For Immediate Release
January 31, 2006

Press Briefing by Dan Bartlett on the State of the Union Address
Room 450
Eisenhower Executive Office Building

      State of the Union 2006

2:30 P.M. EST

MR. BARTLETT: I don't know if we usually do a transcript of this, or not, but -- we do. This will be on the record, embargoed until the speech is delivered, because I'll be talking about specific elements of the speech to give you an opportunity to actually get ahead of the game as far as studying up and doing some homework so you can write eloquent, smart, interesting, accurate stories.

I'll start by just kind of -- make some broad observations about the speech, and then we can talk a little bit about specifics in the speech. I think the best way to describe this from a broad sense is that there's been a lot of reporting and speculation about this being more of a visionary speech, a philosophical speech, a directional speech, and I think those are all accurate descriptions. But to give it a little more specificity, there have been interesting developments, obviously, in the last few years with the conduct of the war, of the challenges we face overseas, also with a dynamic economy not only here in our country, but also vis-a-vis competition in the world, and it's this type of fast-paced change and difficult moments in the war that has, in some instances, left the American people with certain fears and anxieties, which is, I think -- can be described as natural when you look at the brutality of the enemy, when you see the types of tactics, brutal tactics being used on the battlefield, whether it be in Iraq or in Afghanistan or elsewhere -- when we see the likes of a bin Laden or a Zawahiri -- that it is a stark reminder that we're a country that still is under threat, that we are a nation at war.

It's also unsettling for the American people to grapple with the rising cost of energy, the rising cost of health care. The dynamic aspect of our economy where jobs are constantly being created and lost -- announcements from GM -- the rising competition of global players on the economic scene, such as China and India, all give a level of angst. And really what it comes down to is a question of what does America do about it? What is our position in the world? What is our position here at home? And the President has firmly rooted our cause both at home and abroad in aggressive American leadership in the world and here at home, in order to help protect the American people, and extend and expand our economic prosperity.

But there's been an interesting debate, and the debate has happened in our country at times before. There have been isolationist tendencies and there's been protectionist tendencies. That was acutely aware, if you think about it, on the economic scene this past summer with the debate about CAFTA. Here was an issue in which there was every reason for both to have a large margin of victory in the United States Congress because of not only the economic benefits to our country for CAFTA, but also the strategic foreign policy benefits of this. Yet, it only passed by one vote.

What I'm saying is, is that there are some currents that go on in our country from time to time, whether it be the tendencies of protectionism or isolationism, this debate whether we are stirring up problems overseas, if we were just to retract from the battlefield, if we weren't always provoking them, we would be safer. And that's a fundamental debate that's happening in our country. And the President has been talking about this, at least privately, with not only members of his staff, but other world leaders. And the question is whether -- he decided that he wanted to use this State of the Union as an opportunity to discuss this, and in a very extensive way. So in some respects, this State of the Union will be a bit different than past State of the Unions because it will discuss this kind of philosophical, directional debate underway.

Sometimes it's the underlying debate; it's not sometimes the explicit debate that's being had of isolationism or protectionism. But what the President will do is going to directly discuss this issue, confront it and make the case in the strongest terms possible as to why it's in the United States' interest to be actively engaged in the world, to continue to fight this war on offense, but not only in the context of the war, that we can't retreat from within our borders when it comes to other duties and responsibilities we have, like fighting HIV/AIDS on the continent of Africa, or malaria -- that we have a duty and responsibility and it's in our country's own interest to do so.

We also have a duty and a responsibility on the economic stage of America -- of the world to continue to maintain America's economic preeminence. And the only way to do that is to be robust in our agenda and -- as well as in our directional purpose, to maintain America's economic leadership in the world.

So he's going to talk specifically about these issues, about the war on terror. He'll begin the speech -- the speech is basically broke down into three major sections. The first section, talking about foreign policy, talking about the war on terror, talking about our country's history of advancing freedom and democracy. Some of it will sound familiar to you who follow him all the time. I promise there will be no Koizumi reference in the speech. (Laughter.) But beside that, it will sound very familiar in that respect, because it is a central aspect of America's foreign policy for good reason.

Q Why is he snubbing the Japanese? (Laughter.)

MR. BARTLETT: We're making all the bilateral contacts right now, to make sure to assuage them from any misinterpretation of an omission. (Laughter.) No. But like I said, it will be a robust defense of, and articulation of why our foreign policy and the security of the American people relies upon our government taking a very aggressive stand against the terrorists, but also a very principled stand for freedom and democracy.

