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RED ALERT AT THE WHITE HOUSE

At first, he was dismissed as little more than a malcontent, a political "ankle-biter," in the withering view of White House topsiders. But as conservative challenger Patrick J. Buchanan rolled up a surprising 37% of the Republican vote in the Feb. 18 New Hampshire primary, White House complacency gave way to shock. The morning after New Hampshire's angry verdict, a stunned President Bush nursed deep political wounds, contemplated the prospect of a long and divisive fight for the GOP nomination--and had to wonder how much he had left behind in the Granite State.

Part of Bush--and it surely isn't his heart--remains back in New Hampshire, a trophy in Buchanan's inspired 10-week guerrilla campaign. By accusing the President of abandoning conservative principles, breaking his word on taxes, and spending more time worrying about Moscow than Main Street, Buchanan tapped into two powerful anti-Bush currents: discontent with the President's economic stewardship and rising resistance to the notion that politics is best left to professional politicians. "We have taken the measure of the political Establishment," a jubilant Buchanan declared. "The battle of New Hampshire is over. The battle for America begins." The challenger moves on to the next round of state contests, highlighted by primaries in Maryland and Georgia on Mar. 3, with the assurance of more money, more media time--and more respect from White House strategists.

Despite Bush's mugging in New Hampshire, financial markets shrugged off the President's political wounds. And Democrats weren't about to call in their interior decorators just yet for a make-over of 1600 Pennsylvania Ave. For one thing, Democrats have their own intraparty slugfest to endure (page 28), and they are still dogged by the notion that they lack a candidate of sufficient stature to capitalize on Bush's troubles. For another, political pros and many of the President's business partisans believe he retains the strength to win renomination and mount a spirited general-election campaign--although the nominating struggle will come at a high cost, widen the rift between GOP conservatives and moderates, and make Bush more vulnerable in the fall.

A MESSAGE. The pros have ample reason for not counting Bush out. First, there's the frostbite factor. New Hampshire's reputation for supporting political insurgents--voters there were equally kind to a Democrat-bashing Democrat named Paul E. Tsongas--makes the state's political culture unique. Moreover, New Hampshire's cratered economy, one of the hardest-hit in the nation, made Bush's economic mismanagement the prime issue, rather than Buchanan's often incendiary views. As the campaign moves to other, less recession-blasted venues, the President figures to enjoy better luck rallying Republicans. Indeed, 52% of Buchanan's New Hampshire supporters conceded that they view their champion less as Presidential material than as the means to send a wake-up message to George Bush.

The message, safe to say, arrived. New Hampshire was the first testing ground of a fledgling Bush campaign organization still struggling to get into fighting trim. And thus far, Bush's vaunted team has shown all of the market-research acumen and nimble reflexes of Detroit's Big Three auto makers.

As a result, the President made some costly strategic blunders. His four quickie visits into the state were hardly a match for Buchanan's intensive stumping. Top Bush politico Robert M. Teeter held off on tough negative TV spots that could have damaged Buchanan, largely for fear of widening the moderate-conservative split in the general election. While Bush held his fire, "we had Buchanan kicking the hell out of us for weeks," laments White House political director Ronald C. Kaufmann.

Bush's inept handling of his heavily hyped State of the Union message hardly helped his cause. The President unveiled his modest economic recovery plan to widespread yawns in New Hampshire, and comparisons of his domestic vision with the bold leadership of the Persian Gulf war sounded like a stretch to most voters.

To make matters worse, Bush appeared terminally indecisive by pulling back from his own middle-class tax cut on the eve of the vote. GOP conservatives, furious over Bush's earlier retreat from his no-tax pledge, strafed him with new TV commercials that portrayed the President as a drifting leader with no political moorings.

Buchanan's surprising showing "lances a boil that has been festering in this party for four years," proclaims Buchanan finance director L. Brent Bozell III, who predicts a new surge of campaign cash for his man. Indeed, Buchanan's ability to tap conservative mailing lists has been impressive. Far from being outgunned in New Hampshire, he poured $2 million into the race and is due soon for an infusion of $1 million in federal matching funds.

