The speech's key points and their context

USA TODAY
The speech's key points and their context

What the president said on the critical issues of the coming year.

Balanced budget

What President Bush said: "In the coming weeks, I will submit a budget that eliminates the federal deficit within the next five years. I ask you to make the same commitment. Together, we can restrain the spending appetite of the federal government and balance the federal budget."

Context: Bush inherited a $128 billion budget surplus. Within three years, a recession and the war on terrorism turned it into a $412 billion deficit.

Rising tax receipts fueled by record corporate profits have since driven the deficit down to $248 billion.

Getting back to balance won't be easy if the president is realistic about the future costs of the wars in Iraq and Afghanistan and the impact of extending his tax cuts, which he vows to do. Bush will be long gone before any balanced budget is enacted. Even if balance is achieved, the long-term growth of Medicare, Medicaid and Social Security threaten much larger deficits in the future.

Economy

What Bush said: "A future of hope and opportunity begins with a growing economy — and that is what we have. Unemployment is low, inflation is low and wages are rising."

Context: The economy, while slowing, continues to be a bright spot for the president. Americans' earnings are keeping ahead of inflation, interest rates have stabilized, the jobless rate remains low at 4.5%, and more jobs have been created for 40 consecutive months. Gasoline prices are down from their summer peak; health care inflation, while high, is the lowest since 1999. Tax collections are running 8.2% higher than a year ago.

Whether this is tied to Bush's tax cuts in 2001 and 2003 remains in dispute. Bush says he can balance the budget by 2012 while making all his tax cuts permanent. Democratic Sen. Jim Webb of Virginia focused his response on the uneven nature of the recovery, which is "almost as if we are living in two different countries." He and other Democrats want to redirect spending on tax cuts and the Iraq war to items such as health care, education and alternative energy. Expect a clash of priorities over the 2008 budget that Bush will unveil Feb. 5.

Education

What Bush said: "Five years ago we rose above partisan differences to pass the No Child Left Behind Act. … And because we acted, students are performing better." Bush wants the act reauthorized.

Context: No Child Left Behind, Bush's ambitious 2002 education overhaul law, remains one of his few bipartisan successes. It expires this year, and Congress must reauthorize it. That effort could meet stiff resistance as lawmakers try to hold it off until after the 2008 election.

Members on both sides of the aisle have good reasons to wait: Many Democrats, such as Senate Majority Leader Harry Reid of Nevada, don't like the law's annual tests and punishments for failing schools. Reid said the law may need some "fine-tuning." Republican lawmakers in states such as Utah and Virginia have criticized the law for allowing too much government intervention.

Ethics and earmarks

What Bush said: "Let us work together to reform the budget process … expose every earmark to the light of day and to a vote in Congress … and cut the number and cost of earmarks at least in half by the end of this session."

Context: Congress has required more public disclosure of earmarks, as the special projects that lawmakers quietly insert in spending bills are known. Lawmakers have not called for reductions; many defend the practice because they know best what their states and districts need.

Bush wants to go further; he wants line-item veto power to eliminate earmarks, an idea Democratic leaders reject.

The use of earmarks has mushroomed in recent years — with $67 billion in taxpayer money going to these special projects in fiscal year 2006 alone, according to the Congressional Research Service.

Global disease

What Bush said: "We hear the call to take on the challenges of hunger, poverty and disease — and that is precisely what America is doing."

Context: In 2003, Bush announced a five-year, $15 billion initiative to combat AIDS, the largest international health campaign to target a single disease. The program targets 15 countries that are home to about half the world's 39 million people who are HIV-positive. Bush has also called for Congress to reauthorize the $2.1 billion Ryan White Care Act, the largest federal program for people with HIV/AIDS.

The White House says that before the program, 50,000 people were receiving drug treatment for AIDS, while today, more than 800,000 people are receiving medications. Democrats have acknowledged the treatment success of the 2003 Bush plan, but Rep. Barbara Lee, D-Calif., has proposed a bill to remove requirements that promote abstinence-until-marriage programs.

Bush announced a $1.2 billion, five-year plan in 2005 to control malaria in Africa. The goal of the initiative is to cut malaria deaths by half in 15 target countries.

Homeland security

What Bush said: "The evil that inspired and rejoiced in 9/11 is still at work in the world. And so long as that is the case, America is still a nation at war."

Context: Port security became a major issue last year, and Congress is pushing it again in 2007. House Democrats this month passed a sweeping bill that would require inspections of all cargo on passenger airplanes and screening of cargo containers before they're loaded on ships headed to U.S. ports. The White House and some senators in both parties have questioned how the government will pay for the inspections. They also expressed concern the screening could hamper trade for limited security benefits. The Senate has not yet passed a version of the bill.

Immigration

What Bush said: "Extending hope and opportunity in our country requires an immigration system worthy of America, with laws that are fair and borders that are secure. … Let us have a serious, civil and conclusive debate — so that you can pass, and I can sign, comprehensive immigration reform into law."

Context: Immigration is one issue where Democrats and Bush are likely to reach a deal. Bush has been pressing since taking office for a major overhaul of immigration laws that would include giving legal status to an estimated 12 million people now living in the country illegally.

Last year, the Senate approved a bipartisan bill that met the president's requirements, but House Republicans blocked it. Now Democrats are in charge and are making it a priority.

Bipartisan negotiations already are underway to begin writing a bill that would beef up border security, create a secure ID system to help employers determine who can legally work for them and strengthen penalties on those who hire illegal employees. Still to be determined: how many of those now here illegally will be given a chance at citizenship, and how many conditions they will have to meet.

House Democrats have said they will reconsider legislation passed last year to build 700 miles of fence along the Mexican border. Government auditors have said the project could cost $30 billion.

Iran

What Bush said: "The United Nations has imposed sanctions on Iran and made it clear that the world will not allow … Tehran to acquire nuclear weapons."

Context: The Bush administration has intensified pressure on Iran to stop trying to make nuclear fuel and to stop backing Iraqis who target U.S. troops. European nations, such as France and Germany, urged the United States to talk to Iran; in May, Secretary of State Condoleezza Rice said the United States would take part in multinational talks if Iran suspended uranium enrichment. Iran continued the program.

The U.N. Security Council passed a resolution in December forbidding trade that could help Iran's nuclear or missile programs.

The Bush administration rejected the Iraq Study Group's call for U.S.-Iranian talks. Instead, the administration increased pressure to ban foreign investment in Iran's oil industry and to stop Iranian banks from using U.S. dollars. Bush also sent a second aircraft carrier group to the Persian Gulf.

Iraq

What Bush said: "Our military commanders and I have carefully weighed the options. We discussed every possible approach. In the end, I chose this course of action because it provides the best chance of success. Many in this chamber understand that America must not fail in Iraq — because you understand that the consequences of failure would be grievous and far reaching."

Context: Attacks on U.S. troops and sectarian violence continue throughout Iraq. The Pentagon's most recent report to Congress in November noted a 22% increase in attacks. Sixty-eight percent of them are directed at U.S.-led coalition troops.

That has prompted Bush to forge a new strategy. The president's "new way forward" includes sending 21,500 additional U.S. troops and $1 billion in aid. The plan also would bolster the number of U.S. advisers in Iraqi security units.

Bush's plan has met opposition in Congress and among the public. Senators from both parties have proposed resolutions expressing disagreement with Bush.

More than 60% of Americans surveyed by USA TODAY said they support a non-binding congressional resolution that opposes sending more troops.



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