He turned to Bernanke. "Ben, do you agree with that?"

"I do, Mr. President."

Bush did not hesitate. After asking some more questions, he signed off immediately.

"I will give you all the backing you need," he told them. "Let's go get it done. This is what the country needs."

What they were talking about went against the grain for a conservative president. "Our people are going to hate us for this," he said in one meeting. "Boy, historians are going to have a fun time with this one," he said at another point. But Bush had grown nervous enough that he did not let old dogma stand in the way. If Paulson said this was what was necessary, then the president was going to support him to the end.

Bush had bonded with Paulson as he never did with his first two Treasury secretaries, seeing a fellow man of action, not a handwringer. In an administration where most cabinet secretaries were invisible, Paulson was a force of nature. He had no time for e-mail, preferring rapid-fire phone calls. He was always moving on to the next thing. If he noticed the person he was talking with understood the point of what he was saying, he often would not bother to finish the thought. For Bush, Paulson would become another Petraeus, a general he would entrust to lead his battle against dark forces. When Bush lost his standing with the public on the war, he knew Petraeus would be a more persuasive front man. If Bush could now no longer command support for his economic policies, then he would let Paulson speak for the government. "In that political environment, we needed Hank to be the voice," said Tony Fratto, the deputy press secretary.

But Bush worried about Paulson. The Treasury secretary had been getting by on barely three hours of sleep a night, running himself into the ground as if single-handedly trying to hold up the world of finance, an Atlas for modern times. As the meeting broke up, Bush pulled aside Michele Davis, a top Paulson adviser.

"Tell Hank to calm down and get some sleep," he advised, "because he's got to be well rested."

Bush walked back to the Oval Office with Ed Gillespie and they stood by a sofa. Joshua Bolten came in behind them and closed the door. Bush stood there for a moment in silence, the words "Great Depression" still echoing in everyone's ears. Then he looked at his aides.

"If we're really looking at another Great Depression," he said, "you can be damn sure I'm going to be Roosevelt, not Hoover."

FOR BUSH, the financial crisis was not the only worry. On September 20, he was told terrorists had bombed the Marriott hotel in the heart of Islamabad, a main gathering area in Pakistan for Americans and other foreigners to meet local contacts, more than fifty of whom were now dead. The day after that, the president watched as Prime Minister Ehud Olmert resigned in Israel amid a corruption investigation, ending any last hopes for a Middle East peace deal during Bush's term despite twenty-five trips by Condoleezza Rice in pursuit of an enduring agreement.

But the firestorm consuming Washington occupied most of Bush's attention. The reaction to the Troubled Asset Relief Program that Paulson and Bernanke had proposed in a scant three-page bill was visceral and unrelenting, from Republicans as much as anyone. Even inside the White House, speechwriters joked that TARP, as it was dubbed, should be called MARX. The notion of bailing out Wall Street after it got the country into the mess in the first place had almost no appeal, especially weeks before an election. Bush needed to calm down the conservatives, and for that there could be no better ambassador than Cheney.

Despite his conservative philosophy, Cheney expressed no hesitation about the bailout program, later calling himself a "strong supporter" of it. In fact, he and his team had little to do with the policy decision. "They were a nonfactor," said Matt Latimer, the speechwriter. But Cheney would help sell it. He climbed into his car at 8:45 a.m. on September 23, joined by Keith Hennessey, the president's economics adviser, and Kevin Warsh, a top Federal Reserve official, and headed to Capitol Hill to meet with the House Republican caucus. Never before had Cheney encountered such hostility from Republican lawmakers. One after another, House members excoriated the bailout. That didn't go so well, Hennessey said in the car on the way back. Cheney was unruffled, calling it a chance for lawmakers to blow off steam. But privately, he thought three-quarters of the caucus would vote against them.