Over at Bush headquarters, a sobered campaign crew has gone on red alert. In the wake of the debacle, his political team will close ranks and work much harder to mobilize grass-roots support for Bush's imperiled candidacy. In addition, the President himself will react by dropping the studied ambivalence toward his GOP rival. In coming days, look for Bush to paint Buchanan as a dangerous fringe candidate willing to lead America back to a dark, nativist past. "Get some sleep, Pat," croons top Bush aide Charles R. Black, who honed his own brand of political pugilism with the likes of Senator Jesse Helms (R-N. C.). "You'll need it now." Adds GOP activist William J. Bennett: "No more kinder, gentler stuff. This is a serious matter."

Bush will come out fighting in Georgia and elsewhere in Dixie. In 1988, Bush's strongest political bastion was the South, a region noted for its economic optimism and strong susceptibility to patriotic appeals. This time around, the President's men will seek to use Bush's able direction of Operation Desert Storm to drown out Buchanan's cries of "moderate wimp."

More important, the Irish-Catholic Buchanan's gut-punching style may not translate well in the South. "The President is as strong in the South as he is in any part of the country," says Emory University political scientist Merle Black. "But he must reconstruct the coalition of conservatives and swing voters that gave him victory four years ago."

FIREBRAND. Even if Buchanan beats expectations in Dixie and goes on to do respectably well in some big Northern primaries, Republican nominating rules don't permit the shenanigans that make Democratic primaries such wonderful spectator sports. As a result, Buchanan may go on to score strong gains in the popular vote, only to be denied the delegates he would need to unseat Bush. That won't stop the conservative firebrand from being a force at the August GOP convention in Houston. But from the standpoint of delegates, Buchanan simply has little chance of matching Bush's support.

The President also has time on his side. Although it's scant comfort to Bush now, odds are strong that a gradually healing economy will lessen the sting of Buchanan's economic broadsides. Bush will also stage a diversion by stepping up partisan assaults on the Democratic Congress and returning to the highly charged social issues that can mobilize his conservative base.

Despite these advantages, though, George Bush's position bears eerie similarities to the one in which Gerald R. Ford found himself in 1976. Back then, a onetime conservative commentator named Ronald Reagan scared the wits out of the moderate GOP incumbent by nearly besting him in the New Hampshire primary. A Ford campaign guru named Bob Teeter serenely counseled his boss to stay on the high road and ignore Reagan's sterling sound bites.

One of Ford's closest advisers was economist Alan Greenspan, then serving as head of the Council of Economic Advisers. Greenspan, who considered himself a master forecaster, told Ford not to worry when a year-old economic recovery seemed to hit the wall in mid-1976. Greenspan was on target economically--the "pause" ended in the fall, but the slowdown devastated Ford. The combination of economic distress and Reagan's relentless pounding softened up the hapless Ford for a November pratfall before a little-regarded Democrat, a southern governor named Jimmy Carter.

TIGHT SPOT. Few see George Bush meeting a similar fate--at least not after one primary setback. But at the very least, Bush will now have to step off his lofty pedestal and practice the old-fashioned retail politics--pork rinds, anyone?--that so unnerve him.

That leaves the President in a tight spot: Too many policy shifts to accommodate his restive right wing, and he looks like a vintage flip-flopper in the mold of Jimmy Carter, circa 1980. A too-rigid adherence to his discredited, above-the-fray campaign script, and he comes off like a latter-day Jerry Ford. About the best that Bush can do now, GOP veterans say, is keep his fingers crossed, pray for the long-delayed recovery Greenspan keeps talking about--and keep rooting for the Democrats to indulge in their traditional passion for self-immolation.Douglas Harbrecht in Nashua, N.H., and Lee Walczak in Washington, with Paula Dwyer in Manchester, N.H.


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