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Bush Defends Iraq Plan, Outlines Domestic Agenda January 24, 2007

Posted by notapundit in Politics, US News, White House.
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WASHINGTON (Dow Jones)–His Iraq policy under siege on Capitol Hill, President George W. Bush sought to unite lawmakers behind a package of proposals designed to ease the U.S.’s dependence on oil and tackle rising health care costs.

In his first State of the Union address to a Congress controlled by Democrats, Bush said the U.S. “must not fail in Iraq,” and, detailing the “grievous and far reaching” consequences of losing the war, asked lawmakers to give his new battle plan a chance. On the domestic front, he outlined a slate of domestic initiatives that could help shape his last two years in office.

“We are not the first to come here with government divided and uncertainty in the air,” Bush said, according to a prepared text of his remarks. “Like many before us, we can work through our differences, and achieve big things for the American people.”

Picking up on last year’s declaration that the U.S. is addicted to oil, Bush unveiled plans to dramatically cut U.S. consumption of gasoline by 20% in the next decade – an effort that depends on ramping up alternative fuels like ethanol and reforming fuel efficiency standards for passenger cars.

Another initiative – a proposal to double the size of the nation’s emergency oil stockpile by 2027 – helped send crude oil futures higher Tuesday, when the idea first emerged.

“For too long our nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes, and to terrorists – who could cause huge disruptions of oil shipments… raise the price of oil… and do great harm to our economy,” Bush said.

To reach his ambitious targeted reduction in gasoline use, Bush said the current renewable fuel standard should be changed to require 35 billion gallons of renewable and alternative fuels in 2017, nearly five times the current target for 2012. The White House says that would displace 15% of projected yearly gasoline usage.

Achieving the goal, however, depends on the realization of technological breakthroughs, rather than a reliance on current corn-based ethanol technologies. And environmentalists complained that the renewable energy standard will be expanded to include methanol, butanol and maybe even coal-derived motor fuels.

“America is on the verge of technological breakthroughs that will enable us to live our lives less dependent on oil,” Bush said.

Under the second prong of his “20-in-10” gasoline-reduction proposal, Bush asked Congress for the authority to reform Corporate Average Fuel Economy, or CAFE, standards for cars and extend a current rule for light trucks and SUVs.

Moving to a so-called attribute-based system is projected to reduce annual gasoline use by up to 8.5 billion gallons, or 5%, by 2017, according to the White House. It based its proposal on an assumption that average fuel efficiency will increase 4% per year.

Under pressure from environmental groups and lawmakers to address climate change, the White House says Bush’s State of the Union energy proposals will stop the projected growth of carbon dioxide emissions from cars, light trucks and SUVs within 10 years. Bush, as expected, didn’t meet green groups’ calls for a cap-and-trade system for greenhouse gas emissions, prompting a lukewarm reaction from environmentalists.

“To address global warming, the president needed to go much further,” said David Friedman, research director at the Union of Concerned Scientists. “We must set an overall cap on global warming pollution for the entire economy.”

Gene Karpinski, president of the League of Conservation Voters, said Bush’s rhetoric on global warming has improved, but equated his plan to “fighting a forest fire with a garden hose.”

Another key State of the Union energy proposal called for the U.S. to double the capacity of its 727-million-barrel Strategic Petroleum Reserve over the next two decades. The administration already has the authority to boost the reserve’s size to 1 billion barrels, but Bush asked lawmakers for the authority to add another 500 million barrels of capacity.

Bush said that will help ease the adverse effects of future supply disruptions.

“As we continue to diversify our fuel supply, we must also step up domestic oil production in environmentally sensitive ways,” Bush said. “And to further protect America against severe disruptions to our oil supply, I ask Congress to double the current capacity of the Strategic Petroleum Reserve.”

The Energy Department will begin purchasing crude oil this spring at a rate of about 100,000 barrels a day. The prospect of those purchases pushed crude oil futures more than $2 a barrel higher, with prices topping $55 on Tuesday.

Currently, 691 million barrels are in the reserve, an amount that represents 55 days of net oil imports. The White House says doubling the SPR will provide another 97 days of net oil import protection.

On health care, another area Bush hopes to find common ground with Democratic lawmakers, the president detailed his plans to reform the tax code to make private health insurance more affordable. His plan would establish a standard deduction for health insurance – $15,000 for families and $7,500 for individuals – and redirect federal funds to help states make insurance more affordable.

“With this reform, more than 100 million men, women, and children who are covered by employer-provided insurance will benefit from lower tax bills,” Bush said. “At the same time, this reform will level the playing field for those who do not get health insurance through their job.”

Democrats, however, already have criticized the health care initiatives as a tax on the middle class that ultimately will undermine employer-provided health care.

Bush’s speech included broad calls for fiscal discipline and earmark reform and a reiteration of his pledge to balance the federal budget by 2012. The president said he’ll have more to say on fiscal matters next week, when he delivers a “state of the economy” address.

“This economy is on the move – and our job is to keep it that way, not with more government but with more enterprise,” Bush said.

He broke no new ground on entitlement reform, however, an area where bipartisan cooperation has so far been elusive. “Let us work together and do it now,” Bush said. “With enough good sense and good will, you and I can fix Medicare and Medicaid – and save Social Security.” He didn’t repeat last year’s call for a bipartisan commission on entitlements.

On immigration, Bush reiterated his call for comprehensive reform, saying that the effort to ease pressure on the U.S.-Mexico border needs to include a temporary worker program. Ironically, the president’s objectives on immigration have a better chance of success now that Democrats control Congress.

“We should establish a legal and orderly path for foreign workers to enter our country to work on a temporary basis,” Bush said. “We need to resolve the status of the illegal immigrants who are already in our country – without animosity and without amnesty.”

Tuesday’s speech was Bush’s first State of the Union to a Congress controlled by Democrats, and it comes at a time of deep public skepticism over his performance. Just 28% of those polled by the Wall Street Journal and NBC News approve of Bush’s handling of the Iraq war, two weeks after he laid out his new strategy on Iraq.

Bush didn’t specifically address pending congressional resolutions opposing his plan to send more than 20,000 additional troops to Iraq, but he asked lawmakers to have patience with the strategy.

“I respect you and the arguments you have made,” Bush said. “We went into this largely united – in our assumptions, and in our convictions. And whatever you voted for, you did not vote for failure. Our country is pursuing a new strategy in Iraq – and I ask you to give it a chance to work. And I ask you to support our troops in the field – and those on their way.”

He didn’t yield, however, in his commitment to the war, saying failure in Iraq would trigger a “nightmare scenario.” He said his strategy gives the U.S. the “best chance of success.”

“We are carrying out a new strategy in Iraq – a plan that demands more from Iraq’s elected government, and gives our forces in Iraq the reinforcements they need to complete their mission,” Bush said. “Our goal is a democratic Iraq that upholds the rule of law, respects the rights of its people, provides them security, and is an ally in the war on terror. In order to make progress toward this goal, the Iraqi government must stop the sectarian violence in its capital.”

By Henry J. Pulizzi, Dow Jones Newswires

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