Bush decided to address the nation and prepared a prime-time speech. But hours before he was to go on the air, he received a call from John McCain asking him to hold a White House meeting on the rescue package. The president was furious. Negotiations were at a delicate stage, and suddenly McCain was going to swoop in to save the day? It was "a stunt," Bush thought. Barry Jackson, his political adviser, was even blunter, calling McCain "a stupid prick." But Bush felt he had no choice and had to convene the meeting McCain had requested. "I could see the headlines: 'Even Bush Thinks McCain's Idea Is a Bad One,' " the president noted later.

He got Barack Obama on the phone to invite him as well. "McCain asked for this meeting and I think I have to give him this meeting and I need you to be here," he told Obama. The Democratic nominee thought the president sounded almost apologetic.

Bush decided to go ahead with the speech anyway. His staff prepared a text sticking to general principles so as not to step on the meeting now scheduled for the next day. But as Bush read it in the family theater, where he was rehearsing, he grew agitated.

"We can't even defend our own proposal?" he asked. "Why did we propose it then?"

He ordered more details put into the speech. "We're buying low and selling high," he said, meaning the toxic assets the government would purchase could still be turned around for a profit eventually.

When he returned to the family theater a few hours later, he read the revised text and was still unhappy.

Why wasn't the buy-low, sell-high concept in there? he demanded.

Because that was not really the concept, someone explained.

Bush was exasperated. "Why did I sign onto this proposal if I don't understand what it does?" he asked.

The president stalked out. He had never seemed more exhausted, his face more drawn, thought Latimer.

The truth was Bush understood it fine. But the proposal was changing faster than anyone could keep up. Paulson was already beginning to rethink the idea of purchasing toxic assets. Ed Lazear, the chairman of the Council of Economic Advisers, had concluded there were $3 trillion in such assets, too many to purchase, and had been urging instead direct infusions of funds to fortify the banks against the financial contagion. Paulson was increasingly worried that the original idea was impractical. The speechwriters were being told to keep light on the details to preserve flexibility, just as the bill itself had been kept vague.

By the time Bush arrived for the 9:00 p.m. speech on the State Floor of the White House residence, he had pulled himself together. He warned Americans that "our entire economy is in danger" and without the massive financial package he was advocating, now $700 billion, the country faced a financial panic, a further collapse in housing prices, spiraling markets, and vanishing credit, all followed by a long and arduous recession. Bush emphasized that "this rescue effort is not aimed at preserving any individual company or industry; it is aimed at preserving America's overall economy."

But he sounded almost as if he were trying to convince himself, almost as if he could not believe that an ardent capitalist would shuck six decades of beliefs for the most intrusive government intervention in the private marketplace of his lifetime. "With the situation becoming more precarious by the day," Bush said, "I faced a choice-to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all. I'm a strong believer in free enterprise. So my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances."

THE NEXT DAY, September 25, Bush tried to reassure nervous foreign partners that the bailout would ultimately pass. The issue had global ramifications, with much of the world waiting in suspense for Washington to act.

During a morning telephone call, Angela Merkel of Germany told Bush that banks in her country were watching carefully.

"I don't think Congress has a choice," Bush told her, "so I'm confident it will get done."

But when he hung up, he was still in the dark about McCain's intentions for the White House meeting he had demanded for later that day. Bush worried that the politics of the campaign could make an already difficult situation impossible to manage.

"What's McCain going to say?" Bush asked Ed Gillespie.

"We have no idea," Gillespie responded.

Bush summoned Paulson before the session. It was a damp, chilly afternoon, and the two of them, joined by Joel Kaplan, stood on the terrace outside the president's dining room, Bush chewing on an unlit cigar. Paulson told him that he had had a tense conversation with McCain earlier in the day, all but threatening the senator not to do anything to mess up the financial rescue. Bush seemed astonished by McCain's behavior and said he hoped he knew what he was doing.

"Hank, we are going to get this done," Bush said, summoning his resolve. "There has to be some way Boehner can work this, and maybe I can help with the House Republicans."

Heading back to the Oval Office, they were joined by John Boehner, the House minority leader, and other top Republicans. Boehner said he did not have the votes.

"We need to get there," Bush said.

"I'm trying," Boehner replied. "I don't have the support."

