By Kelly O'Donnell Capitol Hill Correspondent
NBC News
updated 12/20/2006 2:56:23 PM ET 2006-12-20T19:56:23
LOOKING BACK, LOOKING FORWARD

WASHINGTON — Just as it dominated the headlines in 2006, the war in Iraq dominated the Bush administration.

The war and all of its various corollaries seeped through the White House — from the shake-up inside the administration to the obvious voter discontent that resulted in the Republican “thumping” during the midterm election.

Will the war continue to shape Bush’s agenda in 2007? Or will the public’s dissatisfaction with it speed up the “lame duck” syndrome that plagues so many presidents in their second term?

The year that was: 2006

Iraq
During 2006, no other issue defined President Bush — his leadership and ultimately his legacy —more than the war in Iraq. Public support eroded and the president’s approval rating fell and remained at dismal lows. The president attempted to reignite popular backing of his Iraq strategy with carefully rolled-out public relations offensives in March, a surprise visit to Baghdad in July and another major speech in September. 

President Bush began to acknowledge mistakes, frustration and dissatisfaction with the pace of progress. The president gave up on his “stay the course” rhetoric and argued that he was in fact adjusting tactics. He rejected calls for a troop withdrawal and remains committed to staying in Iraq.

Government secrets revealed
One of the president’s secret programs made big news when it was leaked to the New York Times. The National Security Agency had been conducting wiretaps inside the U.S. without court approval. The president argued he had legal authority even though Congress had not passed a specific law. 

The administration gave the operation the name “terrorist surveillance program” in an effort to increase public support and reduce fears that the government was spying on ordinary citizens.  Critics expressed concern about the civil liberties and questioned whether the president went beyond the powers of the executive branch.

Another big secret was disclosed when the president announced that the CIA had been holding detainees in secret prisons around the world and subjecting them to alternative interrogation methods. Bush said that the detainees included some of the most serious terror suspects. The president insisted the suspects were not tortured and claimed that the interrogations produced valuable intelligence. Critics claimed the U.S. was losing its moral standing and some argued that techniques used did not conform to the Geneva Conventions.

Administration shake-up
Bush places a high premium on personal loyalty and so it was notable that he yielded to pressure from within his own party and beyond to make changes in his inner circle. Early in the year, a frequent complaint was that the White House had been slow to act and sometimes out of touch on issues like Hurricane Katrina and blind to opposition to the Dubai Ports deal.  

First to go was chief of staff Andrew Card, who had served since day one. Next, press secretary Scott McClellan was replaced. Treasury Secretary John Snow left. But it took several more months and a midterm election “thumping” before the president decided Secretary of Defense Donald Rumsfeld’s time was over.

Nuclear threats
Four years after the president first called Iran and North Korea members of an “axis of evil,” both nations made threatening moves and provoked the world. North Korean’s repeated nuclear test firing and Iran’s refusal to stop uranium enrichment both presented foreign policy challenges and both rebuffed Bush.

GOP discontent
Bush can no longer count on his party to back his policy. This year Republicans began to voice opposition and dissatisfaction with the handling of the war. Then Republicans in Congress abandoned the president over immigration reform by rejecting his effort to create a guest worker program. And conservatives argued the administration had not exerted enough fiscal control.

Bush’s party also refused to pass the administration approved Dubai Ports deal that would have sold control of operations at several U.S. ports to a friendly Middle East nation, United Arab Emirates. To add insult to injury, during the election season, many Republicans running for office distanced themselves from the president.

What to watch in 2007?

Iraq
The president promises to announce what the administration calls “a new way forward for Iraq” in January. The president will lay out in another major speech a course correction and revised policy. The updated plan is intended to involve military, political and economic components that the White House hopes will support the Iraqi government and reduce sectarian violence.

Events on the ground will continue to shape how the administration is judged. Robert Gates, the new secretary of defense, and perhaps other new faces will be tested to produce improved results. The desire of many Americans to see soldiers begin to come home is not likely to wane.

Divided power
The president will for the first time in his tenure have to deal with a Congress run by Democrats. That shift in power will subject the administration to new investigations and likely more oversight. The president may be able to revive his legislative efforts on immigration where he may now find more common ground. 

War on terror
Osama bin Laden is still at large. The government says threats still exist. Many terror detainees have still yet to be tried for acts of terror. The president will continue to argue the U.S. must remain “on offense.”   

Relevance
As a lame duck president with the opposition party controlling Congress, the president faces a steeper climb to get things done. The White House says the president intends to push hard for his final two years in office, but as interest turns to the race of 2008, Bush may not have the same command over the public agenda.

The Libby trial
If former White House insider Lewis “Scooter” Libby goes on trial as scheduled for obstruction of justice and perjury charges that stemmed from the CIA leak case, the White House will face exposure and reminders of a scandal.

Libby was Vice President Dick Cheney’s chief of staff and a power player in the administration. Libby's defense team said that it intends to call Cheney as a witness when the case goes to trial. The trial will likely be an uncomfortable distraction for the entire White House.

Kelly O'Donnell is an NBC News White House correspondent.

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