And he will talk specifically. He will repeat what he said in the inauguration last year, of ending tyranny in the world. This is a very noble goal. Some have said it to be too idealistic. He will specifically address that issue as to why it's practical and it's in our interests.

He will talk about developments on the democracy agenda, talking specifically about the Middle East, talking about the situation with the election of -- in which Hamas had done so well recently in the Palestinian Territories. He will talk about -- at length, obviously, about developments in Iraq, our strategy in Iraq and what we're doing to prevail in Iraq. He will also mention other issues on the democracy agenda, including Egypt and Saudi Arabia. Those are all very important aspects of the democracy agenda, and he will speak to them.

One point he will make very clear is that elections are not the end of the experiment of democracy, and in many respects it's the beginning. It's the real institution building that has to go hand-in-hand with elections that is critical to build the types of enduring institutions to ensure that the election is not just that, the end all, be all; it is the beginning. And he's going to be very clear about that.

As I said, he will talk specifically about not only what's going on in Iraq specifically, in the broader Middle East and other foreign policy matters, as I just said. If America were to look inward and withdraw from the world, it has serious consequences for millions upon millions of people throughout the world who turn to the United States of America for moral and direct assistance, like I said, on AIDS and HIV -- HIV/AIDS, as well as malaria and other issues. So the President will call on Congress to continue to meet our commitments when it comes to helping those who need -- who are in the most desperate need of help.

He will also, on the foreign policy side, talk about the aggressive steps, the necessary steps we're taking here at home to protect our country. There's a debate that is front and center, both on the Patriot Act and other aspects of what we're doing to protect the American people, and he will be very explicit, as you've heard recently, about the necessity for the actions we are taking, including the terrorist surveillance program, and the reauthorization of the Patriot Act. So that will be a key aspect.

One thing -- I do want to digress for a second to talk about an overall theme before I get into more specifics, and that is -- and you've heard the President, he mentioned it yesterday in the Cabinet meeting, he's mentioned it in some recent interviews -- and that is, part of, I think, the dissatisfaction with what's going on in Washington, D.C. is coupled with the fact that the divisive tone, the partisan atmosphere that is taking root here, and some have -- observers have said it's the worst it's ever been, or it's the worst it's been in recent memory -- and the President has been very forthright in saying it's probably one of his biggest disappointments since he's been President. Those who have chronicled his political history, he has been somebody who has had success in the past, both in Texas and in the early days of his administration here, of bringing Republicans and Democrats together.

Tonight, I think on more than one occasion, you will see the President calling on the Congress to come together, that he will do his part to elevate the tone in Washington, that he understands he plays a role in this. He's not going to be just pointing fingers at them to do it, he will say, collectively. I think there will be specific initiatives that the President will outline that clearly transcend the traditional partisan politics and can be the type of issues that can bring Republicans and Democrats together, particularly on the war. As the President has made clear, both in recent speeches in December, as well as meetings he's been conducting with both Democrats and Republicans on the Foreign Relations Committee, former Secretaries of Defense and State, that whatever our differences in the past may have been on Iraq, everybody can recognize the importance of winning now. He will reiterate that call. The fact of the matter is, is that the type of struggle we are in against a determined enemy will require both Republicans and Democrats in Congress to work together to ensure the security of our country.

He will also talk about -- as I said, there will be some domestic initiatives. And, really, I believe, as a turn to the domestic side, one of the cornerstones of this speech will be a new American competitive initiative that the President will outline tonight. As I discussed, America's preeminence in the world economy is unquestioned, but that does not mean we should become complacent. And there has been a lot of interesting research and commentary in recent -- in the past year. The National Academy of Sciences, others, have looked at America's competitiveness and had kind of put some of the warning signals on the dashboard of the future of our economy when it comes to ensuring that we continue to be the leading innovator in the world.

It's really what has made us, our economy the envy of the world, is because we are still the best place in the world to do business. The best, brightest minds in the world come to America. We have the most universities. We have -- the cutting-edge research that is being done is being done in America. It's because we have a climate, an environment and a workforce to do it better than anybody else in the world.

