Economy front and center in State of Union

Bush will lobby for stimulus plan and may call for more measures to ease housing crunch and cut corporate tax rates. Major new economic initiatives are not likely.

NEW YORK (CNNMoney.com) -- The state of the slowing economy and how to energize it - now and beyond - will be a focal point of President Bush's State of the Union address on Monday.
Bush, in his last year of office, is unlikely to make any new economic proposals like he has in past addresses. Last year, for instance, he called for a change in how the government taxes money used to buy health insurance, and he asked Congress to set a goal of reducing American gasoline consumption by 20 percent over 10 years.
"I think there will be a pretty significant emphasis on what they're doing in the immediate term to shore up the economy," said Scott Hodge, president of the Tax Foundation, a research group advocating for a simpler tax code and lower taxes. "There's so much anxiety in the markets and in business. I think he'd want to assure people they've taken the appropriate actions."
This year, before discussing the war in Iraq, Bush is expected to promote and call for swift passage of the $150 billion economic stimulus package brokered between House leaders and Treasury Secretary Henry Paulson.
The stimulus deal may face some resistance in the Senate. Some Democratic senators are unhappy that their House colleagues gave up on the party's push to extend unemployment benefits in addition to offering consumer rebates and business tax breaks.
The economic proposal, announced last week, also includes two housing measures intended to make it easier for consumers to obtain mortgages or refinance expensive subprime loans.
Beyond the stimulus plan. Bush may use the State of the Union address to push for other measures intended to ease the housing downturn, some experts said.
"Look for a pitch for tax-related provisions, such as opening the door for states to use tax-free bonds to help homeowners refinance out of unaffordable subprime [adjustable-rate mortgages]," said Jaret Seiberg, senior vice president at the Stanford Group, a Washington policy research firm.
Seiberg added that he believes Bush may endorse a real estate industry plan to offer $5,000 tax credits to first-time home buyers.
The president will also use the stimulus package as a launching-off point to call once again on lawmakers to permanently extend the tax cuts he engineered in 2001 and 2003 that will otherwise expire in three years. White House Press Secretary Dana Perino said Bush will factor an extension into his 2009 proposed budget, which will be released Feb. 4.
The administration had originally wanted such measures included in the stimulus plan. Proponents and critics of making the tax cuts permanent acknowledged that adding them to a short-term stimulus package could delay its passage because of the fierce disagreement between Democrats and Republicans over the issue.
Critics questioned how much such a move would stimulate the economy in the short-term. Proponents, however, said investors and businesses would feel more confident making investments today if they knew what their tax bill will be tomorrow.
"The best thing we can do to deal with uncertainty in the economy is make the tax cuts we passed permanent," Bush said in a speech to congressional Republicans on Friday.
Giving business a hand. One measure the president may push for is lower corporate tax rates - a campaign led by Treasury Secretary Henry Paulson.
The stimulus proposal announced Thursday also includes tax breaks for businesses to spur them to invest in plants and equipment.
"I'm surprised how readily the House agreed to the business tax breaks in the stimulus package. That may empower proponents of lower corporate taxes," said Greg Valliere, chief political strategist at the Stanford Group.
Right now the top income tax rate for corporations is 35 percent. Proponents of lowering it say it puts the United States at a competitive disadvantage since the majority of economically developed countries have lower corporate tax rates. U.S. companies benefit from bigger tax breaks but have to spend time and money to take advantage of them.
"[Bush] could try to put out a marker," said Hodge of the Tax Foundation.
At a conference of CEOs last summer, Paulson asked panelists whether they'd like to see the corporate tax rate lowered to 27 percent from 35 percent and preferences such as the research and development credit eliminated.
Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, last fall proposed a major tax overhaul that included lower corporate tax rates. There is little consensus, however, between Democrats and Republicans about how low corporate tax rates should be.
But Bush is not likely to do more than lay out the big picture of his agenda on Monday. "I expect broad statements and no specifics," said Clint Stretch, managing principal of tax policy at Deloitte Tax. More telling, he said, will be the president's 2009 budget proposal.

