I've got a rush project on my desk, so this isn't the best day for me to react to big (or seemingly big) news, but I made my way through The Washington Post's story on the Iraq Study Group's report and I suspect the Bushies aren't going to have less trouble than you think recovering from it.
Yes, it says conditions are "grave and deteriorating"; yes, it says "staying the course" won't cut it; yes, it says that "none of the operations conducted by U.S. and Iraqi military forces are fundamentally changing the conditions encouraging the sectarian violence"; yes, it says al-Qaeda is only a small part of the problem; and yes, it puts forth the notion of talking directly to Iran and Syria.
But the Bushies won't need to use all that much rhetorical jujitsu to turn lines like "If current trends continue, the potential consequences are severe" against the supporters of withdrawal -- at least in a way that's convincing to their supporters (and the press). Sure, you know and I know that this line is a critique of the results of Bush policy -- but the Bushies will say that this and other conclusions ("it would be wrong to abandon the country through a precipitate withdrawal of troops and support") are calls for precisely the "adjust-to-win strategy" the administration had in mind. (The report even uses the word "adjust," asserting that the U.S. should "adjust its role in Iraq to encourage the Iraqi people to take control of their own destiny.") And even the refrence to the "grave and deteriorating" situation is leavened by a line the administration will eagerly quote:
"The situation in Iraq is grave and deteriorating," says the report's executive summary. "There is no path that can guarantee success, but the prospects can be improved."
"Prospects can be improved." The Bushies will brandish that line. They'll use it to bash "cut and run Democrats" and they'll segue from it into talk about "not leaving until the mission is completed."
So on we'll go, more or less as we would have if this report had never happened.