President Bush delivered a blockbuster of a speech Wednesday night with his State of the Union address.

It was also a budget-buster.

The speech had great highlights. When the mother of a soldier killed in Iraq hugged an Iraqi human rights activist, finger still stained with the proof she voted in the country’s first election, it was a stirring and emotional moment. Even with all the Iraq election’s shortcomings, it was a great day that deserved to be celebrated.

But the heartstrings of the hug don’t obscure the rotating rationale for the war. Now, the United States is spreading democracy. At the onset, the war was about eliminating a growing threat of weapons of mass destruction.

Nonetheless, the president set exactly the right tone on continued involvement in Iraq. The country cannot set a arbitrary timeline for withdrawal. Instead, our efforts in Iraq must depend on reaching specific goals, which the president listed: a democratic Iraq, at peace with its neighbors and able to defend and police itself.

On the domestic side, the president stumbled with two big policy initiatives, restructuring Social Security and reducing the budget deficit. On both, his rhetoric doesn’t match reality.

Despite what the president said, Social Security will not be bankrupt in 2018. It will begin to draw down its trust fund, which has been invested in U.S. Treasury bonds, the most secure investment in the world – at least until the president decided that they were just worthless IOUs. New Congressional Budget Office numbers, released just Monday, say Social Security will take in more than it pays out until 2020, an improvement over the earlier predictions. The president’s plan to privatize Social Security, despite prime time airing during the State of the Union, is still a tough sell. And it should be. The plan is deeply flawed.

President Bush reiterated his pledge to cut the annual budget deficit in half by 2009, and he said he would present a budget to Congress that holds the line on domestic discretionary spending. He went so far as to say that in 2006 he would eliminate 150 programs that aren’t effective.

But the president’s deficit goals are at direct odds with his other policy initiatives. Already, the budget deficit next year is estimated at $427 billion. Even if the president zeroed out all discretionary domestic spending, we would still have a deficit. And President Bush’s record on the deficit is not encouraging.

During his first term, spending has increased at about 7 percent a year. His plans to make his tax cuts permanent would add $1.6 trillion to the deficit over 10 years. Eliminating all the non-defense discretionary spending only saves $1.3 trillion in the same time period.

The budget figures don’t include the ongoing costs for military operations in Iraq and Afghanistan. The president is expected to seek $80 billion in immediate funding, and with the country’s commitment cemented, the dollars necessary for operations will only increase.

In all, President Bush has turned a projected surplus into real deficits. According to the CBO, about two-thirds of that can be blamed on lower revenue (read tax cuts) while a third is pinned on increased spending. The CBO projects a 10-year deficit of $855 billion.

Add on top of that Social Security privatization. The president’s plan, which wouldn’t really heat up until 2009, would cost between $1 trillion and $2 trillion in its first decade alone. That amount explodes in the second decade.

Factor those “hidden costs” in, along with a few others, such as fixing the alternative minimum tax, and the 10-year deficit hits $5.8 trillion.

None of this adds up to cutting the annual budget deficit in half by 2009. The country is on a dangerous fiscal path. Cuts in block grants and midnight basketball won’t be enough to balance the books. Republicans, in control of the White House, House and Senate, have successfully created a situation where the government is starved for revenue. The answer so far has been more borrowing.