I suggest this not out of faith in private manned-space efforts (I'm aware of their record), but as a way for manned-space enthusiasts to tear themselves away from supporting the shuttle, ISS, and anything else that can't compete with unmanned space science on a cost basis.

I suggest putting $100 million into something like the X-Prize, and annually fund $100 mil into relevant scientific/engineering research. In the unlikely event that the X-Prize version is claimed soon, establish another, more difficult goal. It's still peanuts compared to what we now spend.

Bush would never go for this, but I could've imagined a Democrat showing some imagination. With Florida being a contested state, though, it would be a tough sell.

Yes, it could kill people, and would need some regulation to avoid killing innocent bystanders. It feels differently to me though that the people risking their lives would be private citizens acting on their own, not government-sponsored astronauts.