Bush cites Iraq gains, urges economic boost

WASHINGTON —  Relaxed, confident and unapologetic, President Bush delivered his seventh and likely final State of the Union address Monday, giving a triumphal appraisal of the war in Iraq and citing a list of modest proposals that came with two barbed veto threats.

The president opened the speech to the joint session of Congress with an appeal to bipartisanship, noting that the two parties had cooperated in recent days on proposed legislation to rescue the economy from a feared recession.

“In this election year, let us show our fellow Americans that we recognize our responsibilities and are determined to meet them,” Bush said. “And let us show them that Republican and Democrats can compete for votes and cooperate for results at the same time.”

But he quickly moved on to better-trod partisan ground, threatening to veto any tax increase and castigating Congress for what he considered wasteful funding for pet projects known as earmarks.

He said he would veto any spending bill that does not cut the cost of earmarks in half and would order his administration to ignore future earmarks attached to legislation at the last minute. “The people’s trust in their government is undermined by congressional earmarks,” he chided.

Some Democrats took offense. “I found it to be very combative and confrontational,” Rep. Ed Perlmutter (D-Colo.) said. “Right out of the box, he started off with everything he’s going to veto. His whole last two years has been about stopping change and stopping progress.”

Bush devoted the largest section of his speech to the Iraq war, and his tone contrasted sharply with that of a year earlier -- when he used the address to acknowledge insurgent violence was on the rise and announce a “surge” in troops.

This year, with violence waning, Bush returned to the soaring rhetoric more typical of his State of the Union speeches. “We will not rest until this enemy has been defeated,” he proclaimed. “We must do the difficult work today, so that years from now people will look back and say that this generation rose to the moment, prevailed in a tough fight, and left behind a more hopeful region and a safer America.”

Throughout the 53-minute address, Bush connected his themes by using the word “trust” as a rhetorical refrain to herald the conservative idea of small government.

“In all we do, we must trust in the ability of free people to make wise decisions, and empower them to improve their lives and their futures,” he said.

In the audience were the Democratic front-runners who are fighting fiercely to succeed him: Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois. The two sat a few feet apart but appeared to be avoiding each other.

“Tonight, for the seventh long year, the American people heard a State of the Union that didn’t reflect the America we see, and didn’t address the challenges we face,” Obama said.

Clinton complained that Bush did not acknowledge “that the economy is not working for middle-class families. Unfortunately, what he offered was more of the same -- a frustrating commitment to the same failed policies that helped turn record surpluses into large deficits, and push a thriving 21st century economy to the brink of recession.”

Bush’s speech was a mix of tried-and-true themes for the president, sprinkled with a few new proposals modest enough to have a chance of being enacted this year.

Many are ideas cherished by Bush since he took office but rejected or ignored by Congress. Among them were a call to make his first-term tax cuts permanent, a plea to reauthorize his No Child Left Behind education plan, and a proposal to change the way healthcare premiums are taxed.

Among the new, less ambitious ideas were proposals to extend education benefits and federal hiring preferences to military spouses, and a $300-million grant program to help inner-city families who want to send their children to private or parochial schools.

Throughout most of the speech, Republicans roared approval and demonstrated their fervor with standing ovations. When Democrats didn’t like what Bush was saying, they sat in stony silence. During the speech, one Republican surreptitiously read a magazine, while lawmakers on both sides stifled yawns.

Many Democrats singled out the president’s comments on the economy for criticism. Sen. Robert Menendez (D-N.J.) said: “The president touched so lightly on the state of the economy. I don’t think he has any idea the difficulty Americans are facing.”

The economic stimulus package is perhaps the most successful compromise Democrats and Republicans have forged since control of Congress shifted to the Democrats last year. The House is expected to approve the nearly $150-billion measure today.

However, there are signs the Senate will not go along with the proposal.

Just hours before Bush spoke, Sen. Max Baucus (D-Mont.), the Finance Committee chairman, unveiled a different plan -- a $500 rebate that would reach millions more taxpayers, including seniors living on Social Security and the wealthy. His plan would extend unemployment benefits.

On Iraq, Bush’s sanguine account of events contrasted with the more measured tone of top military and administration officials in recent weeks.

He offered no new details about plans for troop withdrawals. The administration is awaiting a new assessment from Gen. David H. Petraeus, the top American commander in Iraq, scheduled for March.

Bush also did not mention what has been widely cited as the major failure of the surge: the failure of the Iraqi government to take major steps toward national reconciliation.

“The Iraqis still have a distance to travel,” Bush acknowledged. “But after decades of dictatorship and the pain of sectarian violence, reconciliation is taking place -- and the Iraqi people are taking control of their future.”

In other foreign-policy areas, Bush struck a familiar tone in portraying a struggle between the forces of “freedom and peace” and those of extremism.

He described the war in Afghanistan as a success, without mentioning the resurgence of the Taliban and foreign militants. He said that “a nation that was once a safe haven for Al Qaeda is now a young democracy where boys and girls are going to school, new roads and hospitals are being built, and people are looking to the future with new hope.”

Bush took a hard line against the Iranian regime, which he said embodied “the forces of extremism.”

While he praised Iranians as “good and talented people,” he said the United States would negotiate with the government only if it “verifiably” suspended nuclear enrichment. “And to rejoin the community of nations, come clean about your nuclear intentions and past actions, stop your oppression at home, and cease your support for terror abroad.”

Bush did not address the effort to halt Iran’s nuclear ambitions, a push that has faced obstacles. He made no mention of North Korea, whose promise to abandon its nuclear program is in question.

On Mideast peace, he promised “America will do, and I will do, everything we can to help them achieve a peace agreement that defines a Palestinian state by the end of this year.”

Perhaps the most contentious part of the speech, at least for lawmakers, was Bush’s pledge to crack down on earmarks. Democrats noted scathingly that Bush’s action is coming only after the opposing party took control of Congress. “The number of earmarks exploded under Republican leadership in the House, and for six years President Bush did nothing to slow their growth,” said the House’s No. 2 Democrat, Rep. Steny H. Hoyer (D-Md.).

Some fellow Republicans who have railed against pork-barrel spending said they wished Bush had gone further. “But hey, it’s something,” said Rep. Jeff Flake (R-Ariz.).

Earmarking is under scrutiny because the practice has exploded, from 1,439 earmarks in 1995 to more than 13,000, costing $19 billion, in 2005.

Bush had just one item for social conservatives: a call for an unspecified amount of funding for stem cell research that involves skin cells rather than embryos. “On matters of science and life, we must trust in the innovative spirit of medical researchers and empower them to discover new treatments while respecting moral boundaries,” Bush said.

This is Bush’s last scheduled State of the Union address. He is unlikely to give another in his waning days in office in 2009, although a few outgoing presidents have done so.

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james.gerstenzang@ latimes.com

Times staff writers Ricardo Alonso-Zaldivar, Nicole Gaouette, Peter G. Gosselin, Noam N. Levey, Paul Richter, Julian E. Barnes and Richard Simon contributed to this report.