Bush turns focus to pocketbook issues

John W. Schoen Senior producer • Profile • E-mail

As President Bush grapples with an unpopular war in Iraq, he is turning his attention back to key pocketbook issues including health care and energy. Republicans, already looking ahead to next year's crucial elections, can only hope the administration's new domestic agenda pushes Iraq off the front page.

To be sure, Bush devoted an ample portion of his annual State of the Union address to the threat of terrorism and he war in Iraq. But much of the address is focused on domestic issues that have more daily impact on voters' lives.

“They’re getting tremendous heat at the White House from Republicans who are very worried about '08,” said Greg Valliere, chief strategist at Stanford Washington Research. “Their feeling is, if it’s nothing but Iraq between now and '08, they’re going to suffer even more losses in the next election — including quite possibly the White House.”

Among the key proposals was a call to slash U.S. gasoline consumption by up to 20 percent by 2017, in part by focusing on a range of alternative fuels. To meet that target, the administration is proposing to increase the amount of renewable and alternative fuels required by 2017 to 35 billions gallons a year, a fivefold increase in the current target, providing 15 percent of the 20 percent savings goal. The rest could come from raising the mandated auto fuel efficiency standards.

That marks a dramatic shift for a White House that has spent most of the past six years working with a Republican-led Congress to develop greater supplies of oil and natural gas. Early in the administration Vice President Dick Cheney famously described conservation as a “personal virtue” that had no place in national energy policy.

But the atmosphere is distinctly different now that Democrats control both houses of Congress and even Big Business recognizes that global warming is an issue that needs to be addressed. The White House also called for stopping the growth of carbon emissions within 10 years, but provided few details on how that goal could be achieved.

"For too long our nation has been dependent on foreign oil," Bush said in his prepared remarks. "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 also pressed for increasing oil supplies by stepping up domestic production and doubling the size of the Strategic Petroleum Reserve.

Skeptics argue that the talk about alternatives has a familiar ring to it and that the White House has never backed up its bold proposals with the budget requests needed to follow through.

"There’s a tendency to stand up on energy policy in the State of the Union and make all sorts of grandiose promises,” said Philip Clapp, president of the National Environmental Trust. “And then once the bill's passed and the crisis passes and we're below $3 (a gallon) then they never get funded.”

The White House's revised energy plan would include steps to raise the fuel efficiency of American cars. But the devil is in the details. Bush is said to be leaning toward a plan to mandate minimum fuel efficiency for individual car models. Some critics say that could be a step in the wrong direction — if it doesn’t also require fleet-wide increases in efficiency.

"It’s a bad idea because it allows any administration to hide what they’re really doing in overall fleet economy,” said Clapp.

At the center of the proposal is a call for big increases in the use of ethanol — whose producers, and the corn growers who supply them, already have been big beneficiaries of the White House energy policy and can expect more support in the future.

Subsidies for ethanol enjoy wide support in Congress — especially as the 2008 campaign begins to get under way in the farm belt. Ethanol subsidies also offer an important offset to possible cuts in other farm subsidies — which have become a major sticking point in the latest round of global trade talks.

“Ethanol has become the way to replace what both parties might want to cut from commodity price subsidies and keep a large money flow into the agricultural states,” said Clapp.

In his speech, Bush also proposed expansion of so-called “cellulosic” ethanol — which is uses a wider variety of source crops. Though supplies of corn-based ethanol are expanding rapidly, rising demand has forced up the prices. Growing ethanol production also has driven corn prices to their highest levels in a decade.

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