President Bush's State of the Union address last night offered a modest outline for domestic programs in the year ahead, a sharp contrast to the expansive role he mapped out for America in the world.

Describing America as a "nation that believes in the future . . . that can shape the future," Bush reached into the past for proposals from the first two years of his administration -- and from previous Republican presidents.

Chief among them was a call to turn as much as $20 billion in federal programs over to the states for them to run free from federal regulations. Proclaiming the "innovative power of 'States as Laboratories,' " Bush said that "where power cannot be put directly in the hands of the individual, it should be moved closer to the people -- away from Washington."

The idea is hardly a new one. In his 1982 State of the Union address, President Ronald Reagan outlined a "New Federalism" that would turn more and more programs over to states to run. That, in turn, was reminiscent of President Richard Nixon's program turning federal revenues over to states.

Bush used the newly minted theme of empowering individuals to describe a number of other previously proposed initiatives: He would enable "parents to choose their children's schools," encourage "tenant control and ownership of public housing" and create enterprise zones to encourage investment in run-down neighborhoods.

While not using the precise terminology, Bush acknowledged the notion of "empowerment" that has been championed by conservative Republicans who have put such proposals under the umbrella of the "New Paradigm." That phrase has been put forward by White House aide James P. Pinkerton, mocked by Office of Management and Budget Director Richard G. Darman and defended by House Minority Whip Newt Gingrich (R-Ga.).

Bush offered a minimalist approach on several domestic issues, and said little about difficult economic problems. He didn't mention the record size of the federal deficit, and paused to discuss the nation's economic woes only long enough to vow "We will get this recession behind us."

On civil rights, Bush said that all Americans have a "responsibility to speak out against racism, bigotry and hate." But he offered no new proposals, pledging only to "continue our vigorous enforcement of existing statutes" and to oppose hiring quotas, an issue Republican candidates put to good use in last year's congressional elections.

Democrats in Congress intend to push employment discrimination legislation that Bush charged would impose quotas when he vetoed it last year.

Bush also gave only brief mention to previous commitments to develop new policies on energy and health. He called for "conservation and efficiency, increased development and greater use of alternative fuels," and pledged new "prevention initiatives . . . to promote a healthier America."

While seeking to pacify conservatives in his party by standing by his 1988 campaign pledge to cut taxes on capital gains, Bush also sought to avoid rekindling a political confrontation over the issue with Democrats. He recommended that Federal Reserve Board Chairman Alan Greenspan mediate the dispute over whether the cut would reduce tax receipts, as the congressional Joint Committee on Taxation claims, or would increase them, as the administration contends.

During last year's budget negotiations, Democrats used Bush's insistence on the capital gains tax cut, which they claimed would disproportionately benefit the wealthy, to portray the president as protecting the rich.

The president also endorsed the long-awaited Treasury report on the overhaul of deposit insurance and the financial system, but he revealed no specifics about the proposals. The report, due next week, is expected to recommend the most far-reaching changes since the Depression, including the abolition of the laws that prohibit banks from underwriting securities and from doing business across state lines.

Bush said his budget proposal for the year beginning Oct. 1, which is due Monday, would reintroduce plans for tax-free savings accounts for families and penalty-free withdrawals from Individual Retirement Accounts for first-time home-buyers.

Without offering any details or committing his administration to significant new spending, Bush renewed calls for improving education, scientific research and development and fighting crime and drug use. Specifics are expected in the president's budget submission.

Despite the war in the Persian Gulf, Bush tried to maintain the upbeat tone of the previous status reports he has delivered to Congress. "Many presidents have come to this chamber in times of great crisis," Bush said two years ago from the same rostrum. "War. Depression. Loss of national spirit." But that night, he said, "we are headed the right way."

Last night, Bush for the first time addressed a nation at war, in the midst of an economic downturn and, according to the latest Washington Post-ABC News poll, sharply divided over where the country is headed.

"I'm not unrealistic about the future," he said. "But there are reasons to be optimistic about our economy."

Bush has always shown a preference for foreign policy over domestic affairs, once admitting that worrying about the homefront was not as much fun. Americans have noted that division, as well, with those questioned for the latest Post-ABC poll giving Bush much higher marks for his handling of the war than for his handling of domestic matters.

And now, with attention riveted on Americans fighting a war in the Persian Gulf, domestic affairs are likely to receive even less of the president's time.

"It's not that the wheels of government stop turning," Stuart E. Eizenstat, domestic policy adviser to President Jimmy Carter during the Soviet invasion of Afghanistan and the Iranian hostage crisis, said yesterday. "The real issue is the attention span of the president." Domestic initiatives "will get secondary treatment because he can't devote the time to sell them."

Staff writer Steven Mufson contributed to this report.