But that's not going to stay the same if we do not take aggressive steps to maintain our economic leadership in the world. The President will acknowledge the fact that rising economic competitors, like China and India, is something that we have to recognize and address. The math and science scores, for example, of our children is something that we have to be worried about when you do international comparisons. So what the President will outline is a specific proposal of this American competitive initiative that is essentially to double basic research in the physical sciences over the next 10 years. We will have specific -- he will call for the permanent placement of the R&D tax credit as, again, so it will both be a federal commitment and a private commitment in basic research to continue to innovate and make sure that we are one of the technological leaders in the world.

It is something that's critically important and, as I said also, there was a specific concern about math and science scores. The President will build on the success of No Child Left Behind and propose 70,000 high school teachers to lead -- to train 70,000 high school teachers to lead advance placement courses in math and science. We'll bring 30,000 math and science professionals to teach in classrooms and give early help to students who struggle in math so they have a better chance at good high-wage paying jobs.

So this is a three-pronged approach, doubling the federal commitment to the most critical basic research programs in the physical sciences over the next 10 years. It is making permanent the R&D tax credit that demonstrates both a federal commitment and a private commitment to basic research, as well as having a very robust initiative that tackles one of the long-term concerns that are in a knowledge-based economy in which more and more of the physical barriers of competition have been lowered through the Internet and other aspects of our technology -- is that it's the skills of our people that are critical to our economic competitiveness in the future, so the math and science initiative will be a critical part of that.

But the question really is, are there certain national goals or national priorities that can also lend impetus to these efforts. And in this way, the President is going to be very clear and probably as blunt as he has ever been about America's addiction to oil. And he will be that clear when he says it, that America is addicted to oil, and that it requires us to do something, obviously, about it. And what he is going to talk about specifically is really what has been recent developments in the type of research that will really be game changers in the near future when it comes to the automobile, when it comes to how our automobiles are powered. I mean, it really is -- I think there's -- somebody will correct me if I'm wrong, but 75 percent, I think, of all the oil production goes directly to powering automobiles. It is the elephant in the room when it comes to the energy issue.

Now, the President will talk about how we power our homes and our businesses. He'll talk about the need for safe, clean, reliable nuclear energy. He'll talk about solar power. He'll talk about other aspects -- clean coal technology -- that we take seriously that part of the energy issue. But on the automobile issue, he's going to be talking specifically about cutting-edge research. Particularly when it comes to what has been getting more and more attention in trade publications and elsewhere is ethanol. And it's not ethanol the way we typically talk about it during a Iowa primary of corn-based ethanol, it is -- talk about is cellulosic ethanol, which as some of you who traveled with the President down to Brazil, there are some interesting things going down -- going on down there, in which a big part of their fuel mix comes from sugar cane. There's actually some really interesting technology that says we can convert wood chips, weeds, grass and other refuse into fuel.

To the extent with some specific -- a 22-percent increase, which the President will propose tonight, in specific type of alternative energy research, that we can really make a breakthrough in which we can bring these types of technologies to the forefront.

So the question is, what does that mean in a goal-oriented way. And the President will make very clear that we can bring this type of technology, to make the kind of ethanol practical and competitive within six years, which means, that coupled with some other new technologies, that we can replace more than 75 percent of our oil imports from the Middle East by 2025. So that really is a game changer when it comes to our reliance upon foreign sources of oil, particularly if you'd save from the Middle East, the equivalent of what would come from the Middle East.

So the question is, why 2025; what takes so long, couldn't you spend more money? The fact of the matter is, is that we have a fleet that's already in use. We have 200 million cars already on America's roads, and it does take time -- the technology gets available in the next six years. In order then for the marketplace to take root and then really become a massive-scale change -- people can't afford to buy a new car, they -- as many, probably, here drive your car until it doesn't drive anymore. There's about 200 million people who have that challenge. Not everybody has the specific challenge of that, but the bottom line is that it will take time to change it. But with this aggressive goal, with some aggressive research, built upon $10 billion in increases in federal research that we've done in the last five years, we do believe we're on the cusp of something really different when it comes to dealing once and for all for our dependence upon foreign sources of oil.

So these two initiatives, these two aspects I think really will serve as some of the keystone aspects of the President's domestic agenda.

Now, you've heard a lot of talk about, and also will be something very important to the President, and also, quite frankly, has issues of competitiveness, is the issue of health care. And the President, as you have already been reporting about, will discuss health care. He will talk about the fundamental unfairness in our system right now in health care, where big businesses are treated one way, but individuals and small businesses are treated another way when it comes to tax policy, as well as other types of advantages they get through regulations.

