Quotes of the Day

In the days before George W. Bush was re-elected President of the United States, a story spread through the back alleys of official Washington: Bush had allegedly called Secretary of State Colin Powell into his office and said, "I had to be a war President in my first term. I want to be a peace President in my second term, and I need you to stay on and help me do that." The story was false. Several of Powell's close associates not only denied the story but also laughed when they heard it—they have seen no palpable evidence that Bush plans to change course in a second term. The Secretary's good-soldier days in an unfriendly Administration are over. At about the same time, another story began to circulate, this one involving Bush and U.N. Secretary-General Kofi Annan. "In my second term," the President told Annan, "I want to secure a Middle East peace—but I don't want to fall into the same trap as Clinton." That story is true, according to several sources.

In fact, no one—except, perhaps, Karl Rove and Dick Cheney—really knows what sort of President Bush will show up on Jan. 20 to begin his second term. There are two schools of wishful thinking. One is the "legacy" school, composed mostly of Washington-establishment Republicans of both moderate and conservative hue. "Second terms are about legacy," said a G.O.P. establishmentarian. "I think you'll see a midcourse correction and admission of errors on Iraq now that the Democrats can't make a negative ad about it. I think you'll see him make a real move on expanding health care and tax simplification. He may try some small Social Security-privatization demonstration projects. He will have to address the budget deficit. He will want to find ways to cooperate with Democrats to get things accomplished."

The other school—composed of neoconservatives, religious conservatives and most Democrats—scoffs at the idea of an outbreak of diplomacy and bipartisanship. Bush is who he is: bold, tough, faith based, unyielding. "He's got the biggest balls of anyone you've ever seen," Vice President Cheney has been known to say privately. In this scenario, Bush will not only hang tough in Iraq, he'll also confront Iran about its nuclear arms program, not give an inch to North Korea and stand shoulder to shoulder with Ariel Sharon. He will aggressively pursue the privatization of Social Security, the voucherization of health care and the dramatic simplification of the tax code. He will do this, supporters say, because he thinks he is a leader of rare vision—or because, detractors say, he is a leader of rare arrogance. You saw how bold he was without a mandate in 2000, the thinking goes; imagine how he'll be with a victory in 2004.

Of course, politics is never as simple as all that. Reality forces even the most stubborn politicians to make U-turns and modifications—and in the next four years, Bush will have to spend much of his time dealing with the unpleasant realities he spent the past two campaign years denying. There are at least four titanic "reality-based" problems that this "faith-based" President now confronts. First, the U.S. does not have the military resources to continue an expansive, unilateral foreign policy; we may not even have the resources to maintain our troop strength in Iraq at its current level for very long. Second, we don't have the money to fund any of Bush's domestic plans—certainly not the privatization of Social Security, which has an up-front cost of $1 trillion. Third, Democrats are furious at the bilious tone of the Bush campaign and in no mood to cooperate on anything. The hyperpartisanship will continue to be fed by an increasingly divided and overheated media. Finally, Bush is sitting on a volcano in his own party. The vaunted discipline of the Republicans allowed only a few premonitory rumblings during the presidential election, but there is explosive anger among traditional G.O.P. fiscal conservatives—and also among those in the party who believe the war in Iraq was either wrong from the start or stupidly executed. "I've been biting my tongue," said a prominent Republican who supported the war but is "disgusted" by the execution. "I'll give Bush a week or so after the election, but then I'm going to let him have it."

Iraq, by most accounts, continues to disintegrate. In the week before the U.S. election, an Iraqi national security aide to interim Prime Minister Iyad Allawi allowed that 5% of the recently trained Iraqi troops were probably terrorist infiltrators. "I love David Petraeus," a retired four-star general told me, referring to the U.S. officer in charge of training the Iraqi force. "But you can't train a soldier in six weeks. And you can't motivate a soldier who doesn't have a real government to fight for. It might change for the better if we can hold credible elections—a big if, with the emphasis on credible."

The fate of Iraq may be determined by the answer to a larger question: Will the President continue on the abrasive, unilateral path of his first term, or will he seek, as he implied to Kofi Annan, a more ameliorative approach now that he has been re-elected. A key may be the fate of Donald Rumsfeld. He wants to stay on at the Pentagon, but the President may decide that a fresh start requires the sacking of the man who presided over the Abu Ghraib abuses, the no-bid Halliburton contracts and the post-Saddam planning disaster. The "legacy" Republicans believe it is an absolute necessity for Bush to replace his current foreign-policy team, swapping the neoconservative idealists who provided the rationale for invading Iraq for more pragmatic, traditional conservatives. "But I don't think it's going to happen," a member of George H.W. Bush's Administration told me. "Not so long as Dick is Vice President."

In his first term the President came to be preoccupied with foreign policy—a tendency shared by most Presidents, even in peacetime. Domestic policy isn't much fun: there's a Congress and an army of interest groups to be tended. Bush was successful at first. He passed his tax cuts, his No Child Left Behind Act; he tilted the playing field toward the needs and desires of corporate America. He will have a tougher time getting his way in a second term because of the soaring budget and trade deficits—which, taken together, economists call the current-accounts deficit. "This is the trap door for the economy," says Robert Shapiro, a moderate Democratic economist. "We will soak up more than 80% of the world's savings to pay our deficits this year. That can't go on indefinitely."

But political realities may prove a greater obstruction to the President's domestic agenda than financial limits. Given the Democrats' enmity—and given their continued ability to block almost anything in the Senate—the President will face a battle on any initiative, and Armageddon when he nominates the next Supreme Court Justice. He will face conflicting pressures from his own party as well. The fierce supply-side and social conservatives who run the House are almost a different party from the fiscal conservatives and social moderates who populate the Senate. Fragmented Republicans plus pugnacious Democrats—plus no money—is a formula for legislative paralysis.

In the end, George W. Bush's greatest challenge is an existential one. The public square has become toxic. Rational political discourse may no longer be possible—a fact attributable, at least in part, to the Limbaughs and Drudges and Hannitys who proselytized for Bush during the endless election season. Those blatherers have their enlightened self-interest, which is to keep up the carnival assault on liberals. But contentiousness can no longer be in the President's interest if he wants to get anything done. His success now depends on his ability to maintain his principles, yes, but to do so in a way that seeks to heal the deep public wound we have suffered. His instinctive style defeated John Kerry's cerebral calculations. The question now is whether Bush's excellent political instincts lead him back to first things, the things he promised in 2000: to be a more compassionate conservative, to run a humble foreign policy, to be a uniter not a divider.

• Joe Klein