A Time to Regroup

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But neither man belongs to the White House inner circle and neither has a better plan. Wilkerson rejects an idea that close to 50% of Americans support: beginning a withdrawal of U.S. troops now, whether the Iraqis are ready or not. The fact that even some of Bush's critics continue to advocate staying the course in Iraq helps explain why there doesn't seem to be much urgency in the Administration for speeding up the exit strategy. Notes Leslie Gelb, former Council on Foreign Relations president: "All Washington political insiders are saying the writing's on the wall, the troops are coming out. I don't think they're factoring the President into account. He's not running for re-election. He's a true believer."

THE RESET BUTTON

There's a theory going around Washington about why this year has gone so haywire, one that goes to Rove's essential strength. "These guys are very good at campaigning," says an outside adviser to the White House, "and not so good at governing." As long as there is an election on the horizon, they function like a humming machine and their coalition stays in line. But in an environment where that isn't there, they fall apart.

The year's successes--an energy bill, the highway bill, bankruptcy reform, a free-trade agreement--all came before the Category 5 bad news of the fall. But a well-received court nominee could help Bush turn the corner. He will be traveling to South America and Asia before the holidays, which is why the White House road map to recovery starts in earnest in January. "It is fundamentally a question of reconnecting with the American people," says a senior member of the Bush team. "One of the good things about being President of the United States is that even when you're down, you have the ability to control your own destiny through the bully pulpit."

Bush officials are literally going back and reading his campaign speeches. Aides say they have a "back-to-basics" strategy focusing on such traditional Republican issues as spending restraint. As part of the search for a fresh agenda, groups of Bush aides are working on new immigration and tax-reform policies for possible rollout. But immigration is an issue that splits the party's base, and the recommendations of Bush's tax-reform commission, most notably doing away with the mortgage-interest deduction, are universally viewed as a nonstarter. To try to lower energy prices, the White House is considering taking steps--legislative, diplomatic or jawboning. But in a global economy, getting prices down is easier said than done.

As for a shift in the lineup, Card could be named Treasury Secretary by the beginning of the year. Among his possible replacements are White House budget director Joshua Bolten, former Montana Governor Marc Racicot and deputy budget director Clay Johnson III. An adviser says the personnel shifts will be gradual: "They don't want to communicate panic because they're not panicked."