In Washington, all topics lead to Baghdad

War with Iraq affects everything from the capital's mood to Bush's domestic agenda.

Washington is in a state of suspended animation. By all appearances, life looks normal here: Congressional committees are holding hearings. Partisan politics are in full flower in a Senate filibuster. The city is bracing for yet more snow.

But in fact, the only game in town is Iraq, and the only question left for many here is not if but when war will start. Gallows humor is rampant.

"This overlay of Iraq has probably affected Washington in a way it can't possibly affect any other place in the United States," says Stephen Hess, a senior fellow at the Brookings Institution. "I can't imagine they're holding their breath in Los Angeles or Ashtabula the way they are here."

President Bush's schedule appears to reflect his usual diverse array of concerns - the economy, the fiscal crisis in the states, outreach to the Hispanic community. But all discussion threads lead to Baghdad. On Tuesday, after a meeting with his National Economic Council and remarks to the press about the value of tax cuts and the importance of job creation, he took a few questions. All centered on Iraq.

There is, of course, a crucial link: The president's economic plan anticipates a large increase in the budget deficit - and that is without factoring in the cost of a war. The White House has avoided placing a price tag on war, but reports from the Pentagon project a sharp increase over earlier estimates - now upwards of $95 billion just for the combat portion and immediate aftermath. The costs of the reconstruction and occupation phase are to be determined.

On the record, Bush administration officials insist there's no link between success or failure in Iraq and his domestic agenda. "Whether or not the president authorizes a use of force, it still is important to get prescription drugs to our nation's seniors and to strengthen the Medicare program," says presidential spokesman Ari Fleischer.

But in reality, say analysts, the domestic and foreign agendas are of a piece. "We're in the 'if' period," says a Republican Senate aide. "If the war goes well, he'll have more political capital."

Michael Franc, vice president for government relations at the Heritage Foundation, lays out three basic scenarios for ways Iraq could affect Bush's domestic agenda. In the first, the war is quick and successful, sending the president's sagging approval ratings back over 80 percent and boosting trust among the American people in all spheres.

Mr. Franc doesn't suggest that Iraq success would buy Bush passage of his agenda unchanged, but says his negotiating position would be vastly improved. "If you're trying to handicap success for, say, Medicare reform, it will be much easier to achieve with 80 percent approval, post war with Iraq, than 50 percent," he says.

In Franc's second scenario, the war outcome is ambiguous. The "base" activists of both parties harden their positions and there is intense public debate about what went right and wrong in the war. Bush's ability to exercise political clout would be tested, but he would have the presidential bully pulpit at his disposal, an asset the Democrats lack.

In scenario No. 3, the Iraq war is a disaster for the US and Bush is in major political trouble. His domestic agenda is hobbled, and he begins to look like President Johnson in 1968, when the quagmire of Vietnam led him to drop out of his reelection race.

"I'm sure the White House is counting on Variation 1," says Franc.

Last fall, Bush showed a willingness to risk some popularity when he set out on a whirlwind tour of campaign appearances aimed at boosting, in particular, Republican Senate candidates. The gamble paid off, and his party controls both houses of Congress.

War with Iraq is many orders of magnitude more serious. But the confidence Bush projects is the same. And although Washington is fully absorbed by Iraq at the moment, Bush's advisers know the economy will still be a major preoccupation with voters in 2004. So they ensure Bush puts out regular reminders that the economy is still a priority - even if all the followup questions center on Iraq.

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