A look at what President Bush said and proposed, and some of the context of the remarks:

IRAQ

Mr. Bush said the "surge" of additional troops to Iraq last year had clearly reduced violence and put terrorists on the run. Now, he said, the U.S. wants to "sustain and build on" the gains of 2007 and shift the U.S. role to "partnering with Iraqi forces and, eventually, to a protective overwatch mission." U.S. troops have already begun working with Iraqi forces, notably in the ongoing offensive in Diyala province and elsewhere and in the current fighting in Mosul. But U.S. military officials have said it will be years before Iraqi forces can take responsibility for internal security. And he predicted a free Iraq would "show millions across the Middle East that a future of liberty is possible" and be "a source of stability in a dangerous part of the world." But progress in Iraq has been painfully slow, particularly in the Iraqi economy and security in some parts of the country.

ECONOMY

Mr. Bush said frankly that the economy is slowing and that Americans are uncertain about their economic future. He called on Congress to approve a $150 billion stimulus package crafted by House leaders and the Bush administration, and the Senate in particular to resist the urge to change the plan much and slow the process. Mr. Bush also called for his 2001 and 2003 tax cuts to be made permanent. But the chairman of the Senate Finance Committee unveiled a competing stimulus package Monday that expands unemployment insurance and provides tax rebates to more people, including senior citizens and the wealthy. In an election year, Democrats and Republicans are eager to be seen as tending to a sick economy, and they’ll find a way to pass the stimulus package. But there is almost zero chance of congressional Democrats extending Mr. Bush’s tax cuts beyond 2010, when most are set to expire.

FEDERAL BUDGET

The president said he would propose killing or trimming 151 "wasteful or bloated programs totaling more than $18 billion." He also threatened to veto any spending bill that does not cut the cost of lawmakers’ pet projects, known as earmarks, by half. And he called for lawmakers to be up front about them by including them in the main text of a bill rather than slipping them late into massive pieces of legislation. Mr. Bush is trying to claim a legacy as a fiscal hawk, after presiding over years of deficits and pork-laden budgets under Republican Congresses. He has signed spending bills containing about 55,000 earmarks worth more than $100 billion. Democrats will argue that they have already made earmarks more transparent by publishing the names of their congressional sponsors who get earmarks.

ENERGY

He hopes to reduce dependence on foreign sources of energy by making the United States a leader in clean-energy technology, including equipment that can capture carbon-dioxide emissions from coal-fired power plants. He wants to prod other countries into adopting similar technology with a $2 billion “international clean technology fund" and would address climate change by capping greenhouse-gas emissions but only if other countries do as well. Congressional Democrats share many of Mr. Bush’s energy goals but have a different approach to reaching them. They are likely to move forward with a system to reduce greenhouse-gas emissions by creating a “cap-and-trade” system that would allow American industry to buy and trade pollution credits. The legislation is unlikely to pass this year, but Congress will shape an approach — through hearings and committee votes — that is likely to pass if Mr. Bush is replaced by a Democratic president or by Arizona Sen. John McCain, who favors a cap-and-trade system.

HEALTH CARE

Mr. Bush wants Congress to expand health-care coverage by extending a tax deduction to families and individuals who purchase their own health insurance. He also seeks to strengthen the country’s system of private health insurance by expanding health savings accounts, creating shared health-insurance "associations" among small businesses and reducing the number of medical malpractice lawsuits. But action on any major health-care legislation is unlikely. The Democratic Congress’ signature health-care issue is the State Children’s Health Insurance Program, which covers the children of the working poor. Democrats want to expand it, but Mr. Bush twice vetoed a bill to do so last year, saying it would amount to government-sponsored health-care for families that should otherwise be able to afford coverage and in some cases already have it. Mr. Bush proposed the tax-deduction last year, but the administration didn’t pursue it aggressively and it went nowhere.

IMMIGRATION

Mr. Bush hasn’t forgotten about the challenge of immigration reform — and he’s not fixated just on border security, although he promoted his administration’s efforts to crack down on illegal immigration. Mr. Bush also reiterated his call for a guest-worker program and urged a "sensible and humane" solution to the 12 million illegal immigrants already inside the country. But the bill he championed last year was derided as amnesty for creating a path to citizenship for illegal immigrants. It’s an election year, so Congress won’t blaze a new path on immigration. Even small advances are unlikely.

Dave Michaels, Washington Bureau, and staff and wire reports