Prospects for Bush's Second Term

WASHINGTON – President Bush (search) heads into his second term with the stabilization of Iraq under a democratic government as his top policy goal. But he also has unfinished domestic business, including making his sweeping tax cuts permanent, reforming Social Security, and promoting energy production.

Here is a summary of his plans:

IRAQ-TERRORISM

Bush intends to keep a U.S. presence in Iraq until the country is stable and run by a democratically elected government. He has offered no timeline for withdrawing U.S. forces but does plan to seek additional help from other countries in securing Iraq while it is rebuilt. He has ruled out instituting a draft to bolster the U.S. military should the Iraq situation worsen or drag on.

Bush is not likely to abandon his policy of pre-emptive action against potential threats to the United States. But with Iraq still a big uncertainty, it is not clear whether Bush will devote a greater share of his second-term attention to the worldwide dragnet for Usama bin Laden (search).

Comprehensive restructuring of U.S. military forces overseas, begun in Bush's first term, is likely to continue. But it is doubtful that Defense Secretary Donald Rumsfeld will stick around to see that effort through. If Secretary of State Colin Powell departs as expected, Bush will have to select a new top diplomat.

TAXES

Bush pledged to work in a second term to get Congress to make permanent the $1.9 trillion in tax cuts over a decade that he won in his first term. Most of the reductions, including elimination of the estate tax, are schedule to end after 2010. The 10-year cost of extending all of Bush tax cuts has been put at more than $1 trillion.

He also pledged to overhaul the tax code in a second term. His first step will be to appoint a commission to recommend the best way to revamp the tax system. He has not spelled out what alterations he would prefer, but some Republican conservatives are campaigning to scrap the current income tax and replace it with a national sales tax.

JOBS

There are about 821,000 fewer jobs in the country than when Bush took office in January 2001. Bush says he can spur economic growth and create jobs by making permanent his four rounds of tax cuts so people could keep and spend more of the money they earn. He says simplifying the tax code will encourage saving and investment, and he pledges to stop frivolous lawsuits that he claims divert money businesses could spend on new jobs. Bush plans to create "opportunity zones" to spur investment in needy communities through tax benefits. He promises to increase federal funding for research and development, and to restrain overall federal spending.

SOCIAL SECURITY

Bush wants to let younger workers divert some of their payroll taxes, which fund retirees' Social Security benefits, into personal investment accounts similar to a 401(k). He promises that benefits will not be cut for current retirees or people nearing retirement. He has not provided details on how such a system would work or be financed. Experts widely agree that allowing investment accounts could cost $2 trillion or more.

OIL-ENERGY

At a time of soaring oil prices, Bush is expected to continue promoting new energy production and press Congress for laws that encourage development of traditional fossil energy sources — oil, coal and natural gas.

He also is likely to renew his call for Congress to allow oil drilling in the Arctic National Wildlife Refuge (search). Environmentalists strongly oppose drilling there.

Look for a continued effort to make it easier to develop oil and gas on federal land. He will push Congress to require reliability standards for power lines and provide incentives for new power line construction. But he opposes enacting federal requirements for utilities to use renewable fuels, arguing that should be up to the states.

His hands-off policy on energy prices is expected to continue. And he is likely to continue pumping oil into the government's Strategic Petroleum Reserve and reject calls to use the government oil except to counter a major supply disruption.

ENVIRONMENT

Bush's top environmental priority is to rewrite air pollution laws and regulations. His agenda could be overshadowed by an international climate treaty taking effect without U.S. participation.

He hopes finally to persuade Congress to pass his stalled "Clear Skies" plan for curtailing power plant pollution but not emissions of carbon dioxide, the main greenhouse gas linked to global warming.

Tough court fights loom on his easing of rules that require older industrial plants and refineries to add pollution controls if they expand. Under court order, the EPA is due to introduce by March the first national cap on mercury emissions.

Bush plans to cut spending on low-interest loans for local clean water projects and to seek more federal support for development of a hydrogen-fueled car.

He also wants to overturn a Clinton-era ban on 58 million acres of roadless areas and allow logging and road-building in them unless governors petition the federal government to preserve them. He would keep Yellowstone National Park open to snowmobiling, despite a challenge in federal court.

EDUCATION

Bush wants to expand No Child Left Behind (search), the most aggressive federal shake-up of education in a generation. The law — central to Bush's domestic agenda in his first term — orders schools to make yearly progress among all groups of students or risk penalties.

The president wants to require states to test students annually in reading and math in grades three through 11, two more years of testing in high school than now required.

This is part of Bush's plan to shift more attention to the upper grades and college to ensure students are better prepared for work. But he is sure to face continued criticism that, despite regular spending increases, he has not put enough federal money into schools.

The Bush administration has shown no interest in adjusting the education law before its renewal date in 2007, although his Education Department says it will adjust enforcement as needed.

A Bush presidency also ensures the government will keep promoting private-school vouchers, as it did in winning the first federal school vouchers, for the District of Columbia. Bush has a backlog of issues waiting for him, from Head Start to higher education.

HEALTH

Bush wants to expand tax breaks for lower-income Americans who buy their own insurance and for those who purchase high-deductible policies and have health savings accounts, which are tax-free investments that can be used for health expenses.

Bush also favors allowing small businesses in different states to band together to offer insurance to workers.

The president is stepping up efforts to enroll uninsured children in government-paid health care programs.

Republicans will renew their push to limit medical malpractice awards, which they argue drive up health care costs through fast-rising malpractice insurance rates and the practice of defensive medicine.

