Bush puts election focus on the economy

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George Bush early today laid out what amounted to his 2004 re-election platform, in an attempt to regain the political limelight for the Republicans after Massachusetts Senator John Kerry's stunning victory in Iowa's Democratic caucuses.

In his one-hour prime-time address to Congress ­ the last State of the Union of his four-year term ­ Mr Bush defended the invasion of Iraq, and warned that the terrorist threat against the US had not disappeared. He also had a series of domestic policy proposals. His aim is to build on the economic recovery under way, which Republican strategists believe is key to victory by the President in November.

Adnan Pachachi, current President of the provisional Iraqi Governing Council, was invited to watch from the House of Representatives visitors' gallery as Mr Bush vowed not to leave the job of reconstruction in Iraq unfinished. With more than 500 American troops killed in Iraq, he said, "The work of building a new Iraq is hard, and it is right."

"We have not come all this way ? through tragedy and trial and war ? only to falter and leave our work unfinished," he said.

He also pointed to Libya's decision to give up its weapons of mass destruction as proof that the war to topple Saddam had concentrated minds across the Middle East. But the President gave a sombre warning that the risk of new terrorist attacks on American soil remained. "To say that danger is behind us is understandable, comforting ­ but false."

But the focus was on domestic initiatives, including moves to cut healthcare costs and expand coverage, and boost training programmes to help people find work.

"We have come through recession and terrorist attack and corporate scandals and the uncertainties of war. And because you acted to stimulate our economy with tax relief, this economy is strong and growing stronger."

Democrats were quick to take issue, noting that 2.3 million jobs have been lost during his presidency, that deficits are soaring and casualties are climbing in Iraq. Democrats sat silently through most of Bush's 54-minute speech while Republicans applauded repeatedly.

With a $500 billion budget deficit limiting his options, Mr Bush offered a handful of modest initiatives: a $23 million pilot plan to encourage student drug testing in public schools and a $300 million training and placement programme to help newly released prisoners find jobs.

He also stated his belief that marriage should be between a man and a woman ­ he said he would support a constitutional amendment banning same-sex marriages if the courts struck down a law saying marriage should be between a man and woman

But the buzz belonged to Mr Kerry, and his come-from-behind victory in Iowa. The Massachusetts senator won with 38 per cent of the vote, eclipsing former Governor Howard Dean of Vermont, who came an unexpectedly poor third with only 18 per cent.

Mr Dean, the former front-runner, is back to his previous role of underdog, and needs a strong performance in the next primary, in New Hampshire on 27 January. With the withdrawal of the former House Majority Leader Richard Gephardt, who won just 11 per cent, the main contenders are Mr Kerry, Mr Dean, retired General Wesley Clark, and Senator John Edwards of North Carolina, who finished second in Iowa with 32 per cent. A Washington Post-ABC News poll shows that while Mr Bush's overall approval ratings are a solid 58 per cent, a majority is more trusting of the Democrats on major domestic issues.