Social Security, Iraq Top State of the Union

The economy is growing, the workforce is thriving and the United States is actively working for good throughout the world, President Bush told America on Wednesday during his State of the Union (search) address.

"The state of our union is confident and strong," the president told Congress, diplomats, military officials, the Supreme Court and millions of Americans watching the speech on television.

Bush said newly elected leaders in Afghanistan, the Palestinian territories, Ukraine and Iraq now share the same "great privilege" as the officials in the room — being placed in office "by the votes of the people we serve."

To serve those people, the president said Congress must work with the administration to make the economy grow, provide reliable energy, reduce junk lawsuits, improve student achievements, train more workers and strengthen health care. The largest element of Bush's agenda, however, is reform to the ailing Social Security system.

The State of Social Security Is Not So Strong

Calling Social Security a "moral success of the 20th century," the president said that to honor its great purpose in the 21st century, the 70-year-old program must be updated to allow private retirement accounts.

“One of America’s most important institutions — a symbol of the trust between generations — is also in need of wise and effective reform. Social Security … on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security," Bush said.

“Fixing Social Security permanently will require an open, candid review of the options … I will work with members of Congress to find the most effective combination of reforms,” the president said.

Bush tried to reassure people at or near retirement that they won't have to worry about their benefits changing. That means anyone age 55 or older will not be enrolled in the private savings account program the president envisions and will not see their benefits change. The reassurance was apparently meant to take some of the steam out of the opposition by AARP, the nation's largest special interest group for retired people.

Facing shouts of disagreement from Democratic members, Bush sounded the alarm that the Social Security crisis won't be in 2042 or 2052 — when the trust fund runs out of money — but just 13 years from now, when the surplus disappears.

"I recognize that 2018 and 2042 may seem like a long way off. But those dates are not so distant, as any parent will tell you. If you have a 5-year-old, you’re already concerned about how you’ll pay for college tuition 13 years down the road. If you’ve got children in their 20s, as some of us do, the idea of Social Security collapsing before they retire does not seem like a small matter. And it should not be a small matter to the United States Congress," he said, offering to hear any serious proposal that is suggested.

Bush's advisers have settled on a proposal for structuring the personal accounts to resemble the Thrift Savings Plan (search), a tax-deferred retirement investment plan for federal workers similar to a 401(k) plan. The idea is to minimize risk for people at the outset by offering as few as three to five diversified investment funds.

"Here is why personal accounts are a better deal. Your money will grow, over time, at a greater rate than anything the current system can deliver — and your account will provide money for retirement over and above the check you will receive from Social Security. In addition, you’ll be able to pass along the money that accumulates in your personal account, if you wish, to your children or grandchildren. And best of all, the money in the account is yours, and the government can never take it away," Bush said.

But the testy, partisan debate over his plan to overhaul Social Security is only just heating up — on the Hill and off.

"There's a lot we can do to improve Americans' retirement security, but it's wrong to replace the guaranteed benefit that Americans have earned with a guaranteed benefit cut of 40 percent or more. Make no mistake, that's exactly what President Bush is proposing," said Senate Minority Leader Harry Reid (search), D-Nev., who delivered part of the Democratic response.

Democrats say Social Security is not in crisis and merely needs some tinkering. Reid said the president's reforms will cost an estimated $2 trillion.

"Democrats are all for giving Americans more of a say and more choices when it comes to their retirement savings. But that doesn't mean taking Social Security's guarantee and gambling with it. And that's coming from a senator who represents Las Vegas."

Domestic Priorities Appeal to Conservative Base

Appealing to conservative supporters who are credited with putting Bush in office for a second term, the president laid out his vision of a values-based society that is not undermined by the government. To that end, Bush said he would support a constitutional amendment that would ban gay marriage

"Because marriage is a sacred institution and the foundation of society, it should not be re-defined by activist judges," the president said.

In the audience was Dana Reeve (search), the widow of "Superman" star Christopher Reeve, who died last year following nine years as a quadriplegic. Invited by Democratic Rep. Jim Langevin, who is wheelchair-bound, Reeve hoped to bring a face to the debate over stem cell research. But Bush did not give Reeve much to applaud. Instead, he said he would work to ensure that human embryos are not cultivated for science, which would occur in essence if the federal government expanded human embryonic stem cell research.

"To build a culture of life, we must also ensure that scientific advances always serve human dignity, not take advantage of some lives for the benefit of others ... I will work with Congress to ensure that human embryos are not created for experimentation or grown for body parts, and that human life is never bought and sold as a commodity," he said.

Bush also said when he gets the recommendations from a bipartisan panel he appointed to examine the tax code, he will offer a system that "is pro-growth, easy to understand, and fair to all."

The U.S. economy finished 2004 with its best performance in five years despite slowing in the final stretch. Economic growth clocked a 4.4 percent increase for all of last year, spurred by brisk consumer and business spending, although the last quarter growth rate of 3.1 percent was the most sluggish since the first quarter of 2003.

Under pressure from conservatives, the president has pledged to rein in spending and slice the federal budget deficit in half in five years.

"Next week I will send you a budget that holds the growth of discretionary spending below inflation, makes tax relief permanent, and stays on track to cut the deficit in half by 2009. My budget substantially reduces or eliminates more than 150 government programs that are not getting results, or duplicate current efforts, or do not fulfill essential priorities. The principle here is clear: A taxpayer dollar must be spent wisely, or not at all," he said.

Other domestic initiatives Bush mentioned in his speech include getting Congress to give every judicial nominee an "up or down vote."

"Judges have a duty to faithfully interpret the law, not legislate from the bench," Bush said.

