile, struggled against public doubts about the war in Iraq, a disastrous hurricane in New Orleans, rising gasoline prices and his sinking standing in the polls.

This week, Bush hopes to get a second chance to launch his second term with a State of the Union address that, White House aides say, will offer proposals on healthcare, education and energy -- but nothing as ambitious as overhauling Social Security.

Tuesday's speech will include a renewed defense of Bush's conduct of the war in Iraq and his decision to order electronic surveillance of communications between people in the United States and other countries without seeking court warrants.

But the president, mindful that Republican members of Congress are heading into a difficult campaign season, hopes to deliver a message that the administration also is working on healthcare, education and jobs -- issues voters consistently rank as their main concerns.

"We've been having an ongoing conversation with the public" about national security issues, said White House communications director Nicolle Wallace. "There's this whole other basket of issues that people care about, like my mom at her kitchen table: gas prices, healthcare premiums, education and jobs.... This is an opportunity to pull those things up to the same level as [national security] issues."

Kenneth M. Duberstein, a former chief of staff to President Reagan, termed Bush's speech "his opportunity, having had a run of bad months, to at least start a recalibration. You're going to hear a lot about the economy and security. That would make the most sense because that's what America wants to hear."

Presidents normally try to keep the contents of the State of the Union address a secret, in hopes of heightening suspense and attracting a larger audience. But White House officials, Republicans who have been briefed and Bush have disclosed many of the themes in this year's speech. They include:

Education

Aides say Bush will renew his argument that the economy is in good shape, despite public concern that growth has slowed. He also is expected to propose increased federal funding for scientific research and education in mathematics, science and engineering.

"Our kids ... test lousy [in] math and science in high school, and that's a problem," Bush said this month at a town meeting in Louisville, Ky. "In my State of the Union, I'm going to address this."

Sen. Kay Bailey Hutchinson of Texas, one of several Republican lawmakers who met with Bush on Friday, said the president was "particularly enthusiastic" about this part of his speech.

Healthcare

Aides said Bush would propose measures to expand the use of health savings accounts, tax-free individual accounts that can be used for medical expenses. The president may also propose making most medical spending by individuals tax deductible, they said. (Under current tax law, taxpayers can deduct medical expenses only when they exceed 7.5% of income.)

Both proposals are controversial and potentially expensive, but they fit into Bush's overall drive to give individuals more "ownership" of their healthcare and to reduce the role of government, employers and insurance companies.

"The role of government is to encourage a direct relationship between the consumer -- the patient -- and the provider -- the doctor -- without a lot of go-between," Bush said at a recent appearance in Springfield, Va.

Energy

Aides said Bush would call for renewed efforts to wean the United States from its dependence on imported oil, including greater reliance on nuclear energy and more research into making automobile fuel from agricultural waste.

"I'm convinced with more research we'll be able to develop additional ways to make ethanol," Bush told CBS News on Friday. "I'm convinced we could do that with a good push, a technological push."

The administration also has been working on a proposal to reprocess spent nuclear fuel to make it reusable in power plants without increasing the risk of nuclear weapons proliferation.

National security

This issue has been a source of political strength for Bush since the Sept. 11 terrorist attacks. Aides said the president would renew his argument that the war on Iraq was a key battleground in the larger struggle against terrorism. And he'll repeat his argument that his decision to authorize surveillance of international communications from people in the United States -- without asking for a court warrant -- was justified.

"We'll continue our terrorist surveillance program against Al Qaeda," Bush said at a news conference Thursday, using a newly adopted name for the practice.

Bush also will repeat his warning that Iran cannot be allowed to develop nuclear weapons, aides said, but the issue is unlikely to be a major focus.

On other issues, aides said, the president will touch on the controversial -- and, for Republicans, potentially painful -- issue of lobbying reform.

The issue has been spotlighted by the recent guilty pleas to corruption charges by lobbyist Jack Abramoff, who had close links to Republican congressional leaders. But Bush is likely to tread gently in this area, confining himself to a call on members of both parties to work together to improve ethics in government.

The speech will touch on old issues too -- the major parts of Bush's agenda that remain unfinished as he begins his sixth year in the White House.

The president will reaffirm his goals of remaking Social Security, revamping the federal income tax and reforming immigration law, but those priorities will get much less emphasis than they did a year ago, aides said.

They said Bush would renew his call on Congress to make his tax cuts permanent; the cuts Congress passed in 2001 and 2003 are scheduled to expire at the end of 2010.

And the president will press Congress to hold spending down on domestic programs, just as he has every year, with uneven results.

Sen. Charles E. Grassley (R-Iowa), asked what he hoped to hear in the speech, said, "I would like to have him get back on Social Security, but he's not going to. I think we've seen the end of that, at least through the election."

Sen. Lamar Alexander (R-Tenn.), who has led congressional efforts to increase federal funding for math and science education, said he hoped Bush's proposal in that area would be substantial, despite pressures to reduce domestic spending.

"I know this: He's got a $2.6-trillion budget," Alexander said. "If all we do is spend more money on Medicaid, war, welfare, debt, hurricanes and flu, we're not going to have an economy that's strong enough to pay for all those urgent needs. And I believe he understands that."

Alexander has sponsored a bill that would increase federal spending on scientific research and education by about $10 billion a year for seven years.

Wallace and other White House aides refused to say how much new spending Bush planned to propose for his science and technology initiative, but promised it would be significant.

"We have always been pretty robust about our funding priorities," Wallace said.

David Winston, a pollster who advises GOP leaders in Congress, said what they wanted most was for Bush to create "a positive environment" for Republican congressional candidates, especially on two major issues -- the war in Iraq and the economy.

Last fall, Winston said, "We had high gas prices, we had [Hurricane] Katrina, people were unsettled about the economy. That was a difficult environment."

Since then, he noted, Bush's standing in public opinion polls has improved, although modestly. Public approval of the president's job performance fell below 40% in some polls last fall, but stood at 43% in a Los Angeles Times/Bloomberg poll released last week.

"The question is, can he sustain that trend, get over 50%, or is this a plateau? This speech is critical to that."

Stephen Hess, a professor at George Washington University who, as a White House aide, helped write three State of the Union addresses for President Eisenhower, agreed that Bush had a lot riding on the speech.

"At this point, that's pretty important to him ... to make his second term a success," Hess said. "He needs 48% [approval], rather than 43%, and if he gets there, that's not bad. After all, that's where he got elected."

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Times staff writer Richard Simon contributed to this report.

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