Dec. 11 (Bloomberg) -- President George W. Bush wants to make energy independence a domestic priority next year with an eye to gathering bipartisan support in the Democratic-controlled Congress, his chief economic adviser said.

``The American people are very interested in the leadership of our country figuring out a way for us to be less dependent on foreign sources of oil,'' Allan Hubbard, director of Bush's National Economic Council, said in a Dec. 8 interview. ``I'm sure he will address energy security in his State of the Union and his other major speeches.''

Bush, in his State of the Union address last January, declared the U.S. ``addicted'' to oil and set a goal of cutting Middle Eastern imports by 75 percent by 2025. House Speaker-elect Nancy Pelosi, a California Democrat, has pledged to make rolling back subsidies for oil companies one of her top priorities when Democrats take over Congress in January.

The president also will make immigration reform a top priority, Hubbard said. Bush wants legislation that allows for a guest-worker program and a path to citizenship, and Democrats mostly agree. Bush's proposal died this year after Republicans who controlled the House stressed border security measures instead.

Bush may bring energy security back to the fore because the concerns about high prices and foreign supplies haven't dissipated among Americans, Hubbard said. ``There's not a lot of excess capacity,'' he said.

The U.S. is vulnerable to interruptions in supplies because so much of the world's oil comes from ``people who currently are not our friends,'' Hubbard said, citing Iran.

Supply and Demand

``You've two choices: supply and demand, or a combination of the two,'' Hubbard said. ``You can do it through either increasing supply or encouraging people to be more efficient in their consumption.''

Hubbard wouldn't provide details of future White House proposals, saying specifics will come when Bush makes his State of the Union speech to Congress and the nation on Jan. 23. While acknowledging that raising taxes on gasoline would cut demand, he dismissed suggestions that Bush would propose any increases.

``It would be nice to figure out how to do it without any pain or sacrifice, but if there is pain or sacrifice, I'd minimize the pain or sacrifice,'' Hubbard said.

Some lawmakers on Capitol Hill ``would like to do something dramatic in this area,'' Hubbard said. ``On both sides of the aisle, people recognized this is something that needs to be addressed.''

Social Security

On another Bush priority, shoring up the Social Security system, Hubbard said it's too early to tell if a Social Security deal is possible, he said.

In his 2005 State of the Union address, Bush said the country's Social Security retirement-assistance plan was ``headed toward bankruptcy'' and urged Congress to back his plan to let workers invest some of the funds in equities.

Democrats mostly balked, calling the move a risky ``privatization'' of a public trust. Democrats and Senator Lindsey Graham, a South Carolina Republican, have suggested tax increases such as lifting the $90,000 limit on wages subject to the tax.

North Dakota Democrat Kent Conrad, who will take over the Senate Budget Committee chairmanship in January, said tax increases and benefit cuts may be needed to fund Social Security.

``We have to look to those who are the most fortunate among us, the wealthiest among us who have had the biggest tax breaks,'' Conrad said in a Dec. 7 interview for ``Political Capital with Al Hunt.''

`No Preconditions'

Bush rejected tax increases in 2005 and his push to overhaul Social Security foundered in Congress that year.

While Hubbard said he didn't want to preempt this year's State of the Union speech, ``what needs to happen is for the Democrats to come to the table.'' Bush placed ``no preconditions'' on negotiations, Hubbard said.

``The two sides should come together and put it on sound fiscal footing on a permanent basis, and that's our goal,'' Hubbard said. ``If Democrats want to bring taxes to the table, that's permissible, we'll negotiate with them.''

The 71-year-old government retirement program, without changes, will start paying more in benefits than the taxes it takes in starting in 2017 and run out of money by 2040, its trustees reported this year.

To contact the reporter on this story: Brendan Murray in Washington at brmurray@bloomberg.net

Last Updated: December 11, 2006 00:12 EST