Bush takes the moral high ground as rivals slug it out

In a calculated bid to steal the Democrats' thunder, President Bush will deliver a State of the Union address tonight depicting himself as a statesman and setting out the main themes of his 2004 re-election campaign.

The hour-long speech is unlikely to broach much new ground. Instead, it will seek to present the President as a proven, unifying leader, in contrast to the eight Democrats jostling to replace him, fresh from their fierce and divisive battle at the Iowa caucuses.

As White House officials privately admit, tonight's date was carefully picked, giving the President an uninterrupted hour of network prime time to get across his case, stressing an optimistic, positive agenda - in sharp contrast with the Democratic candidates who have been heaping abuse on him and each other in almost equal measure.

In his speech, Mr Bush will not dwell on the embarrassing failure to find Iraq's alleged weapons of mass destruction, the prime justification for last March's invasion - and with good reason. To do so would only be a reminder that assertions in the 2003 State of the Union address, that Saddam posed a "serious and mounting threat" to the US, and the infamous 16 words claiming he had been trying to buy uranium from Africa to build a nuclear weapon, have been totally disproved by subsequent events.

Instead, the President will point to the capture of Saddam Hussein, and to Libya's decision to give up its own WMD programme, as proof that the decision to invade was correct, and worth the 500 US soldiers' lives that have been lost so far.

In another effort to play up his national security credentials - which Republicans regard as his trump card for re-election in November - Mr Bush will also claim significant successes in the war against terror.

But the bulk of the address will deal with economic themes. Insisting that recovery is now well under way, he is expected to make specific proposals on health care and for a part-privatisation of social security, an issue that figured prominently in his 2000 White House campaign. Under the Bush plan, workers would be allowed to invest in the stock market some of the social security taxes they currently pay.

On health care, the speech will contain proposals to broaden coverage, and reduce costs - now running at an unprecedented 15 per cent of GDP. But with the federal deficit at its own record of some $500bn (£280bn) or 5 per cent of GDP, there is scant money available to fund large new initiatives.

Publicly, the White House insists Mr Bush will not be holding any gala rally formally launching his re-election campaign. To all intents and purposes, however, that campaign has long since started.

The government is quietly launching programmes to help Mr Bush in key states, including an animal research laboratory in Iowa and financial help for orange-growers in Florida, two states decided by a whisker in 2000.

Hours after delivering the State of the Union, the President leaves Washington tomorrow for campaign-style visits to Ohio, New Mexico and Arizona, three states up for grabs in the general election.

Republicans hope to snatch New Mexico, which Al Gore very narrowly carried in 2000. In Ohio, a traditional swing state won by Mr Bush four years ago, the downturn in the traditional manufacturing economy has given Democrats new hope of victory. A fast-growing Hispanic population meanwhile has made traditionally Republican Arizona a much less safe bet than in the past.

For the Democrats the primaries are the focus. After their fluctuating and draining struggle in Iowa, the candidates headed to New Hampshire for a week of campaigning before the 27 January primary.

None of them is wasting any time. After his late surge in the polls in Iowa, John Kerry scheduled a 7am arrival rally at Manchester, New Hampshire - even though he reportedly had lost his voice yesterday after a fortnight of relentless 18-hours-a-day campaigning.