Bush offers big ideas, but will Congress concur?

A balanced federal budget within five years. A major change in the way the tax code treats health insurance. A 20 percent reduction in the amount of gasoline consumed by the United States.

President Bush has only two years left in office, and his approval ratings are at a low ebb, but even given these constraints, he does not appear to be thinking small. His State of the Union address Tuesday night featured some of the most ambitious domestic policy proposals he has yet offered during his presidency.

But two words Mr. Bush uttered at the speech's beginning – "Madam Speaker" – hint at the problems the administration may have in pursuing the State of the Union's big ideas. With Congress in the hands of new Democratic leadership, including the first woman to lead the House, Speaker Nancy Pelosi, the White House is no longer driving the nation's domestic agenda.

And Iraq – which came second to domestic items in the speech – remains perhaps Bush's, and the nation's, foremost problem. The struggle to calm sectarian violence in Baghdad and Anbar Province will preoccupy many in the White House, Pentagon, and Congress for weeks and months to come.

Still, there is time and space to work on Bush's proposals, if lawmakers will meet him halfway, insist administration officials.

"As president, he has the ability to articulate issues, and he's got a responsibility for dealing with them ... and the president doesn't lay it out as a challenge or a confrontation but in fact as an opportunity to work together," said White House spokesman Tony Snow at a Tuesday briefing for reporters on the State of the Union's details.

The State of the Union address is always a dramatic event on Washington's political calendar – a night when US chief executives have commanded the eyes of the nation, and insisted even to critics that whatever their difficulties, they still count.

They alone stand at the podium in the well of the House. They alone get to define the nation's state in a word or phrase. (Usually "good", or "strong", but not always.) At the end, they introduce the now almost-obligatory corps of notable Americans sitting in the gallery, and describe their accomplishments and share in their applause. (For Bush, these people included Julie Aigner-Clark, recognized for building her children's video business into a $200 million company, and Wesley Autrey, who three weeks ago at a Harlem subway station jumped in front of a train and saved a young man who had fallen onto the tracks.)

In this State of the Union, domestic issues took up the first part of the speech. Among other things, he said he would soon submit a budget plan that would run in the black after five years. He called on Congress to cut the number of legislative earmarks – special-interest items slipped into bills at the last minute – by half in this session.

But his two biggest domestic items were his healthcare and energy initiatives.

On healthcare, Bush called for legislation that would establish tax deductions for health-insurance payments worth $15,000 for families and $7,500 for individuals. Employer-financed benefits greater than that would become taxable income under this plan.

About 80 percent of workers with health insurance through their jobs would get a tax reduction, according to the White House, while 20 percent would see their taxes go up. Those currently uninsured might find healthcare within their reach.

"Changing the tax code is a vital and necessary step to making healthcare affordable for more Americans," said Bush.

But critics, such as Rep. Pete Stark (D) of California, chairman of the House Ways and Means subcommittee on Health, say that the poor pay little in taxes in any case, and thus a tax deduction is worth less to them than to wealthier Americans.

Representative Stark says he won't even consider holding hearings on the subject.

Administration officials insist that critics' attitudes toward the proposal may change.

"This is a bold, new proposal. It's going to take some time for people to absorb it and to understand it," said Joel Kaplan, deputy chief of staff for policy, at a briefing for reporters.

On energy, Bush called for a 20 percent reduction in gasoline usage by 2017.

"When we do that, we will have cut our total imports by the equivalent of three-quarters of all the oil we now import from the Middle East," said Bush.

This gas cut would be achieved mainly through a huge increase in the amount of ethanol and other alternative fuels blended into the fuel supply, under government mandate. The administration also proposed raising the fuel-economy standards for passenger cars.

An energy change of this magnitude would be huge. Producing the necessary ethanol could require the conversion of at least 30 million acres – possibly the biggest change in American land use since the Civil War, according to Steve McCormick, president of the Nature Conservancy.

"That will have serious implications for both water and soil quality and wildlife habitat," said Mr. McCormick in a statement. "It could also significantly raise the cost of gasoline impacting local economies."

In Bush's speech, Iraq and other foreign-policy issues followed domestic policy. But with the US on the verge of an increase of troops there – and with an Army sergeant who was recently awarded the Silver Star the last notable attendee mentioned by Bush – Iraq remained a subject foremost in the minds of many in the House chamber Tuesday night.

Bush asked for skeptical lawmakers to support his plan for a troop buildup, saying it represented the best hope for victory.

"Every one of us wishes that this war were over and won. But it would not be like us to leave our promises unkept, our friends abandoned, and our own security at risk," said Bush.

He reiterated his often-stated belief that the war in Iraq is a "generational struggle," and that to pull out now would be to invite a regional conflict, and the establishment of havens for Islamist terrorists.

"Nothing is more important at this moment in our history than for Americans to succeed in the Middle East," the president said.

Democrats remained largely unconvinced, even scornful, of his assertions about the war.

"The president took us into this war recklessly.... We are now, as a nation, held hostage to the predictable – and predicted – disarray that has followed," said freshman Sen. James Webb (D) of Virginia in the official Democratic response.

(For the transcript of Bush's State of the Union Speech, go here. For the Democratic rebuttal, go here.)