As the congressional leaders filed into the Cabinet Room at 4:00 p.m., Obama worked the room almost as if he already owned the place. McCain stood off to the side. Each took a seat at the polished mahogany table marked by a little white place card. To the president's left were Harry Reid, Mitch McConnell, and then Obama. To his right were Nancy Pelosi, Boehner, and then McCain. Cheney sat opposite Bush.

The president opened the meeting by warning of the consequences. "If money isn't loosened up, this sucker could go down," he said, meaning the entire American economy.

If that were not ominous enough, Bush asked Paulson to give his grim rundown of the situation.

Then, by protocol, Bush turned to Pelosi. "Madam Speaker?"

"Mr. President," she said, "Senator Obama is going to speak for us today."

Bush realized the Democrats had orchestrated their participation and sat back as Obama offered a sober assessment of the situation. "On the way here, we were on the brink of a deal," Obama said. "Now, there are those who think we should start from scratch." It was a trap, Bush realized, putting the blame on McCain for disrupting a deal that in fact was not really there yet. But the president was impressed with Obama's presence and discipline.

Bush turned to McCain. "I think it's fair that I give you the chance to speak next," he said.

"I'll wait my turn," McCain said.

Bush was dumbstruck. What's going on? This was McCain's meeting. He's just going to sit there and let Obama control the conversation?

The discussion began to devolve. Boehner proposed an alternative plan that his caucus would support, one involving less government intervention. Representative Barney Frank and other Democrats harangued him for failing to produce votes for a deal that House Democrats, Senate Democrats, and Senate Republicans all supported.

"I can't invent votes," Boehner protested. "I have a problem on my own hands."

Finally, about forty minutes into the meeting, Obama interrupted. "Can I hear from Senator McCain?" he asked.

McCain, speaking for the first time, offered generalities, saying the House Republicans had legitimate concerns that needed to be addressed without actually agreeing with them. To many around the table in both parties, it was clear McCain had no clue what he was doing.

Bush was singularly unimpressed and leaned over to Pelosi. "I told you you'd miss me when I'm gone," he whispered.

Within moments, everyone was speaking at once, challenging and baiting each other, talking past one another. Bush gestured with his hands, palms down, trying to calm the room. "It was almost like children sitting at a table throwing food at each other," recalled Eric Draper, the White House photographer. Cheney sat back and could hardly keep from laughing at the spectacle. Obama, he thought, had spoken with authority while McCain had added nothing of substance. It was unclear to Cheney why McCain had returned to Washington and demanded the meeting in the first place. The vice president was overcome with fresh worry for the Republican ticket.

"Well, I've clearly lost control of this meeting," Bush said, standing up to go.

As he left the room, Bush shook his head. That was a joke, a circus, he told aides. What was going on with McCain? "That was the most ridiculous meeting I have ever been a part of," Bush said.

Paulson left the room panicked that the chances of agreement were slipping away. He chased the Democrats into the Roosevelt Room, where they had retreated to confer before going out to the cameras. Somewhat in jest, but trying to make a point about how desperate the circumstances were, Paulson found Pelosi and got down on one knee to beg her to give him time to make it work.

"Gee, Hank, I didn't know you were Catholic," she said with a laugh.

"Don't blow this up," Paulson implored her.

"We're not the ones trying to blow this up," she retorted.

"I know," he said resignedly. "I know."

WHEN THE HOUSE started voting on the bailout program at 1:25 p.m. on September 29, Bush stepped out of the Oval Office to watch on the television in the area where his secretaries sat. The television showed the rolling total as members cast their votes, and the figures looked bad from the start.

Rank-and-file lawmakers were staging a shocking revolt, defying the president, the nominees of both parties, and congressional leaders from both sides of the aisle. In an election year, they were unwilling to vote for hundreds of billions of taxpayer dollars to rescue Wall Street.

"They're not going to get the votes," Bush muttered to no one in particular. "These guys would have voted already."

