WASHINGTON - President Bush delivered a domestic agenda to congressional Democrats yesterday that was, in large part, modest and a reiteration of past proposals. Where he did break ground - on health care - his initiative was quickly dismissed by leading Democrats and seemed unlikely to form the basis of bipartisan action.
There were some striking omissions in Bush's speech. He did not offer a detailed proposal for dealing with the long-term financial problems in Medicare and Social Security, although he again identified those entitlement programs challenges. Nor did he make the grand gesture that might have spurred congressional Democrats into the bipartisan talks on entitlements that administration officials insist they want.
Bush renewed his call to overhaul immigration laws, considered one of his best chances to accomplish something big in the current Congress. But in general, his domestic agenda reflected the political constraints of a conservative second-term president facing a newly empowered Democratic Congress.
Aside from energy, the major focus of Bush's domestic proposals was an attempt to expand access to affordable health insurance by creating a tax benefit for those buying insurance on their own rather than through their employer. The Bush plan would require that employer-provided health benefits, which for decades have been exempt from income and payroll taxes, be treated as taxable income.
In effect, Bush is proposing a new standard deduction for health insurance. "Families with health insurance will pay no income or payroll taxes on $15,000 of their income," he said. The deduction for individuals would be $7,500. For 100 million Americans with employer-provided coverage, he said, that would mean lower taxes. But White House officials estimate that taxes could rise for 30 million people if they stay with health plans that cost more than the deduction.
Bush said the tax proposal was an attempt to "level the playing field" between Americans buying insurance on their own and the more than 50 percent of Americans who get it through their employers. Democrats, labor unions and some consumer advocates said the proposal would shake the foundations of the nation's health-care system and was unlikely to ever become law.
Congressional Democrats called the plan a middle-class tax increase, more likely to yield partisan warfare than consensus. "It's difficult to imagine a proposal like this making it through the House or the Senate," said a spokesman for Senate Majority Leader Harry Reid (D., Nev.).
House Ways and Means Committee Chairman Charles B. Rangel (D., N.Y.) said, "I cannot conceive of this as an olive branch, as an attempt to get something done." Rep. Pete D. Stark (D., Calif.), chairman of the Ways and Means subcommittee on health, said his panel would not consider Bush's proposal.
Prospects were less grim for immigration legislation. Bush renewed his push for a law to toughen border security, grant legal status to the nation's 12 million illegal immigrants, and create a temporary-worker program to ensure a steady flow of foreign workers to businesses.
The proposal, which would also toughen criminal and financial penalties for employers who hire illegal immigrants, has a much stronger chance to pass this year than it did when Republicans controlled Congress, lawmakers say. Leading Senate Democrats, who have consulted with Bush in recent weeks, say they expect to introduce legislation next month. House Democrats expect to follow.
But approval is far from assured. The AFL-CIO is determined to scuttle the temporary-worker program, saying it threatens to replace American workers with foreigners. Administration officials emphasized yesterday that the program would have to be "truly temporary," which left some advocates for immigrants concerned that Bush might oppose a path to permanent residency or citizenship for temporary workers.
And some moderate Democrats, along with conservative Republicans, strongly oppose proposals to legalize illegal immigrants, saying that would amount to an amnesty for lawbreakers.