ECONOMY: Touts stimulus plan, recognizes 'kitchen table' concerns
IRAQ: Points to progress 'few of us could have imagined'
TONE: Adopts less partisan - and less ambitious - approach

Tom Sloan/Getty Images

President George W. Bush during his 2008 State of the Union address.

WASHINGTON – President Bush on Monday used his final State of the Union address to launch what the White House called "a sprint to the finish," but his modest agenda made it clear that his diminished political standing and a wary Democratic Congress prohibit grand ambitions for his final year in office.

The 53-minute address seemed aimed more at what presidential advisers called "realistic" goals than trying to establish a lasting Bush legacy.

Though he remained insistent that his Iraq policy is working well – "the American and Iraqi surges have achieved results few of us could have imagined just one year ago" – he barely mentioned other initiatives that were the centerpieces of his earlier annual addresses, notably overhauls of immigration and Social Security, which both failed.

Instead, Mr. Bush talked of what may be possible in his final year in office. He voiced special pride in the $150 billion economic stimulus plan that he and House leaders forged last week.

"At kitchen tables across our country, there is concern about our economic future," the president said. "In the long run, Americans can be confident about our economic growth. But in the short run, we can all see that growth is slowing."

He also offered more humble initiatives, such as urging the ratification of free-trade agreements with Colombia, Panama and South Korea, and $300 million in scholarships to help poor children attend private and faith-based schools or out-of-area public schools.

This was a gentler, more accommodating president, one signaling that he was still wounded from the bruising fights he endured last year with the Democratic Congress.

"In this election year," the president said, "let us show our fellow Americans that we recognize our responsibilities and are determined to meet them. And let us show them that Republicans and Democrats can compete for votes and cooperate for results at the same time."

In the Democratic response, Kansas Gov. Kathleen Sebelius used a similar tone: "The new Democratic majority of Congress and the vast majority of Americans are ready, ready to chart a new course."

Mr. Bush cited a need for tax breaks, both short and long term, and said he would submit a budget next week that ends or substantially cuts 151 "wasteful or bloated programs" totaling more than $18 billion. He promised to veto any measure that doesn't halve the number and dollar amount of "earmarks," special projects that lawmakers insert into spending bills without due review.

"The people's trust in their government," Mr. Bush said, "is undermined by congressional earmarks."

This year, he remembered to include the effort to rebuild New Orleans after Hurricane Katrina – a notable omission from last year's address. Mr. Bush said his annual meeting with the leaders of Mexico and Canada will be held this year in New Orleans, to show off recovery efforts.

He touched only briefly on several vexing problems that he's been trying to ease throughout his presidency.

He mentioned, but didn't dwell on, the looming fiscal crisis in Social Security and Medicare, both due to cost taxpayers trillions in the near future as baby boomers retire. He called this emerging crisis, as well as an immigration overhaul, "pressing challenges that I have raised before this body and that this body has failed to address."

Then the gentler Mr. Bush resurfaced: "Now I ask members of Congress to offer your proposals," he said, "and come up with a bipartisan solution to save these vital programs for our children and grandchildren."

White House counselor Ed Gillespie seemed almost apologetic about including such lofty subjects, saying that viewers would be disappointed if such an important speech didn't mention such topics. But, in briefing reporters before the speech, Mr. Gillespie acknowledged that little progress was expected on them this year.

On specific new proposals, Mr. Bush aimed small. One new initiative would allow all service members to transfer any unused GI education benefits to spouses or children. Only the Army currently permits such transfers.

Mr. Bush also would extend federal government hiring preferences now available to veterans to their spouses. Such ideas are unlikely to meet serious resistance.

But the Iraq war, which enters its sixth year in March, will. Nevertheless, Mr. Bush wouldn't budge from his view that it is a noble and increasingly successful cause.

"One year ago, our enemies were succeeding in their efforts to plunge Iraq into chaos," he said. "So we reviewed our strategy and changed course."

Today, Mr. Bush said, "some may deny the surge is working, but among the terrorists there is no doubt. Al-Qaeda is on the run in Iraq, and this enemy will be defeated."

America's enemies in Iraq, Mr. Bush said, "have been hit hard. They are not yet defeated, and we can still expect tough fighting ahead. ... American troops are shifting from leading operations to partnering with Iraqi forces and eventually to a protective overwatch mission."

Ms. Sebelius had a different view of Iraq.

"The last five years have cost us dearly – in lives lost, in thousands of wounded warriors whose futures may never be the same, in challenges not met here at home because our resources were committed elsewhere," she said. "America's foreign policy has left us with fewer allies and more enemies."

David Lightman, McClatchy Newspapers