And what this will do is take the -- and particularly the vehicle that has become so promising out of the wake of the Medicare legislation is health savings accounts. We now have it to where about 3 million Americans have health savings accounts. But what we've learned from many people who have them is that they're still not getting the same type of advantages or tax breaks that the big companies are getting. We believe that there could be an explosion within the small business community of offering these types of health savings accounts if we leveled the playing field between small businesses and big businesses.

Other aspects of maintaining -- or in controlling costs of health care has to rely upon the -- continue revolutionizing the information technology of the industry. It's quite amazing to say that in an area where there is such incredible technology used in the actual application of care -- we all have seen it, the CAT scans and these things -- but the actual industry, itself, lags way behind many other industries when it comes to -- as we all know, when your doctor scribbles out his prescription and nobody can read it -- well, that has inefficiencies throughout the system when one set of doctors can't talk to another set of doctors, everybody carries around their medical records. There are estimates that say you can cut costs in medical care costs up to 25 percent through information technology. The President is going to talk about that.

And then, lastly, the pervasive intrusion of junk and frivolous lawsuits are something that continues to clog our courts and make it difficult for doctors to do their job. The President will particularly highlight the acute issue of OB/GYNs and the lack of access to OB/GYNs in more than 1,500 counties throughout America. This is an important issue, and it's something that the President will reiterate his support for in this speech.

Some other things -- I'm going to preempt the questions. What about Social Security, Dan? Is the President going to talk about Social Security? Yes, he will. He will acknowledge the fact that the Congress did not get it done. But this is one of the areas where the President is going to, again, demonstrate that this is a problem that should bring Republicans and Democrats together. And what he's going to do is broaden the debate. This is not just about Social Security. It is about a generational commitment our country has made that we have to live up to.

The baby boomer generation, his generation, are soon going to retire, and it's going to have an enormous impact on three programs: Social Security, Medicare and Medicaid. And analysts from both the left and the right will tell you that there is a problem. And this is something that the President obviously has contributed to the debate last year. We did not get the resolution we wanted in the Social Security debate, but what we did do is put on the forefront the issue of the problem that Social Security faces.

What the President is going to ask here is for the creation of a commission that will take on all three of these issues -- the baby boomer generational issues on all -- and the impact they have on all three programs.

So you ask the question, well, what's different about this, Dan, than the other commission you did? Well, the one we did earlier was an executive branch commission. He will specifically ask for a joint commission that could even contemplate having members of Congress on the commission, both Republican and Democrat. So this is the President's acknowledgment that this needs to be above partisan politics; we need to bring both Republicans and Democrats, sitting members of Congress, to the table. He will work -- he will not announce the formation of the commission, but he will pledge and call on Congress to work with him to come up with a bipartisan executive congressional commission that can take on these three big issues as they relate to the baby boomer generation. So that is something specific that he will talk about here.

There are other important issues in here that we'll talk about. I want to get to your questions. Macroeconomic policy: The President will obviously talk about tax policy, spending policy. He'll talk about that he's glad that the Congress is taking on the issue of earmark reform. He will ask the Congress for the authority for line-item veto. These are important ways in which they can demonstrate, and we can demonstrate collectively, that in Washington, D.C. we take seriously our jobs of being good stewards of the taxpayer dollars.

He will talk about immigration, another critically important issue both to our economy and to the character of our country. He will talk comprehensively about it, both border security and a humane guest worker program that brings rationality to our system that is totally irrational right now.

So as I said -- maybe I didn't say. I said three sections to the speech, but I think I rattled off foreign policy, the domestic section of this speech -- and that is really where we'll be talking about the competitive initiative, energy, health care and those things -- tax policy.

And the last one has been -- the President has always been very mindful that the true nature of our country is not gauged by our wealth, but by the character of our nation. And he will talk about what he will call a quiet transformation that is taking place throughout our country. The fact of the matter is, violent crime is down enormously; welfare cases are down; abortions are down; out-of-wedlock births are down. This is a quiet transformation, and government has played a role over the years. He is not going to take specific credit -- in fact, he's going to go out of his way to say both Republicans and Democrats can take credit for this transformation that is taking place, because there has been a role -- through abstinence programs, welfare reform and other aspects of social policy -- that has helped. But in a large part, though, this has been a personal transformation of people becoming more accountable. And it's something that is important, but there are areas in which we can build upon that.

The President will talk about a -- we can now see, for example, on the issue of domestic AIDS here in America, that we can see a day where there are no new infections of AIDS if we put forward the right resources and strategies. The President is going to talk about that.

