During World War II, director Frank Capra made a series of films called “Why We Fight” to educate Americans about the threat Japan and Germany posed. President Bush’s State of the Union address Tuesday night could also be titled “Why We Fight,” a reminder, four months after the attacks on America, of why most of the new spending in his budget will go to preventing more attacks, not to domestic goals such as expanding Medicare.  

 BUSH WILL SPEAK to a nation that seems prepared for a long and costly battle against terrorists. 

        In a new NBC News/Wall Street Journal poll, 64 percent of those interviewed agreed with the statement that “most of the military action that needs to be taken is still ahead of us,” while four out of five said it is likely that the United States will be attacked again by terrorists.
       
WAR TOPS OTHER PRIORITIES

       “There’s a war on and the president is determined to win it, and sees that far and away as the first responsibility of his office,” Bush’s budget director, Mitchell Daniels, said.
 
       Bush proposes to add $48 billion to the $328 billion defense budget, a 15 percent boost and the largest in 20 years.   
   
       The president will also ask Congress for $38 billion for domestic security programs next year, $10 billion of which is counted as part of the Pentagon’s budget. 

       If Congress agrees to these new outlays, military spending will amount to 3.6 percent of U.S. gross domestic product - still far less than the 9.2 percent of GDP that military spending reached during the Cold War standoff with the Soviet Union in 1962 and the 9.4 percent that military spending totaled during the Vietnam War in 1968.

       Bush is the wartime president of a nation that just a few months ago suffered the largest number of civilian casualties in its history. Bush has repeatedly reminded Americans that the struggle will take years and cost billions of dollars. Bush's request to increase U.S. defense spending is the largest in 20 years.

          And yet few American families are directly experiencing the cost of the war in the way Americans did during World War II.

       Then, Americans were living under wartime rationing, buying Victory Bonds to pay for the war, gathering scrap metal to be turned into weapons and planting 20 million Victory Gardens to help sustain the war effort. 

       Most every family had a father, husband or son in uniform. Between Pearl Harbor and V-J Day, more than 15 million Americans served in the armed forces. Today there are less than one-tenth that number of active-duty military personnel.

       As Bush will no doubt say in his address Tuesday night, the State of the Union is strong. 

       Despite the recession, America remains a wealthy nation. The federal budget deficits predicted for this year and next are, as Federal Reserve chairman Alan Greenspan reminded senators in testimony last week, quite small in relation to the size of the American economy, only 0.2 percent of GDP, which is far below the deficit levels of the 1980s.   

          Sitting in the House chamber Tuesday night listening to Bush’s speech will be congressional Democrats who’ll already have prepared their rebuttal. 

       They’ll insist that there ought to be enough money in the budget to allow for new domestic spending, such as an expansion of the Medicare program to pay for prescription drugs for all Americans over the age of 65. 

       Last year’s tax cuts should be rescinded to pay for such initiatives, some of them say.
       
REPEAL TAX CUTS

       “Can we afford to give seniors a prescription drug benefit, students a first-rate education, protect Social Security and Medicare, and fully fund homeland security, while giving away hundreds billions of dollars in tax cuts to the wealthiest Americans? Clearly not,” Rep. Jan Schakowsky, D-Ill., said.   
    
       But Democrats do not appear to have the votes to undo the tax cuts, leaving them to argue in this fall’s congressional campaign that Bush is neglecting domestic needs.
     
 As a short-term alternative to a full-fledged prescription drug benefit for everyone over age 65, Bush has proposed a Medicare prescription-discount card. 

       Some Americans say their families are prepared to make sacrifices to protect themselves.

       John Holthaus, a Louisville, Ky., systems analyst whose father is 75 years old, said, “Do you really think that my dad would rather have his prescription drugs paid for or would he rather have his grandkids safe? That is what the Democrats face. I would hope that all grandparents pick the safety of their grandkids over getting their free drugs.”
       
ENTITLEMENTS SQUEEZE

 The prescription drug issue is merely the tip of the iceberg.   

 Terrorists or no terrorists, Bush and Congress are caught in a long-term entitlements crisis. It will be interesting to see if Bush addresses it directly in Tuesday night’s speech or gives it a glancing aside. 

 The entitlements programs - principally Social Security, Medicare and Medicaid - keep growing inexorably every year, slowly squeezing out other domestic spending priorities.

 Entitlement spending now accounts for 48 percent of all federal spending, with other non-defense spending on things like national parks, meat inspection and transportation accounting for less than 20 percent.

 By 2011, entitlements will be 63 percent of all federal spending. 

       According to a new report by the Center for Strategic and International Studies, a Washington think tank, the United States and other industrialized countries face a crisis of too many retirees and too few workers to support them in the decades ahead.   
  
  The imbalance between workers and retirees could cause large increases in government debt “that could destabilize some currencies and financial markets” and force “large tax increases that would dampen economic growth,” the report says.

 Between 2010 and 2030, the number of elderly Americans will jump by 82 percent, while the working-age population will grow by just 5 percent. 

 Greenspan reminded the Senate Budget Committee of these somber realities in his testimony last week, saying the federal government faces $10 trillion in unfunded liabilities for the future costs of Medicare and Social Security.

 Prior to Sept. 11, Bush had launched two initiatives - seemingly unrelated - that would have addressed this long-term crisis.

 Bush was edging toward an accord with Mexican President Vicente Fox on a guest worker program that would have allowed Mexicans to work - and pay taxes - in the United States. 

 Over time this program would likely have led to some guest workers becoming permanent U.S. residents and citizens, boosting the size of the working-age population who will need to pay for the Medicare and Social Security benefits of the aging Baby Boomers.

 But any agreement on guest workers has been put off due to concerns about border security after the Sept 11 attacks. 
       
SOCIAL SECURITY OVERHAUL

       Bush’s other entitlements solution was to overhaul Social Security by allowing younger workers to put a portion of their payroll taxes into personal retirement accounts investing in stocks and bonds.  

       The Enron accounting fiasco, suggested Sen. Jon Corzine, D-N.J. last week, has created concerns about whether investors can trust the stocks they’re buying. 

       “This runs the risk of truly undermining business and consumer confidence,” Corzine said.

       Bush strategist Karl Rove insists that despite any Enron-engendered doubts, the president will keep pushing for Social Security overhaul.

 “This is a fundamental reform that is important to the country long term,” Rove told Tom Brokaw in last week’s NBC special “The Bush White House: The Real West Wing.” 

 While Bush may devote a few sentences to the need for Social Security reform in his State of the Union speech, congressional action on it - as well as the Mexican guest worker issue - will probably have to wait until the war against terrorism no longer dominates the national agenda.