The markets agreed; without waiting for the voting to finish, investors began selling off, and prices plunged at alarming rates. With each passing moment, billions of dollars of investment value were disappearing. At one point, a Democratic congressman on the floor shouted out the news. "Six hundred points!" he yelled, pointing his thumb downward to indicate the collapsing stock market. The fifteen-minute period for voting expired, but leaders clutching lists of swing members kept the roll call open as they desperately tried to corral a few more votes, all for naught. After another twenty-five minutes, it was over.

As Bush watched from the West Wing, the package went down 228 to 205 with two-thirds of his fellow Republicans voting against it. It was a seismic event. Nearly eight years into his presidency, it was the most decisive congressional repudiation of Bush's leadership-and one with enormous consequences for the country. By the time the day was done, the Dow Jones Industrial Average had plummeted 777 points, the largest single-day point drop in American history. Both sides pointed fingers. As the defeat sank in, a grim Bush called his secretary.

"Let's get Hank back over here," he said. "Get our team together. We got to get back at this and get it done."

Paulson was on edge. He saw the abyss. "Mr. President, this could be worse than 9/11 if we don't do something," he said.

Bush was calm and reassuring. Aides watching him thought he was at his best in a crisis when those below him needed lifting up. His bottomless supply of confidence, no matter how much trouble it had gotten him into in other circumstances, proved reassuring to his staff at those moments.

Bush had let Paulson run with the proposal but believed it was now time to have the White House take over. The Treasury secretary was the expert on finances, but the president's staff was more experienced in working its will on Capitol Hill. "Give us the ball for twenty-four hours," Joshua Bolten told Paulson. "Let us try to figure out how to get this together and get it done."

With lawmakers spooked by the stock market nosedive, Bolten and his team negotiated relatively minor changes in the legislation to give them cover to switch votes. And this time they would vote first in the Senate, where more members were insulated from the pressures of the upcoming election and were traditionally less populist than the House. Cheney implored Republican senators during a meeting in the walnut-paneled Mansfield Room on October 1. "If you don't pass this," he said, "you're going to make George W. Bush into the Herbert Hoover of the twenty-first century."

The Senate passed the slightly revised $700 billion plan 74 to 25 later that day, with both Obama and McCain voting yes. The House followed suit, approving it 263 to 171 two days later, on October 3. Twenty-six Republicans switched to support their president, although a majority of the party still voted no. House officials raced the bill to the White House. Within ninety minutes of the vote, it was on Bush's desk in the Oval Office. He pulled out a pen and signed it without ceremony.

Satisfied, he brought his aide Tony Fratto out to the back patio behind the Oval Office, and the two smoked cigars to mark the hard-won victory.

THAT WEEKEND, BUSH took David Petraeus up on his challenge, bringing the general to Fort Belvoir in suburban Virginia for a vigorous mountain bike ride. Petraeus, decked out in black, brought his son and thought they could keep up with the sixty-two-year-old president. But a bike ride with Bush was not for the faint of heart. As the trail suddenly narrowed, the Secret Service agents riding behind the president would not yield, and Petraeus found himself heading right into a tree. His son also fell off at one point and broke a little finger. "I realized this is not a social occasion," Petraeus said later. That evening, while out with his son for pizza after stopping by Walter Reed Army Medical Center to get the young man's finger treated, Petraeus found his phone ringing. "It's the president checking on our son," he remembered.

With time running out, Condoleezza Rice pressed for one move regarding Iran. For months, she had been urging Bush to open a U.S. interests section in Tehran, an office short of a full-fledged embassy that could issue visas and monitor events. Rice argued that it was not a favor to Iran; if anything, it was a poison pill-an outpost allowing them to encourage Iranians to travel to the United States and to gather firsthand information about what was happening inside the country. Cheney argued against it, deeming it a reward for bad behavior.

In this case, Bush leaned toward Cheney. "How important is this to Condi?" he asked Hadley pointedly. "Does she really think this is the right thing to do? Is this the State Department speaking?"

"This is something Condi really believes in," Hadley told him.

Bush rolled his eyes, but he did not tell Rice no. That was never easy for him.

