Last Week

Calling Attention to the Economy

Sunday, January 29, 2006

On Tuesday, President Bush will deliver his State of the Union address to a joint session of Congress and to the nation. The betting is he will offer a lot of words on Iraq and more rhetoric than you might imagine on domestic economic issues, particularly health care.

The SOTU, as insiders call it, is usually the president's most important speech of the year. Preparation takes months and often involves every major Cabinet department. The address is the chief executive's assessment of the government and an outline of the major laws he wants Congress to pass.

It is also a key political event. Ever since President Ronald Reagan, the question of who sits in the gallery near the first lady has been freighted with all sorts of significance. This year the buzz in Washington is that the president hopes that one person there will be the wife of Samuel A. Alito Jr., and that Alito himself, by then a newly sworn-in associate justice of the Supreme Court, will be sitting happily in front of Bush in the well of the House chamber. We'll see.

What isn't in doubt is that the president wants to crow about how well the economy has been doing. At his news conference last week, Bush said he was "looking forward" to talking about the growth in jobs since the spring of 2003. He also wants to press Congress to extend the many tax cuts that he signed into law over the past five years. In addition, more funding for education, energy production and health care are expected to be part of the mix.

Medical coverage will probably take up a larger than usual chunk of his speech, aides have said. Bush will likely propose that Americans be allowed to take tax deductions on more out-of pocket medical expenses. He also plans to permit people to keep their insurance -- without extra cost -- if they change jobs or decide to start a business, and to call for expanded health savings accounts, which allow people with bare-bones insurance policies to put money into tax-free accounts for their medical expenses.

Sweeping recommendations like a revamping of Social Security or tax reform are luxuries that a president with relatively low approval ratings can't afford. The question is, can he even afford these more modest proposals? Heritage Foundation budget expert Brian M. Riedl e-mailed a warning last week that "the budget situation is substantially more dire than [Congress's official estimate] suggests." And that already calls for massive deficits.

It's also hard to know how Bush will change the country's focus from the war to the economy. Polls show that Americans worry about their personal security before they fret over their pocketbooks. Until conditions in Iraq and the war against terrorists turn around, the economy will probably remain a second-tier issue no matter how hard the president tries to change the subject.


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