arely three weeks after the catastrophe, on Oct. 3, 2001, President Bush convened business leaders on Wall Street to reassure them that he would do everything possible to steady the national economy, still reeling from the terrorist attacks. The executives called for a massive stimulus package, which Bush promised to provide, and they proceeded to heap praise on the commander in chief. "The job of a leader is to define reality and give hope," said Kenneth Chenault, chief executive of American Express, "and you are defining this new reality ... and you are giving us a great deal of hope." At the time, most Americans seemed to agree.

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Today, things are starting to look different. Bush's job-approval ratings are still high, but not as rock-solid as they were in the weeks after September 11. He still proclaims that winning the war on terrorism–"no matter what the cost"–remains his personal mission as president. And he is still immersed in running that war, receiving detailed intelligence briefings each morning and meeting regularly with his war cabinet to plot strategy. Americans tell pollsters they are quite pleased with his handling of the crisis. But other issues are intruding on his time and demanding his attention. The question is whether the same techniques he used against al Qaeda nearly a year ago–defining reality and giving hope, providing moral leadership and boiling issues down to their simplest form, delegating authority to talented advisers–can work equally well in other arenas.

Bush's main problem is that most domestic problems don't appear to justify the kind of moral crusade that seemed appropriate in liberating Afghanistan. Nor is the country prepared to unite behind Bush's conservative vision of domestic reality. And, aside from his proposal to create a Department of Homeland Security, Bush is not inclined to use government as an agent of fundamental change.

"He's at his best when the issues are at their clearest and when his administration is united internally," says political scientist Bill Galston, a former adviser to President Bill Clinton. "When there are shades of gray and when his administration is divided, I don't think he has distinguished himself." In short, Galston argues, Bush is good at "seeing the verities" but has trouble "seeing through the complexities."

And the issues that Bush now faces are nothing if not complex, ranging from the problems in the economy to the return of the federal deficit, corporate corruption, healthcare reform, and potential foreign-policy crises between Israel and the Palestinians, India and Pakistan, and foes elsewhere around the world. There is also the specter of war against Iraq, which Bush has all but promised in an effort to oust Saddam Hussein. Many members of Congress and some military strategists oppose such a conflict and insist, at minimum, on a public debate about what to do. "They may stir up a real storm next year if they go into Iraq without consulting Congress," says presidential historian Robert Dallek. On the other hand, the country could rally around the commander in chief as it did after 9/11.

What is clear is that any invasion of Iraq would trigger still another shift in the political landscape for an administration that has been forced to deal with one unexpected twist after another. The first phase started shortly after the Supreme Court voted, 5 to 4, to give Bush the White House after the disputed election of 2000. His main goal at the start of his presidency was to establish his legitimacy and competence, which proved to be a challenge in Washington's divided atmosphere and because of Democratic opposition to his massive tax cuts.

Most of those concerns were erased in Phase 2, which started September 11 and enabled Bush and his talented foreign-policy team to show they were up to the job. For a former Texas governor with little foreign-policy experience, Bush turned out to be an effective commander in chief.

Today's Phase 3 is marked by rising public worries over the economy and other domestic issues. This has sparked disagreements between the White House and many congressional Republicans, who want Bush to be more aggressive in reassuring voters that he is doing all he can to boost the economy and crack down on corporate corruption. Adding to Bush's dilemma is the sense that his administration, which is filled with former business executives, is too cozy with corporate interests and that his domestic advisers are not in the same league as his foreign-policy team.

Democrats hope to make all this a big issue in the fall, partly because Bush and Vice President Dick Cheney are former CEOs who apparently presided over the same business practices that the administration is now condemning. Finally, Americans are increasingly worried that the country is on the wrong track, according to recent polls.

But Bush advisers counsel patience. "The question is whether it's a snapshot or a trend," says White House Communications Director Dan Bartlett. "There is a very sophisticated view of the American people about what happens in Washington and what happened on whose watch." Bartlett says that, above all, Americans "want to make sure that their president understands what they're going through."

That's something Bush's father–also a revered commander in chief, for his victory in the Persian Gulf War–never demonstrated during the recession of the early 1990s, when he was widely perceived as insensitive and aloof. But President Bush is trying to avoid his dad's mistakes. He meets periodically with everyday families across the country to discuss their problems, and his aides say he is consulting with various experts to find appropriate solutions.

Bush also is borrowing from Bill Clinton's playbook by announcing "small bore" initiatives such as promoting adoption, encouraging physical fitness, and urging the real-estate and mortgage industries to expand minority homeownership. This is designed to prove he has a real domestic agenda. Presidential historian Dallek adds a word of caution. "His presidency is much more vulnerable than in the days and months after 9/11," Dallek says, "but there are limits to what he can do–because of fortune, luck, happenstance."

Yet his rhetoric about what the terrorists wrought remains almost the same as a year ago. At the meeting with Chenault and other ceos in New York last October, Bush said, "These people [the terrorists] redefined our culture in some ways, from one that was fairly selfish" to a community in which Americans were asking themselves, "What can I do to help my neighbors? What can I do to spend more time with my kids?" A few weeks ago, he told a gop crowd in South Carolina: "I believe that out of the evil done to America, the culture of our country is changing from one which has said if it feels good, go ahead and do it ... if you've got a problem, blame somebody else, to a culture which says each of us are responsible for the decisions we make in life."

It may be wishful thinking, but that's George W. Bush's way. Optimism is his guiding principle, both as a wartime leader and as a peacetime president.