Taste Test: Irish whiskey

Money Magazine bought five blended Irish whiskeys and then rounded up a tasting panel of drinkers - including a couple of recent imports - from County Donegal.
By Noah Rothbaum

County Antrim
Clontarf Irish Whiskey, $23
Grade: A
Sniff Test: This whiskey had the strongest and also the richest smell.
Taste: It fills the mouth with a big, pleasant, long-lasting flavor.
Burn: There wasn't much of a burn with this easy-drinking whiskey.
The Bottom Line: We were shocked by how good it smelled and tasted. Perfect for a St. Patrick's Day celebration.

County Cork
Jameson, $28
Grade: B-plus
Sniff Test: "Smells pretty good," including "hints of berry."
Taste: "Spicy," "complex," "robust" and "woody" with a nice finish.
Burn: Good amount of burn.
The Bottom Line: Jameson dominates the Irish whiskey market for a reason.

County Offaly
Tullamore Dew, $25
Grade: B-plus
Sniff Test: It has a "rich" but not "overpowering" aroma.
Taste: Silky. Not only does it go down smooth, but it has a good aftertaste.
Burn: It's very smooth, but it still warms the pipes.
The Bottom Line: Tullamore Dew might not be as popular as other brands, but it definitely impressed us. A solid choice.

County Antrim
Bushmills, $27
Grade: B
Sniff Test: A "pleasant," "sweet" and "complex" nose.
Taste: Despite the slightly oaky and "caramel-like" taste, this was a little harder to get down than some others.
Burn: We felt the burn. It even made our cheeks flush.
The Bottom Line: Bushmills hails from Northern Ireland. It's full of flavor but a little rough.

County Louth
Kilbeggan, $24
Grade: C
Sniff Test: Couldn't smell anything here. Is this water?
Taste: Comparatively lacking in the flavor department, except for a slight "antiseptic" and "biting" taste.
Burn: Burn? Yes, it does - all the way down.
The Bottom Line: Good for mixed drinks but not for making toasts.

Get your Irish up
Ireland is famous for many things - James Joyce, the Blarney Stone and Bono among them. Not that long ago,the country was also famous for its whiskey. For decades, American bars and liquor stores were stocked with plenty of brands from the Emerald Isle. Then came Prohibition. World War II kept Irish whiskey off the shelves, and afterward Americans began developing a thirst for vodka instead. Until recently, Irish whiskey drinkers had relatively few choices. Basically, Jameson or...Jameson.But these days, the Irish whiskey industry is experiencing a renaissance. Case sales of the drink increased nearly 130% between 1994 and 2005, reports the Distilled Spirits Council of the United States. And New York City's Park Avenue Liquor Shop alone carries over 30 varieties. Store v.p. Jonathan Goldstein estimates that his selection has doubled in the past decade.Ironically, you can thank Scotland for this rebound. As single-malt Scottish whisky became more popular in the late '90s, bartenders, store owners and drinkers began exploring alternatives, says John Hansell, editor of Malt Advocate magazine. "The Irish whiskey industry saw how popular Scotch was becoming and said `Why don't we do the same thing?' " And lo, a handful of new labels have since emerged.What's helped in that growth is the fact that Irish whiskey is very approachable. It has a honeyed taste, with less burn than many other whiskeys. This is because most Irish distillers do not smoke their malted barley (as Scottish ones do); they usually triple-distill the whiskey (Scots do it twice); and they may use a combination of malted and unmalted barley (vs. onlymalted in Scotch). As a result, "it's an easier drink to get down," says Goldstein. In honor of St. Patrick's Day, I gathered some confirmed whiskey drinkers, including a few native lads and lasses, to get to the bottom of the most popular Irish whiskeys on the market. What we discovered: nothing short of a pot of gold. Slainte.

4 hot vacations at cool prices

For the best deals on warm-weather getaways, you've got to head off the beaten beach.
By Charles Passy

Paradise has its price
That's the lesson that many would-be travelers learn this time of year when they begin desperately prowling for last-minute vacations to places like St. Bart's, South Beach, Cabo or Costa Rica. Alas, it costs a lot to hit the hot spots in the dead of winter.Not willing to blow your 2008 IRA contributions on a one-week trip? Well, just between us, there is another option: Head to a lesser-traveled destination. You'll reap the benefit of lower prices and have more of the beach to yourself to boot.