So as we have in every State of the Union speech, and what will always be a cornerstone of this President's presidency is the compassion agenda and what we're doing. And that will obviously -- will also be what we're doing to help the citizens of the Gulf Coast, and what our strategy is to continue to make sure that we make the type of federal commitment and have the right partnership with our local partners to make sure that the people in the Gulf Coast recover.

With that -- yes.

Q Dan, 70,000 teachers -- are they new teachers, or existing?

MR. BARTLETT: New.

Q Okay. That will be funded out of the Department of Education?

MR. BARTLETT: Yes, sir.

Q And, also, just to double-check, the program on ethanol you're saying would reduce Middle East oil --

MR. BARTLETT: It would --

Q -- could reduce, and that's just Middle East oil, right?

MR. BARTLETT: Correct -- 75 percent of our imports that would come from the Middle East, yes.

Q Seventy-five percent?

MR. BARTLETT: Seventy-five.

Q Dan, on foreign policy, can you just talk about Iran a little bit?

MR. BARTLETT: Yes. Sorry for the omission. I did mention the fact the President will discuss very clearly that there are some -- the international community has made very clear to the Iranian government that any ambition for a nuclear weapon cannot be tolerated. And he'll continue to talk about how we will rally the free world to make clear those -- of that bright line.

He will also -- and I think it's very important, and what you'll see in this speech, is that this government and other governments, whether it be European governments, have made very clear that our beef is with the government, not with the people of Iran. And the President will speak directly to the people of Iran to make that very point, that he understands their aspirations, he understands what they want, and that he hopes for a day in which our government can be -- have closest relations with the people of Iran; that our concerns, our deep reservations and our critical concerns from the point of national security has to do with those who control the government. So there will be a specific discussion about that.

Q Time goal for excerpts?

MR. BARTLETT: At 5:00 p.m.

Q Text?

MR. BARTLETT: An hour before -- 8:00 p.m.

Q On the teachers -- 70,000 advanced placement teachers?

MR. BARTLETT: Yes.

Q Is it AP you're talking about?

MR. BARTLETT: Seventy thousand teachers who are -- hold on, just to make sure I get it right -- to train 70,000 high school teachers to lead advanced placement courses in math and science. And there will be -- and then we're also going to try to recruit 30,000 math and science professionals, people who are engineers and scientists, to work in the classroom. These have been some of the recommendations that have been out there -- Lamar Alexander, Pete Domenici, some others have been talking about.

Q -- through the Department of --

MR. BARTLETT: We'll work through the Department of Education scholarship -- and programs that will help recruit scientists and engineers to come work in classrooms.

Q All government pay, or will that --

MR. BARTLETT: Well, we'll put out a fact sheet tonight that will have all this information on it. So I don't want to butcher it from here.

Q How much would it cost?

MR. BARTLETT: The total initiative is a $50-billion commitment over 10 years for all elements of this plan.*

Q Do you have a total cost estimate for all the initiatives that the President will lay out, either with or without the tax --

MR. BARTLETT: I don't have it on the top of my head. We can get that to you by tonight.

Q Any recognition of Katrina in the speech?

MR. BARTLETT: Yes, a lengthy recognition of the duty we have to help the people of the Gulf Coast, quite frankly, not only to recover, but to address some of the underlying problems that were there before the storm even hit, to make sure that we build back better schools, provide better economic opportunity to the region. This will be something that will be very specific and very -- and a direct commitment by the President yet again.

Q But when you say the "issues prior to," what are you specifically discussing?

MR. BARTLETT: Again, that we shouldn't have been satisfied with the state of education, for example. If you look at New Orleans, if you look at some of the highest poverty and unemployment rates persistent in parts of Louisiana, for example, and Mississippi, and it's critically important that we have strategies and we rebuild, we rebuild better, and make it more hopeful and have better opportunities.

A lot of those we'll be working hand-in-hand with local governments. They are the ones who are creating the vision. In many respects, we'll be helping fund that vision. But it's critically important that we just not build it back the way it was. We've got to build it back to make it better.

Q What about Katrina? Is he going to say anything about another supplemental? Does he support another supplemental? And is he going to announce any new initiatives? Or is he just going to talk about money that's already been appropriated?

