GWB and his not-very-bright brain trust have been trying to do this since shortly after he got into office. That is, grant an amnesty and create a bracero program.
The literal answer to why it is coming up now is that September 11 forced him to back off from publicly endorsing it.
Why does he want it?
Rove and Hughes and he have convinced themselves that this is a brilliant triangulation move. They can steal a march from the Dems by copping the Hispanic vote. Most of this is based on some flawed, indeed patronizing, view that “Hispanics are conservative and have great family values.” Well, they are “conservative” in some social senses, at least in their home environs, but not in others. They are not largely “conservative” voters in the U.S. [see caveat below], and no amount of telling them that the GOP’s agenda is really theirs is going to make them believe it. BTW, Mexico has been a corrupt, one-party socialist society for decades. It could be that Mexicans are yearning to exercise democracy and capitalism, but it could also well be that the socialism and un-democracy have given many Mexicans a different set of viewpoints than the self-sufficient, small-state Jeffersonian democrats that the GOP “strategists” apparently envision when they simplistically refer to “conservative Hispanic values.” Even as to religion – anyone who’s spent time in Latin American societies can attest that the relationship of many modern Latin Americans to their Church is sometimes as much cultural as philosophical, and does not guarantee “conservative” behavior (I’d be surprised if there is a Mexican drug cartel leader who doesn’t have a Virgen of Guadalupe medal somewhere on his person).
All of this delusional thinking about “conservative Hispanics” (of course there are some, but I don’t think it’s anywhere near a majority of Mexicans or other Latins) is based on, I think, the completely anomalous (and now waning-in-influence) 1960s Cuban exiles. Who were upper middle class to upper class European-stock ideologues displaced and impoverished by a fairly abrupt communist Revolution, and who had personal cause to be radically conservative across the board. That is not remotely close to a description of the Mexican immigrants of today (unless the 2,000 caudillo-type families who run the country were the ones wading across the Rio Grande). N.B. that if you look at how second and third generation descendants of Cuban exiles vote, even they are far from as conservative/pro-GOP as their parents. Thus, Rove et al. are, factually, likely extremely wrong in predicting that new or recent immigrants will become significant sources of net support for the GOP (unless the GOP changes its policies so significantly as to become analogous to the kind of candidates that Hispanic immigrants currently here tend, in fact, to vote for, viz., fairly liberal Democrats). Immigrants from the days of the Irish and Italians tend, in the U.S., to vote solidly Democratic for at least two or three generations (the Cubans of 1962 are the only significant exception that comes to mind). This is true even for comparatively-prosperous immigrants such as middle class Chinese. The GOP is making a huge bet, and it is unlikely to win it.
Also, cheap labor does, no doubt, appeal to big business.
In summary, this is the first time in recent memory that there has been no party that is, at its top level, formally or actually opposed to mass amnesty and open borders. Until now, there was a political price to be paid by, say, a Dem. advocating for more immigration. Now, it’s only GOP backbenchers who are opposing it, so it can be publicly advocated if GWB thinks he can weather the intramural storm by promising to deliver lots n’ lots of new and hyper-fertile Republican voters.