Second term near, Bush takes stock

Suicide bombers in Iraq are indeed having an effect on the country. Some Iraqi government forces haven't fought well - but some have, and Iraqi elections are still on track for the end of January.

Any legislation on Social Security reform will be written in Congress, not the White House. But the Bush administration is doing its best to educate lawmakers that a Social Security funding crisis is already upon us - and that the current system needs to be redesigned to reflect modern America.

As President Bush looks toward his second term, he seems to be both acknowledging that not all his policies are proceeding exactly to plan while at the same time forcefully insisting that he will forge ahead with a second-term agenda of a few big ideas.

Thus at his year-end press conference Monday, he appeared to bend a little bit to recognize the existence of problems, such as the chaos in Iraq, and the rising criticism of Secretary of Defense Donald Rumsfeld. Yet he gave little ground to critics who blame his administration for missteps.

He strongly defended Secretary Rumsfeld, for instance, saying that the Pentagon chief's use of an auto-pen to sign condolence letters for the families of US troop casualties did not reflect the person he knew.

"Sometimes perhaps his demeanor is rough and gruff, but beneath that ... is a good human being who cares deeply about the military and deeply about the grief that war causes," Mr. Bush told reporters at his news conference.

With Washington news cycling around perceived Rumsfeld missteps, and the continued repercussions of the withdrawal of Bernard Kerik, former New York police chief, from his nomination to be secretary of Homeland Security, Bush's press conference provided the administration an opportunity to shift the focus off stories the White House deemed negative.

Thus Bush began by laying out a domestic agenda for his second term that contained new items, but also highlighted the big points he wants to cover: more accessible healthcare, reform in schools, tort reform, a budget that cuts the deficit in half in five years, and reform of Social Security via creation of private retirement accounts within the existing system.

Bush also appeared intent on rebutting critics who say the scheduled Jan. 30 election in Iraq is unlikely to come off.

The president could hardly say the situation is peaceful, considering the weekend's spate of bombing attacks and civilian casualties. He admitted the "effect" of suicide bombers.

"I don't expect the process to be trouble-free," said Bush.

And he tried to lower expectations for Jan. 30, by saying that violence was unlikely to end any time soon.

But he also tried to place Iraq's steps toward democracy in the context of those in Afghanistan, where elections have been at least a start toward national political reconstruction. "The [Iraqi] elections in January are just the beginning of a process," said Bush.

On Social Security, Bush avoided being pinned down on details of his private-account idea. That would not be appropriate, he said, considering that as the head of the executive branch he could only propose changes, while Congress is the body that draws up details.

Laying out details this early would amount to "negotiating with myself," said the president.

At the same time, he again ruled out a tax increase to fund any change - though he declined to say whether lifting the cap on income subject to Social Security taxes would constitute such a hike. And he reiterated his belief that private accounts within the system would encourage an "ownership society," while raising national savings (a point some experts dispute) and creating an asset that retirees can pass along to subsequent generations, if they choose.

The current Social Security system was designed in "another era," said Bush.

"The question is whether [the nation] has the will to shift from a defined-benefit retirement plan to a defined-contribution retirement plan," said Bush.

On other points, the president said that he retains confidence in his administration's vetting process, despite the Kerik withdrawal, and that he will continue to work with Russian leader Vladimir Putin during his next term.

• Liz Marlantes contributed to this report.