MR. BARTLETT: Well, we do have a budget coming out, and the federal commitment to the Gulf Coast is already to the tune of $85 billion. We are working on supplementals, as well as the budget process, itself. It will be very clear, not only tonight, but in the days and weeks to come, the federal government's commitment to helping the people of the Gulf Coast.

Q How much is that supplemental, how much is that?

MR. BARTLETT: I can't tell you that today.

Q Dan, is he going to make any specific reference to the lobbying -- Abramoff?

MR. BARTLETT: Well, he'll definitely make clear that we all have a duty in Washington, D.C. to live up to the oaths of office, that we all -- and he will definitely endorse the reform movement that is happening in Congress. He's not going to lay out a specific plan, but pledge to work with the Congress to enact reforms when it comes to lobbying, yes.

Q Dan, what happened to hydrogen cars? And also, how far along is the President in his thinking about civilian reprocessing?

MR. BARTLETT: I'm glad you raised both those issues, because I would be remiss if I didn't mention the fact that he will talk about hydrogen cars. We actually have seen promising -- the President laid out his vision on this. This is a much longer-term vision. The cellulosic ethanol that I talked about is something that is more on the cusp. But we're going to accelerate some of our funding into hydrogen research, so it is still a critical aspect of our long-term future of energy independence. And he will talk about that specifically.

The reprocessing issue you talked about is one that has been discussed in some newspapers and elsewhere about discussions our administration is having about creating an international framework in which we can deal with the rapid expansion of nuclear energy, whether it be in Asia or other parts of the world, and, hopefully, here at home. And the question really is, is the reprocessing issue -- how can we set up an international regime in which we can be confident; and how that technology -- who has access to that technology; and then what you do with the spent fuel.

The President will not discuss this specific initiative in the State of the Union tonight, but it is something that is being actively worked. And it's interesting, if you want to know -- some of you who follow the issue with Iran more closely -- a microcosm of this issue on a more global scale is the issue with Iran. The President, as you know, has endorsed a proposal put forward by the Russians to have the fuel cycle take place outside of Iran; that they supply them so they can have a civilian nuclear energy program, take the spent fuel out to make sure that there is no proliferation issues. And in a nutshell, that is really kind of a -- if people are trying to get an understanding of what -- the broader global initiative we're talking about, that really is what it is on a much more specific instance.

But the question is, host countries, countries who have ambitions to have nuclear energy -- India, for example, others -- and the question is what type of international regime can we set up to accommodate that and it's something we're actively working on.

Q -- there's money in the budget, a small amount of money?

MR. BARTLETT: There is money in the budget, and we'll be talking about that in the coming days and weeks.

Q How much?

MR. BARTLETT: I don't have a specific number for you tonight.

Q Dan, we've been told there's no planned mention of Coretta Scott King. Is that still the plan? And if it is the plan, why is -- does that administration consider that inappropriate in the State of the Union address?

MR. BARTLETT: You need better sources, Ken. (Laughter.)

Q Can you elaborate, though?

MR. BARTLETT: You'll be there to cover it.

Q Well, this is embargoed and just for planning purposes, will there be a mention?

MR. BARTLETT: Yes.

Q Is that a change in plans, or did someone just tell me wrong?

MR. BARTLETT: Like I said, I don't --

Q Let's see if he's here. (Laughter.)

Q Are you saying that he will mention Coretta Scott King? Are you saying that he will mention Coretta Scott King?

MR. BARTLETT: Yes.

Q -- addiction to cars. You've outlined some technological --

MR. BARTLETT: Addiction to oil.

Q To oil.

MR. BARTLETT: Not addiction to cars.

Q Will there be any discussion of driving less?

MR. BARTLETT: Well, we've talked about conservation efforts. And, in fact, key aspects of the energy bill that was passed this past year have many incentives for conservation, and also have incentives, tax incentives, for the purchase of hybrid vehicles, for example. There has been probably the biggest incentive for people to drive less, and that is the fact that oil is as expensive as it is today. And it's had a direct impact on the driving habits of the American people.

But the fact of the matter is, the way we're going to solve this issue over the long run, is going to be through the harnessing of technology and the rapid development and deployment of technology. Many people don't -- I didn't realize until looking at this issue that automakers are already creating -- have already created 4.6 million cars on the roads today that can accommodate flex fuels, for example, this ethanol-based gas fuel system. In order for them to ramp that -- and GM is doing over a half-million cars this year, and Ford has committed to overturn 50,000 flex fuel cars. This is what's going to revolutionize the debate on energy and automobile use. And the President's agenda and the President's specific proposal will help accelerate that dramatically.

