Salesman in Chief

Despite opposition, Bush pushes ideas on energy, immigration, health care, and other economic issues. All he has to do is seal the deal

by Eamon Javers

President Bush walked into the chamber of the House of Representatives last night knowing he faced the toughest audience of his political career: newly empowered congressional Democrats who have vowed to defeat almost all of his signature initiatives and erstwhile Republican allies who are increasingly anxious to distance themselves from a President with steadily declining political support.

Still, he told his largely somber audience that "Congress has changed, but our responsibilities have not." And he pushed lawmakers to find solutions to some of the biggest problems facing the nation, including energy dependence, immigration, health care, federal entitlements, and other issues that have long frustrated even those Presidents with political capital to spare.

The speech marked the beginning of the last phase of the Bush Presidency: a two-year period in which he must deal with aggressive Democratic opposition on Capitol Hill and will find himself increasingly overshadowed by Presidential candidates of both parties jockeying for position in the 2008 campaign. The coming months will determine whether it is too late for Bush to return to a strength he touted in his first campaign for the Presidency in 2000—his successes working across party lines with a Democratic legislature while serving as governor of Texas in the late 1990s.

And while the attention of the world will focus on his continued push for an increasingly unpopular military escalation in Iraq—his comments on which elicited only dead silence in the House chamber for long stretches of the speech—the State of the Union also had wide-ranging implications for Corporate America.

Health Care

The President offered new details on his proposal to make basic, private health insurance more affordable. Bush's plan would offer new tax deductions for health insurance costs, but for the first time treat employer contributions to health benefit plans as taxable income. Of the trade-off, Bush said, "with this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills."

But even as he spoke, the President's plan appeared dead on arrival on Capitol Hill. Representative Pete Stark (D-Calif.), who chairs the Ways & Means Committee's health subcommittee, said he would not hold hearings on a proposal he views as a threat to the long-standing tradition of employer-based health care. The idea also garnered only lukewarm support from the U.S. Chamber of Commerce, where Executive Vice-President R. Bruce Josten praised the spirit of the measure and promised to "analyze it carefully."

Energy

Declaring that "for too long our nation has been dependent on foreign oil," Bush laid down a goal of reducing U.S. gasoline usage by 20% in the next 10 years. He proposed increases in Corporate Average Fuel Economy (CAFE) standards for cars and in the supply of renewable and alternative fuels. Anticipation of his proposal in recent days has pushed up the stocks of major ethanol producers, including Archer Daniels Midland (ADM) and Verasun Energy (VSE).

It's no surprise, however, that the proposal won him no fans in the oil lobby: "Unfortunately, bio-fuels are not a panacea for America's supply problems, nor can they deliver on the much-touted promise of energy independence," said Charles Drevna, executive vice-president of the National Petrochemical & Refiners Assn., whose members include major oil companies Exxon Mobil (XOM), ConocoPhillips (COP), and Chevron (CVX), as well as many smaller players.

And even as the President called global climate change a "serious challenge," Democrats on the Hill were preparing to skewer the Administration's handling of global warming. Hours before President Bush spoke, House Oversight & Government Reform Committee Chairman Henry Waxman (D-Calif.) announced hearings questioning the Bush Administration's alleged interference in the work of government climate change scientists researching global warming.