'Cut and Run' or 'Stand and Bleed?'
The "declare victory and go home" withdrawal option has also been taken away by events in Iraq. With the security situation at best stable, and more likely deteriorating, there is no discernible "victory" to be had in Iraq in the near term, despite all the signage last November and March. So, even though we may see cosmetic changes in numbers, restaffing, lowering non-combat MOS, there's really no credible way he can bring the troops home and call it a victory.
On the other hand, a possible change in the other direction would be to massively raise troop levels in the short term to the 350,000 to 400,000 level that sane analysts said would be required before the war, assuming you can find the combat ready troops. This sort of heavy reaction could temporarily stabilize Iraq, buying the Maliki government six months and offering them a more stable situation in which to take control.
This option is also limited by politics in a very similar manner to Rumsfeld's apparent permanent job security. In order to surge troops into Iraq, the President would be forced to admit that the current strategy isn't working and answer questions of why higher troop levels weren't put in place earlier.
So, politically hemmed in on the withdrawal side and politically hemmed in on the escalation side, the Bush administration has chosen the middle strategy, to stand and bleed.
Only they're not the ones bleeding.
UPDATE: (From Thursday's NYTimes) "But people who attended a series of high-level meetings this month between White House and Congressional officials say President Bush's aides argued that it could be a politically fatal mistake for Republicans to walk away from the war in an election year."