Q Dan, the 75 percent goal on Middle East oil, can you get that strictly from this flex fuel stuff you're talking about?

MR. BARTLETT: Like I said, it's a combination of the ethanol research we're doing, as well as other aspects of technology. He will get into a little bit of it --

Q Does it include ANWR?

MR. BARTLETT: No, not in that analysis, no.

Q What about CAFE standards?

MR. BARTLETT: Well, we have always supported and will continue to advance CAFE reform, but that is not a part of our equation on this conclusion.

Q What are the other things that you're talking about?

MR. BARTLETT: Well, we'll have specifics that we'll roll out later on that.

Q Can you also translate -- 75 percent Mid-East oil -- what percentage of our imported oil is that?

MR. BARTLETT: Say that again?

Q You say it could reduce our dependence on Middle East oil by 75 percent. Can you provide -- what does that mean in terms of reducing our dependence on foreign oil? Because we don't get that as much from the Middle East anymore.

MR. BARTLETT: Well, I think one of the biggest concerns the American people have is oil coming from the Middle East -- is a very volatile region in the world. There are other volatile regions --

Q The whole pie -- how much of it --

MR. BARTLETT: I'll have to get you the -- I don't have that on the top of my -- but there was another aspect of your question?

Q Yes, it was, what else does it --

MR. BARTLETT: Well, one part that I forgot on the automobile aspect of it, the other promising research that I haven't -- the technology I haven't talked about is new batteries that will make hybrids and plug-ins a reality. The problem has been in the past that the batteries have been too big and they haven't held power long enough. But the type of research that has gone into our cell phones and other things, lithium batteries are really on a fast pace to becoming revolutionized in which they can afford a car to go up to 60 or 90 miles clearly on just electrical power. They're plug-in -- been a lot of recent coverage of this. We will advance funding in the area of lithium battery research, as well. So that's another one of the technologies that helps us come to the conclusion of 75 -- the 75 percent figure.

Q Dan, anything on tax code reform? That was pretty prominent last year. Tax code reform?

MR. BARTLETT: Well, the best reform we can do is make the tax cuts permanent, as the President will argue tonight. We don't want a temporary expansion, so we shouldn't have a temporary tax cut, we should make it permanent. We will continue to discuss the issue of broader tax reform with the Congress, but that is not something that will be detailed in this speech.

Q On health savings accounts, it's been argued that if you really want to help those that can least afford health insurance that you should probably instead propose some form of tax credit that's inversely proportionate to income. And I just wondered why the White House doesn't approach this problem in that way.

MR. BARTLETT: We do have -- my understanding is we do have -- have proposed in four budgets in a row a tax credit for low-income Americans that addresses that very specific issue. It's been something that the Congress has had different ideas about. We continue to think that is an important policy. The President will also make clear that the federal government has a commitment to the poor and to the elderly when it comes to health care, and we're going to live up to that commitment. But we have other ways that we can tackle the rising costs of health care, strengthen the doctor-patient relationship, and he'll talk at length about those things.

Q What about tax deductibility for health care expenses? Is that an idea that's kind of off the table now?

MR. BARTLETT: No, that's exactly -- that's what I'm talking about, as far as, if you own a health savings account, we're going to allow you to completely writr off tax cuts -- I think what's been speculated in the press is that if you're in a health savings account, you will get that tax deductibility. So it is a part of the program if you're a part of a health savings account.

Q Have you got a cost projection on that, Dan?

MR. BARTLETT: We do have one; I don't have one. We'll have, like I said, fact sheets. We'll have -- all those things will come out in regular order and will come out in advance of the speech, so everybody will be able to do all that.

Q Is the President going to announce any breakthrough in illegal immigration, which is on the rise? And there are -- millions are not captured, and they are under the table -- they are living under the table. So to make them come out and pay taxes and the economy --

MR. BARTLETT: He will definitely talk about the issue of immigration and why we need comprehensive reform. And he will also acknowledge the fact that there are some that claim that immigrants are somehow bad for our economy, even though the economy couldn't function without them. He will almost say it explicitly like that. And so he acknowledges the reality of where we face on the immigration issue. He'll make very clear that we have a responsibility to enforce our borders, but he's also going to, again, make the case that in order to take pressure off the borders and have a rational system for not only employers, but also for the people who are coming here, is to have a humane guest worker program.

Q Any breakthroughs tonight?