The president proposed launching a three-year initiative to help organizations keep young people out of gangs. Bush named first lady Laura Bush to lead the effort to reach at-risk youth.

Bush won strong applause when he defined his goals for improving health care — tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical errors and unnecessary costs, association health plans for small businesses and their employees, expanded health savings accounts, and medical liability reform that will reduce health care costs.

The president said he wanted Congress to pass his energy bill, place limits on medical malpractice suits and approve an immigrant guest worker program. He encouraged Congress to focus efforts on reducing HIV/AIDS through prevention programs, especially in the African-American community. He suggested Congress fund special training for defense counsel in capital cases in order to make sure lawyers make the most of the expanded use of DNA evidence. He said he also wanted to expand the No Child Left Behind (search) law to require high school students to take the math and reading tests now required of younger students.

Something for the Rest of the World, Too

Bush devoted the better half of his speech to domestic matters and spent a smaller time on international issues. Among the president's guests invited to sit in the first lady's box were two female voters, from Afghanistan and Iraq. Bush signaled up to them as he applauded efforts to advance democracy around the world.

Safia Taleb al-Suhail, leader of the Iraqi Women's Political Council and the Alliance for International Justice, stood and clapped, turning her fingers from a victory sign to a No. 1 sign, where she tried to show remnants of the purple ink that signaled that she had voted on Sunday.

Earlier in the day, the House passed a resolution congratulating Iraqis for their successful election. Freshman class president Rep. Bobby Jindal (search), R-La., sent a message to colleagues on both sides of the aisle encouraging them to dip their fingers in blue ink to offer a visual and dramatic show of solidarity with the Iraqis who defied insurgents last weekend to vote for a National Assembly. Some members could be seen showing their marked index fingers.

Among other guests in the first lady's box were military members as well as the parents of one fallen Marine, Sgt. Byron Norwood of Pflugerville, Texas, who was killed during the assault on Fallujah. An unexpectedly poignant moment came when Bush signaled parents Janet and Bill Norwood, who stood to a standing ovation. Mrs. Norwood was then hugged by al-Suhail, the Iraqi woman who had been sitting in front of the Norwoods.

Bush encouraged the international community to support Iraqis following their historic election last weekend. He also urged the nations of the world to help train Iraqi security forces and make the struggling nation a model for democratic reform in the Middle East.

“The new political situation in Iraq opens a new phase of our work in that country … we will increasingly focus our efforts on helping prepare more capable Iraqi security forces — forces with skilled officers, and an effective command structure," he will say.

Bush thanked the U.S. military for its work and pledged to continue to support servicemen and women by giving them the tools they need to do their jobs. Although the president proposed that families of U.S. troops killed in Iraq, Afghanistan and war zones receive an extra $250,000 in government payments, Bush did not outline any exit strategy for U.S. troops as Democrats in Congress are demanding.

Instead, Bush said that U.S. troops will continue to teach Iraqi security forces the skills they need to be more self-reliant and take on greater security responsibilities. As they become more capable, foreign troops will recede.

Bush said as this process moves forward, the rest of the world will see that terrorists are not opposing coalition forces, but "trying to destroy the hopes of Iraqis, expressed in free elections. And the whole world now knows that a small group of extremists will not overturn the will of the Iraqi people.

"In the end, Iraqis must be able to defend their own country — and we will help that proud, new nation secure its liberty," he said.

Nonetheless, Democrats have pushed for a clear exit strategy that would give them some idea when U.S. troops could come home. House Majority Leader Nancy Pelosi (search) responded to the State of the Union address by pushing for more details on how long the United States will be responsible for Iraq.

"We all know that the United States cannot stay in Iraq indefinitely and continue to be viewed as an occupying force. Neither should we slip out the back door, falsely declaring victory but leaving chaos. We have never heard a clear plan from this administration for ending our presence in Iraq," Pelosi said.

The president also built on his inaugural address of two weeks ago. He spent some time on the issue of peace in the Middle East, including a peace between Israelis and Palestinians. To that end, the president asked "friends in the region to fight the common threat of terror while we encourage a higher standard of freedom."

He said Secretary of State Condoleezza Rice (search) was leaving for Israel and the West Bank to attend meetings with Prime Minister Sharon and Palestinian Authority President Mahmoud Abbas, who have already agreed on a peace summit. Bush said Rice's mission will be to develop a plan to get the Palestinian people to end terror and build the institutions of a peaceful, independent democratic state. He said he would ask Congress to give $350 million to support Palestinian political, economic and security reforms.

Bush reaffirmed his commitment to using diplomacy to deter the nuclear ambitions of North Korea and Iran, but he said the United States and its allies "must confront regimes that continue to harbor terrorists and pursue weapons of mass murder." He specifically named Syria, which "still allows its territory, and parts of Lebanon, to be used by terrorists who seek to destroy every chance of peace in the region."

Bush encouraged Saudi Arabia and Egypt to show their leadership in the region by allowing more citizen involvement. He also sent a message to the Iranian people that if they stand for their own liberty, the United States will be on their side.

"In the long term, the peace we seek will only be achieved by eliminating the conditions that feed radicalism and ideologies of murder. If whole regions of the world remain in despair and grow in hatred, they will be the recruiting grounds for terror, and that terror will stalk America and other free nations for decades. The only force powerful enough to stop the rise of tyranny and terror, and replace hatred with hope, is the force of human freedom,” the president said.

As in every State of the Union speech, one Cabinet and two congressional members were left out of the Capitol Hill auditorium where the president addressed the leading government and elected officials. This year, House Republican Conference Secretary John Doolittle, R-Calif., was at an undisclosed location during the address. Outgoing Commerce Secretary Don Evans and Sen. Kent Conrad, D-N.D., also were absent.