Bush also may seek again to alter the way the federal government pays its share of the Medicaid program for the poor. The president wants to give states broad new authority to cut or increase benefits and add or drop patients. States that choose to participate would get a pot of money to provide health care to some of their neediest residents and unprecedented discretion over how to spend it.

INTELLIGENCE-HOMELAND SECURITY

Bush has promised to improve security for ports, borders, transportation and critical infrastructure, particularly by staying on the offense against terrorists.

Odds are Homeland Security Department Secretary Tom Ridge won't stay in that post and may head to the private sector.

At the CIA, Republican Porter Goss, who left the House to become director in late September, is expected to stay. Goss wants to expand the agency's clandestine service, improve language capabilities and encourage risk-taking by intelligence analysts and operatives. But his Republican credentials have some Democrats concerned about his ability to keep the agency independent of political influence.

Down the road, Bush may have a key intelligence opening to fill. Congress wasn't able to agree on intelligence-reform legislation before the election, but lawmakers might eventually create a National Intelligence Director to oversee the government's intelligence agencies. Goss might seek a promotion, but many aren't ruling out that Bush could select someone else.

JUSTICE

Bush wants the Patriot Act renewed in its entirety and has fought any limits on it, arguing that it is vital in detecting and disrupting terrorists inside U.S. borders. Bush has promised to continue proposing large budget increases for the FBI and to improve information sharing among all federal law enforcement agencies to guard against terror attacks.

It's unclear whether Bush will ask Attorney General John Ashcroft to stay. If he doesn't, some Republicans are pushing for Bush to nominate Ashcroft's former deputy, Larry Thompson, as the nation's first black attorney general.

SUPREME COURT

During Bush's second administration, one or more of the court's five conservatives will likely retire, opening the first vacancies since 1994. The most likely is Chief Justice William H. Rehnquist, who is 80 and was recently diagnosed with thyroid cancer. If Bush chose to elevate Justice Sandra Day O'Connor, she would become the first woman chief justice. The 74-year-old O'Connor, however, may be a retirement prospect herself. Bush also might use any vacancy to give the court its first Hispanic member.

The other conservative justices — Antonin Scalia, Anthony M. Kennedy and Clarence Thomas — are less likely to leave. One question mark is Justice John Paul Stevens, at age 84 the oldest of the nine justices and leader of its liberal wing. A Stevens retirement would give Bush an opportunity to make the court more conservative on issues like capital punishment and abortion. Bush also must choose a new lawyer to represent the government before the court. Theodore Olson resigned as solicitor general over the summer to return to a lucrative private practice.

TRANSPORTATION

Bush is expected to stay the course on transportation policy. He will continue to oppose an increase in the federal gas tax to pay for more highway spending.

Bush will persist in his push to privatize parts of Amtrak and eliminate the passenger railroad's unprofitable long-distance lines.

The Federal Aviation Administration has said it will come up with a plan to replace air traffic controllers nearing retirement, though it is unclear where the funding will come from. Similarly, Bush's cuts to FAA spending on facilities and equipment may slow the pace of air traffic control modernization.

The only Democratic member of Bush's cabinet, Transportation Secretary Norman Mineta, is not expected to stay. Bush may replace him with FAA Administrator Marion Blakey, Energy Secretary Spencer Abraham or Labor Secretary Elaine Chao.

HOUSING

Bush wants Congress to pass a tax credit for builders that erect homes affordable to middle-income families. He has also proposed the creation of new "opportunity zones" that would give struggling urban and rural communities priority in receiving economic assistance, education and job training programs and affordable housing.

Increasing homeownership, especially among minorities, is expected to remain a main housing target for Bush. The president in 2002 set a goal of 5.5 million new black and Hispanic homeowners by 2010, and Bush has pointed to rising minority homeownership rates as proof his plans work.

Revamping a voucher program that helps 2 million families — mainly poor — pay rent would remain a priority. HUD officials say they need to streamline costs but give local agencies more control and accountability over the $14.5 billion Section 8 program. Opponents contend the administration is trying to weaken vouchers.

Bush would continue his campaign against chronic homelessness, hoping that increasing funding for permanent housing and services for those who live primarily on the streets frees resources to assist those who are temporarily homeless.

FARM

Bush calls the current farm bill a success. He supports voluntary farm conservation efforts that include tax incentives and seeks to add another 800,000 to acres to the federal Conservation Reserve Program.

The president is seeking to renew Trade Promotion Authority and opposes efforts to label or otherwise restrict sales of genetically engineered food.

Bush seeks to relax the Endangered Species Act to make it more friendly to farmers and ranchers. He supports construction at locks and dams on the Mississippi and Missouri rivers to ship grain more swiftly to Gulf ports for export.

And he proposes to grant legal temporary worker status to millions of undocumented aliens, which would affect farm workers.

FOREIGN AFFAIRS

Bush intends to continue using diplomacy to try to halt North Korea's nuclear weapons programs and is ready to offer assurances he would not use force. Negotiations are being conducted jointly with South Korea, Japan, Russia and China.

In the Middle East, Bush has affirmed strong support for Israel and its security but avoided taking stands or providing details on how he intended to advance it or promote agreements between Israel and its Arab neighbors. Bush approved of Israeli Prime Minister Ariel Sharon's plan to relinquish all of Gaza and to evacuate a handful of Jewish settlements on the West Bank.

Bush has worked for good relations with China. Last December, with visiting Premier Wen Jiabao at his side at the White House, he sent a strong warning to Taiwan not to take any action toward independence and cause dangerous new tensions with Beijing.

In Europe, Bush expanded the NATO alliance and has sought to patch up differences with Germany and France over the war with Iraq. He plans to withdraw 70,000 troops from Europe and South Korea while reconfiguring U.S. military in Germany with trimmer and faster-moving units.