MR. BARTLETT: Well, he's going to call on Congress to do it. There was action both in the House and the Senate, and we do believe this is the year that we should act.

Q Will he talk about plans for a troop drawdown in Iraq, go any further --

MR. BARTLETT: He'll talk about why he's optimistic this year that there can be troop drawdowns. There already has been some announced on Christmas Eve by Secretary Rumsfeld and General Casey. But he will also make very clear that the conditions for it will be just that, conditions on the ground and commanders on the ground, based on their assessments of developments in Iraq. So he will say that -- he will argue, as most Americans do, that they want -- he wants the troops to come home, but he wants them to come home with victory.

Q Can you tell me the importance of this year's speech before midterm elections?

MR. BARTLETT: Well, I think it is a midterm election, obviously, and it's -- like I commented earlier, that there is a -- already a kind of atmosphere of high partisanship with the nomination process and these things, which the President will recognize -- we hope, to be the two new justices who will be in attendance, Justice Alito and Chief Justice Roberts.

But I think what the President will argue in this speech is that the issues before our country are bigger than politics, and both Republicans and Democrats should be able to come together. Those of you who have talked to Ken Mehlman and others, we've already said good policy makes good politics, and we stand by that. And a bold, aggressive, optimistic agenda will be one that both Republicans and Democrats can come together on. And it's also one in which the President, as the head of his party, will be able to articulate next fall in a way that can help maintain our control of the Congress.

Q Can you preview the guests?

Q On the oil program, to what extent were energy companies and lobbyists involved in the planning of the oil use reduction?

MR. BARTLETT: The oil -- who, the lobbyists?

Q I'm just wondering about energy companies. There have been questions in the past about discussions with energy lobbyists. I was wondering, as you all prepared this policy that you're going to announce tonight, to what extent --

MR. BARTLETT: Well, for example, to get information about what automakers are doing, we've obviously talked to automakers about flex fuels and those things we're doing. A lot of the development of this policy, my understanding, and I don't have all aspects of it, is that the thrust of this plan is government-backed research that is taking place as we speak. So a lot of the discussions were with scientists and others at the Department of Energy, at Department of Commerce. The main areas of plus-ups in some of these programs were with the National Science Foundation; NIST, which is over at Commerce, as well as the innovation division at the Department of Energy. So most of -- my understanding of the development of this policy has been done through the scientific experts internally.

Now, there have been -- for example, this Fortune Magazine story, the most recent cover of Fortune talking about how to beat the high cost of gasoline: Stop dreaming about hydrogen. We're not dreaming. We're funding it. But ethanol is the answer to the energy dilemma. And there's -- it talks a lot about venture capital and where the money is being invested in the private sector. And I know that we've talked to a lot of people who are doing investing in this area, as well. But I don't know specifically on that part of your question.

Q Do you expect any legislation to come out of --

MR. BARTLETT: One more after this, and that's it.

Q Do you expect any legislation to come out of that entitlement commission you're talking about? And what is the rationale, given these are three very complicated issues and we know the Tax Reform Commission's recommendations have been delayed and other blue ribbon panel recommendations in --

MR. BARTLETT: I think it's the very enormity of the problem that requires a legitimately and substantively vigorous research into it, and also requires to have the stakeholders -- i.e., Congress -- invested in it. And that is how this commission will be different than those is that we will even contemplate sitting members of Congress in both parties serving on it.

Q Can I follow up on that?

MR. BARTLETT: Last question. I just saw your hand --

Q Yes. I was just wondering, can you give any estimation on how much money this research on energy will cost?

MR. BARTLETT: The research -- well, the --

Q -- the information before with the --

MR. BARTLETT: We'll have, like I said, in the vital areas of energy research that we're increasing, it's a 23-percent increase. But I'll get you the baselines on those later today.

Q -- 22 or 23?

MR. BARTLETT: Did I say 22 earlier?

Q Yes.

MR. BARTLETT: I've got to get my act together.

Q Is it already that much more expensive? (Laughter.)

MR. BARTLETT: I've got to get off the podium. Josh is going to be mad. Twenty-two. I'm sorry, 22 percent increase.

Thank you, everyone.

END 3:17 P.M. EST

* The American Competitiveness Initiative is a $50-billion commitment over 10 years for the doubling of our federal R&D in the physical sciences, and with making the R&D tax credit permanent and other components represents $136 billion over the next ten years for all elements of this plan.