NASA = bull
Bush = matador
Moon and Mars initiative = cape
Set Shuttle/Station termination date = sword
Setting an end date for the Shuttle is going to be irrevokable. Spare parts won't be purchased, contracts will be set to end, new people won't be brought onto the program, etc. By 2010 the shuttles will be headed for museums. The Station will be abandoned in place or just turned over to the Russians.
Meanwhile the CEV will be caught in the Congressional nutcracker. The TX/FL/AL delegations won't vote for it unless it requires enough manpower to keep their constituents employed. The rest of congress won't support it unless it's 90% cheaper than Shuttle. No design can meet those requirements, so every year we'll get a new redesign initiative and they'll kick it down the road. Moonbase/Mars Landing will be hostage to the CEV and just get study funds. Bush will be back on the ranch by the time the schedule slip becomes obvious to the public, having passed the problem onto his successor.
The design studies will quickly eat up the $1 billion Bush is throwing at them. NASA could probably spend that much on building a skateboard. So when the last Shuttle flight lands the CEV won't be ready to take over. The CEV study team will have lots of office space as Johnson Space Center and the other shuttle support facilities empty out. Possibly the new president will adopt CEV as his/her own, but mostly like the Bush legacy program will be shunted aside for whatever the new priority is.
NASA will keep its aeronautical and unmanned space efforts going--they're far from the biggest part of the budget. JPL will have some lovely pictures of the Moon and Mars to display as progress towards Bush's goals. But the total budget will start collapsing toward half of the current one once the shuttle stops flying.
Once the standing army is gone the resistance to an efficient CEV will also fade, but it'll have to win support from Congress on its own, and a 1960's performance level might be a tough sell.
I suspect what will finish off CEV will be a demonstration by X-Cor or one of its competitors of a private sector manned access to space capability. Then the government will get out of the space development business and buy what it needs on the market, like it does with trucks.
The one chance I see of avoiding this scenario is a massive reorganization of NASA putting CEV/Moon/Mars efforts in a new unit completely unbeholden to NASA's current power centers. But that would require a serious expenditure of political capital by the President and I can't see it happening. I just hope the most successful parts of NASA don't have their budgets eaten to stave of the collapse of the manned space sector, the way some good programs were sacrificed to space station.