From W. With Love

By Karen Tumulty/Washington

The anonymous letter written on State Department stationery spilled out of fax machines in five Republican Senate offices on Feb. 15. Stamped URGENT, it suggested that nothing short of an enemy plot was brewing inside the Executive Branch. Clinton holdovers, it warned, were "seeking to box the Bush Administration into a corner where it will have to choose between a bad deal and international embarrassment. Please do not let this happen." The Senators took the threat seriously. Nebraska's Chuck Hagel fired a memo to Deputy Secretary of State-designate Richard Armitage: "We need to get control of this."

Get control they did. Last week, when four of those Senators received another letter on the subject, it was signed by George W. Bush, who assured them that he had quashed the plot. But the plan he killed--a proposal to slow the pace of global warming by limiting the amount of carbon dioxide that electrical utilities release into the atmosphere--was no rogue operation by an underground cell of Al Gore sympathizers. It was a campaign promise made last fall by Bush, one designed to persuade environmentally conscious swing voters that he was greener than Gore.

Industry hadn't taken that pledge seriously. But last month similar language made it into the President's budget proposal--and more was rumored to be in his big speech to Congress, at least until lobbyists made sure it wouldn't happen. EPA Administrator Christine Todd Whitman touted the carbon-dioxide limits on CNN and assured other countries that Bush was serious about them. Behind the scenes, Treasury Secretary Paul O'Neill argued for an even bigger push, telling Bush in a Feb. 27 memo that the main problem with the as-yet-unratified global-warming treaty was that it didn't go far enough. While O'Neill stopped short of endorsing a cap on carbon-dioxide emissions, Bush aides were worried about green creep.

And so opponents of emissions controls--including business associations and industries that contributed millions to Bush's presidential race--decided late last month that the time had come to reverse the trend. Their campaign, which culminated in Bush's turnabout letter to Hagel and the others, had all the finesse of a smackdown, leaving O'Neill embarrassed and Whitman downright humiliated. Bush consoled her with an invitation to Camp David last weekend, shortly after she issued a wan statement declaring her own about-face on the issue. But European leaders who had accepted her assurances were furious, sources tell TIME. British Ambassador Christopher Meyer complained to Vice President Cheney's chief of staff, Lewis Libby. And Swedish Prime Minister Goeran Persson, in a call with Bush on Friday, wanted to know whether he was going to take global warming seriously.

Bush's first reversal of a campaign promise served as a reminder: for all the energy he has put into convincing the country that he is a compassionate Republican--one who cares deeply that poor children learn to read and that their waitress moms keep a few extra dollars out of their paychecks--he is also a classic old-school Republican with an unwaveringly pro-business, antilabor agenda. In the past two weeks, Bush and the G.O.P. Congress have delivered a basket of gifts to business, including a bill striking down workplace-safety regulations, another making it harder for people to declare bankruptcy and wipe out debts, a court action to open wilderness areas to road building and a move to prevent the mechanics union from striking against Northwest Airlines. No longer are lobbyists being told "Later, later, it's coming," says Republican John Boehner, chairman of the House committee that oversees labor-management issues. "We've seen more decisiveness out of Bush in the past 55 days than we've seen out of any President for 15 years."

It took an industry outcry and an ordered Administration review, however, to produce Bush's startling turnaround on carbon-dioxide emissions. The interagency group that met at the White House two weeks ago was deeply divided. Whitman's EPA wanted to stand by the campaign promise. The State and Treasury departments wanted to finesse the issue by deferring action. And political director Ken Mehlman wanted to abandon the promise, calling it a liability in states like coal-rich West Virginia, which Bush won last year after decades of Democratic dominance. All three options were presented to Bush.

Critics howled that Bush's reversal was a payoff to industries that had contributed at least $4.5 million to his campaign--an accusation that would have been easier to deflect had the White House been able to keep its story straight. But first it claimed the campaign had simply made "a mistake" when it included carbon dioxide as a pollutant in Bush's September speech. That didn't square with other recollections. "The argument that this was just a couple of words in a speech couldn't be farther from the truth," says Fred Krupp, who heads Environmental Defense and in a series of campaign discussions helped convince Bush of the dangers of greenhouse gases. Nor did that initial explanation square with Bush's letter, which cited changes in the energy market as the reason for his reversal.

