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Wednesday, January 21, 2004 - Page updated at 12:16 P.M.

President claims tax cuts, other policies conquered recession

By Maura Reynolds
Los Angeles Times

RON EDMONDS / AP
Well-wishers congratulate President Bush last night after his 54-minute State of the Union address to a joint session of Congress at the Capitol.
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WASHINGTON — President Bush said in his State of the Union speech last night that the use of force abroad and deep tax cuts at home had allowed the nation to turn back its two largest threats — terrorism and recession — and that the nation had emerged from its challenges "confident and strong."

Bush used the annual address to Congress to underscore the major themes of his re-election campaign. He said that the war against Iraq has made the world safer and that his administration's aggressive approach against terrorists and rogue regimes had brought results in Iraq, Afghanistan and elsewhere.

"Because of American leadership and resolve, the world is changing for the better," Bush said. As an example, he cited the recent decision of Libya to voluntarily abandon its nuclear-weapons program.

"And one reason is clear: For diplomacy to be effective, words must be credible — and no one can now doubt the word of America," Bush said in his annual report on the state of the nation.

He also said his economic policies, including $1.7 trillion in tax cuts, had stimulated the economy out of recession. He noted that economic growth, home-construction and home-ownership rates are at record levels. But he added that "America's growing economy is also a changing economy" and that new programs were needed to help workers cope with those changes.

He proposed an education plan to increase math and science training for middle- and high-school students and modest funding increases in tuition grants for low-income college students and to community colleges to help workers learn job skills.

He briefly mentioned the need for job creation but did not mention the nation had shed 2.3 million jobs since he took office in January 2001.

"Job training is important, and so is job creation," Bush said. "We must continue to pursue an aggressive, pro-growth economic agenda."

To that end, Bush pushed the members of Congress to give permanent approval to a range of tax cuts that are due to expire. Democrats and some Republicans blame those tax cuts for ballooning the federal deficit to $500 billion this year.

As Bush delivered key lines, the applause — which interrupted him 60 times — was often partisan. When he told members of Congress, "The tax relief you passed is working," many Democrats remained seated as Republicans gave him a standing ovation.

One of the best-received lines, winning a bipartisan standing ovation, came when he told U.S. troops and their families, "My administration and this Congress will give you the resources you need to fight and win the war on terror."

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The president opened the speech with national-security issues, a reversal of the traditional order, which places domestic policy first. Aides said the switch was aimed at highlighting the centrality of foreign policy to his presidency and to his re-election campaign.

While Democrats and some allies have criticized Bush's foreign policy as divisive and counterproductive, the president claimed a string of successes. In Iraq, he said, the "once all-powerful ruler was found in a hole, and now sits in a prison cell." Forty-five of the top 55 former officials of the Iraqi regime have been caught or killed, he said.

"The work of building a new Iraq is hard, and it is right," Bush said. "And America has always been willing to do what it takes for what is right."

In contrast with last year, when Bush carefully sought to build a case that the United States needed to act against Saddam Hussein, the president did not delve into the details of the dictator's disputed nonconventional-weapons program.

But he also gave no ground on the issue, pointing out that a U.S. weapons team continues to search for nonconventional weapons. He said the team's interim report "identified dozens of weapons-of-mass-destruction-related program activities and significant amounts of equipment that Iraq concealed."

"Had we failed to act, this dictator's weapons-of-mass-destruction program would continue to this day," he said.

Bush sought to emphasize that despite criticism of his team's go-it-alone approach to foreign policy, his administration has worked often with other nations. He said it was "hard to explain" that critics would demand an internationalization of the Iraq effort, considering that 34 countries are helping out.

In his desire to show the United States is cooperating with other nations on Iraq, he said that the United Nations has joined the effort, even though the body's officials have yet to officially sign on.

He noted the United States is working with other nations in East Asia to try to persuade North Korea to abandon its nuclear-weapons program.

And he pointed out that "America and the international community are demanding Iran keep its commitments and not develop nuclear weapons."

In his intense focus on terrorists and rogue regimes, Bush left unmentioned many traditional foreign-policy concerns.

The Israeli-Palestinian conflict, now in a new spiral of violence, was not mentioned. Bush said nothing of the problems of Latin America, which at the start of his administration he called a top priority.

He called for a continuation of the efforts against al-Qaida but made no mention of the group's leader, Osama bin Laden, who remains at large after more than two years of pursuit.

In the second half of the 54-minute address, Bush offered a rosy picture of the economy and laid out some modest proposals to help the poor. Several of those had special appeal for the religious conservatives who are part of his core constituency. They included an increase in federal support for abstinence-based sex-education programs and religion-based drug-addiction programs.

The president also repeated his commitment to defend "the sanctity of marriage," and he criticized judges who legalize gay marriage. In a carefully worded passage, he suggested a constitutional amendment might be required to stave off gay-marriage statutes, but he stopped just short of embracing the idea.

"If judges insist on forcing their arbitrary will upon the people, the only alternative left to the people would be the constitutional process," Bush said. "Our nation must defend the sanctity of marriage."

On the economy, Bush said his policies — especially his three tax-cut packages — helped the nation survive the serial shocks of recession, Sept. 11, corporate-accounting scandals and Iraq war jitters.

As evidence of the economy's gains, he cited the third quarter's 8.2 percent growth spurt, high levels of home building and ownership, increased manufacturing, low inflation and interest rates, rising exports, high productivity and recent job growth.

"Because you acted to stimulate our economy with tax relief, this economy is strong and growing stronger," Bush said.

The president said he could cut the deficit in half over five years if Congress adopted his budget, which would hold the growth of discretionary domestic spending to 4 percent annually. And he demanded that lawmakers make his previous tax cuts permanent, instead of allowing them to expire as currently scheduled.

Bush also called on Congress to let Americans invest a portion of their Social Security taxes in private-investment accounts. Economists have estimated extending the tax cuts and partially privatizing Social Security could boost future deficits by up to $2 trillion over the next 10 years.

Bush's address was light on what some analysts — recalling the president's father's administration — refer to as the "vision thing." He offered few far-reaching programs for the future. One was expected to be his space-exploration program unveiled last week. But that proposal has met with a cold shoulder from many fiscal conservatives who see it as a luxury at a time of big deficits.

An administration official said Bush did not mention the space initiative in the State of the Union address because he had already delivered a major speech on the topic. But the official acknowledged that initial reaction to the proposal has not been enthusiastic in many quarters of Congress.

Bush also gave comparably short shrift to his immigration-reform plan, which has run into resistance from fellow Republicans. While many Democrats said it does not go far enough to open the doors of citizenship to immigrants, some conservative Republicans opposed to liberalizing immigration rules think Bush wants to go too far. "We're getting slammed from both sides," the administration official said.

Los Angeles Times staff writers Ricardo Alonso-Zaldivar, Edwin Chen, Mary Curtius, Sonni Efron, Peter Gosselin, Vicki Kemper, Janet Hook, Jon Marino, Paul Richter, Elizabeth Shogren, Richard Simon, Warren Vieth and Aaron Zitner contributed to this report.

Copyright © 2004 The Seattle Times Company

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