Nicaragua
For the past few years, Costa Rica has been the darling of the adventure- and eco-travel crowd. But the country has seen a rush of development as a result (proof: It now boasts a Four Seasons, where rates start at $450 a night). So where to instead?Nicaragua. Once known for weak infrastructure and political instability, the country has gained new fame as "the next Costa Rica." And it does indeed have similar attributes, including a Pacific coastline beloved by surfers, active volcanoes and expanses of rainforest. It's also now considered one of the safest Latin American countries.Arguably, the country's best beach destination is the Pacific fishing village of San Juan del Sur. "There's a picture-perfect crescent bay," says Joshua Berman, co-author of Moon Handbooks Nicaragua. "And the beaches to the north and south are stunning."Wherever you head, keep in mind that Nicaragua is one of the poorest countries in this hemisphere, and as such it has roads that are bumpy and water that isn't always potable. On the plus side, since the dollar is strong against the local córdoba, you can get a topnotch room for $150 a night and a good meal for $15.Where to stay: The country's top-rated resort, Morgan's Rock Hacienda & Ecolodge, is a half-hour from San Juan del Sur. "It's built sustainably into the landscape with luxury tree houses hanging over the ocean," says Berman.

The Dominican Republic
The D.R. may not have the star-studded cachet of other chichi Caribbean destinations, such as St. Bart's or Anguilla. But the country that shares the island of Hispaniola with Haiti does have a lot to offer to those with kids in tow, and at reasonable prices."The D.R. is an all-inclusive hotbed right now," says Ana Chavier Caamaño, author of "Moon Dominican Republic." "Because of this, it's a great place for money-conscious people who want to be treated well."Meals are part of the package, and you don't have to fret about unanticipated expenses (a.k.a. Junior's demand for umpteen sodas a day). Besides that, the resorts offer almost around-the-clock kiddie activities that allow you and your spouse a little alone time.The coastal area of Punta Cana, where many of the all-inclusives are situated, offers white sand beaches and coral reef snorkeling. Though the resorts are pretty insular, the best of them also help guests experience some local culture, from fried plantains to merengue music. Where to stay: Petra Schmeckpeper, a travel agent with Carlson Wagonlit in La Crosse, Wis., suggests the Spanish-based Riu chain, which runs five resorts in Punta Cana, all with family programs. Weekly packages begin around $1,100 per person, all-inclusive.

Mexico's Riviera Nayarit
In terms of Mexican beach destinations, there are the obvious three Cs - Cancún, Cozumel and Los Cabos. But a less touristy, and therefore less pricey, alternative has emerged in what's being dubbed the Riviera Nayarit, a 100-mile stretch of Pacific coast just north of Puerto Vallarta.The Riviera maintains the flavor of the "real" Mexico that's rare in the three Cs. Here roadside markets offer homemade candies and juices. Farmers transport produce via mules. And Mexican families congregate on the beaches, listening to Tejano music on portable stereos.Make like a local in the fishing village Bucerias, the bohemian surfing town of Sayulita, or tiny San Francisco. These communities offer quality beaches with whale watching and snorkeling - and without a crush of Americans. But go now because 30 resorts will be built here in the next five years, says Erica Duecy, restaurants and hotels editor at Fodor's.

The Lower Florida Keys
South Beach has its strip. Key West is famous for its Jimmy Buffett-infused party vibe. But for those who want a quieter getaway, it's the Lower Keys that count. This 36-mile stretch of the 120-mile Florida archipelago is one of the most protected spots in the state.Composed of a dozen or so islands and sandwiched between more touristy Marathon and Key West, the Lower Keys have strict limits on development (forget high-rise condos). The largest landmass - Big Pine Key, at 10 square miles - is home to a 9,200-acre deer refuge. And some keys, like Cudjoe, have no commercial center at all.The area also feels decidedly tropical, and no wonder: Poised at the bottom of the Gulf of Mexico, it's the closest you can get to the Caribbean within the 50 states. And while the shores of other Keys are notoriously rocky, the Lower Keys' Bahia Honda State Park is a notable exception. It has been rated among the top beaches in the U.S.All this adds up to a vacation spot where you can let your own rhythm take over: Have a late breakfast, spend the morning exploring by boat, then follow up with some serious beach bumming. If you get bored from all the R&R, you're at most a 40-minute drive away from boisterous Key West - the islands are all connected via bridges along the Overseas Highway.