Shaky though his rationale may be, the question of whether to act now on global warming may go down as the most important long-term decision Bush makes. While melting glaciers on faraway mountains may seem like a remote problem to most Americans, the vast majority of climatologists are convinced that global warming is a real problem that could have catastrophic consequences by the end of the century. Over the past three months, hundreds of scientists working under the U.N.'s Intergovernmental Panel on Climate Change have warned that the earth is not only warming but also warming faster than they predicted just six years ago. And the evidence suggests that carbon dioxide belched by coal-fired plants--which generate more than half of U.S. power--is a prime culprit. But Bush was moved by more immediate concerns. Converting coal plants to other fuels could cost more than $100 billion and boost the cost of electricity nearly 50%, according to the Energy Department study he relied on in making his decision. (Environmentalists say the figures are vastly inflated.)

That Bush would side with business should be no surprise to anyone familiar with his record in Texas, and it is a tribute to his political skills that he made it two months into his presidency before his moderate rhetoric collided with his conservative instincts. On social issues, such collisions are inevitable. Last week, as the New York Times reported, Bush planned to ask the American Bar Association to drop its review of judicial nominees, long a sore spot for conservatives. But where business is concerned, Bush has often let Congress take the lead--and the heat. After banks, retailers and credit-card companies poured millions of dollars into both parties during the last election, the bill tightening the rules for consumer bankruptcy sailed through the Senate last week. And a week earlier, with an assurance that Bush would back them, House and Senate Republicans rolled back regulations protecting 102 million people from injuries caused by repetitive work in factories and at computer keyboards. Businesses argued that the regulations were too burdensome and expensive, although the Occupational Safety and Health Administration estimated that they would actually save $9.1 billion a year when the cost of wages and productivity lost to injuries was factored in. Bush didn't call a single lawmaker to lobby for the repeal, but House majority whip Tom DeLay thanked him anyway, attributing the victory to "the very fact that he was in the White House."

Most of the moves Bush has made against labor haven't attracted much attention. One of his first acts in office was to freeze restrictions that prevented the Federal Government from doing business with companies that have a record of violating labor laws. And on a Saturday in February--only three days after Labor Secretary Elaine Chao held a conciliatory meeting with the AFL-CIO executive council in Los Angeles--Bush issued four antiunion Executive Orders: two weakened labor's hand with federal contractors; another aimed to cut into its political power by reducing the amount it collects for political activities. "Put it together, and it's probably as antiunion a package as we've seen from anybody in the past 50 years," charges AFL-CIO political director Steve Rosenthal, who clearly knows how to turn a phrase into a battle cry. "George Bush makes Ronald Reagan look like Mother Jones."

Union officials say Bush's long-standing sympathy for business is not the only reason behind his aggressive stance. It's payback, they say, for their effectiveness in turning out union voters against Bush last fall. Exit-poll data support their claim that voters in union households provided the margin of victory for Gore in such battleground states as Pennsylvania, Wisconsin and Michigan. The United Auto Workers even negotiated a day off on Election Day, during which the union put 2,000 members to work getting out the vote for Gore.

In a conference call with state labor leaders last week, AFL-CIO president John Sweeney declared that unions should once again consider themselves on a war footing. Says Rosenthal: "We're going to start carrying that message into workplaces and make sure people are fully aware of it." Which is bound to make Republicans in moderate districts across the Midwest and Northeast nervous. Last week 33 House Republicans wrote Bush to protest one of his four Executive Orders. And bigger battles loom. The President said last week that he will sign campaign-finance legislation only if it requires unions to get permission from workers before using their dues for political purposes. Bush proposes to allow states to opt out of minimum-wage increases. And unions don't expect to see any friends among the three replacements Bush will make to the National Labor Relations Board this year.

Unions are also planning a major effort to defeat Florida Governor Jeb Bush in his re-election bid next year. More than election grudges are at stake. After negotiations between Jeb and the public-employees union bogged down, the Governor went to the legislature to get some of his demands written into law. "We've got a responsibility," says Gerald McEntee, the union's national president. "How can we stand on the sidelines when the workers are being attacked by the Governor of the state?"

But the sidelines are where labor will find itself as long as Bush is in the White House and Republicans control both houses of Congress. The biggest question now is whether a weakening economy will make it more difficult for the President to satisfy the demands of his corporate backers while meeting the concerns of Americans worried about losing jobs, benefits and economic security. It was probably a bad omen that the Senate voted to toughen the bankruptcy laws last week just as the market headed into bear territory, raising the possibility that more people will be learning about those laws firsthand. Business is all about separating the winners from the losers, but in politics, the losers as well as the winners get to vote.

--With reporting by James Carney, John F. Dickerson, Viveca Novak, Dick Thompson, Douglas Waller and Michael Weisskopf/Washington

With reporting by James Carney, John F. Dickerson, Viveca Novak, Dick Thompson, Douglas Waller and Michael Weisskopf/Washington