Hadley eventually realized that it fell to him. After the third time Rice pressed Bush on the proposal, Hadley called her. "You know, Condi, you may be able to get the president to do this because he has great regard for you," Hadley said. "But I have to tell you, he really doesn't want to do it, and he just thinks it is a bad way to end Bush administration policy on Iran."

Rice got the message and a couple of days later told Bush she would drop it.

"Thanks," he said. "I just don't think it is the right thing to do."

"I disagree with that, Mr. President," she said, "but I respect you."

Cheney won one more small victory in the twilight days of the Bush presidency when two dozen Special Forces soldiers in Black Hawk helicopters swooped into Syria six miles across the Iraqi border and killed an al-Qaeda leader named Abu Ghadiya, leader of the network that smuggled foreign fighters into Iraq. Cheney had been pressing for months for someone to go after him, only to be told the intelligence was not definitive enough. For a while, the agencies were not even sure of his name and had no pictures. Then finally a raid on an al-Qaeda hideout captured files proving the connection. For Cheney, it was one small validation in a period of repudiation. He was, said one aide, "quite pleased."

36.

"I didn't want to be the president during a depression"

Barack Obama was elected president on Tuesday, November 4, capitalizing on the deep unpopularity of the incumbent in a country tired of war and frightened of financial collapse. Despite his partisan sentiments, President Bush was deeply moved by the historic significance of an African American winning the presidency for the first time.

Even many onetime Bush loyalists got caught up in the moment. Colin Powell voted for Obama, as did Richard Armitage, Scott McClellan, and Matthew Dowd. Jim Wilkinson, who was counselor to Henry Paulson and a self-described rock-ribbed conservative, voted for Obama after watching up close how the two candidates handled the financial crisis. Kenneth Adelman, once a vocal advocate of Bush's war in Iraq, voted for Obama. Neither Paulson nor Condoleezza Rice would say whom they voted for, leading some to assume they too backed Obama.

Bush made clear to his staff that he wanted a seamless transition, and indeed Joshua Bolten had been working for months mapping out a handover of power that would be the most cooperative ever between presidents of different parties. Bush invited Obama to the Oval Office for a long talk while Laura Bush gave Michelle Obama a tour of the residence. The White House produced more than a dozen contingency plans for Obama in case an international crisis erupted in the opening days of his administration, when he would still be short-staffed and not fully prepared. The memos envisioned all sorts of volatile scenarios, like a North Korean nuclear explosion, a cyberattack on American computer systems, a terrorist strike on American facilities overseas, and a fresh outbreak of instability in the Middle East.

The most important thing Bush believed he could bequeath to Obama was a strategic framework agreement with Iraq finally outlining the end of the war. Bush wanted the pact to keep troops there until the end of 2015, while Prime Minister Nouri al-Maliki wanted them out by the end of 2010. After months of painful haggling, they reached an agreement requiring American troops to withdraw from Iraqi cities by the end of June 2009 and to pull out of the country altogether by the end of 2011. The agreement was controversial inside an administration that had spent years resisting any kind of timetable in Iraq. Ed Gillespie opposed it, calling it an "eviction notice." But Bush signed off on it after David Petraeus and his successor, General Ray Odierno, endorsed it.

Unlike the timetables Democrats wanted to impose in 2007, this withdrawal schedule came after conditions on the ground had improved. Just 14 American troops were killed in October, down from 126 in May 2007. Odierno told Bush that troops could come home with honor. Bush and Maliki finalized the agreement on November 17. Bush hoped it would make it easier for Obama to finish the war in Iraq without feeling pressured to withdraw abruptly. At the same time, he had effectively set Iraq policy for the first three-quarters of his successor's term.

On the same day, Bush found himself making one of the most unexpected telephone calls of his presidency. When he arrived in Washington in 2001, he never imagined he would exchange pleasantries with Colonel Muammar el-Qaddafi, the Libyan dictator once dubbed by Ronald Reagan "the mad dog of the Middle East." But Qaddafi, in keeping with the rapprochement with the West, had provided $1.5 billion to victims of past Libyan terrorism, including the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland. The phone call was organized to mark the moment and to try to keep momentum. Just two months earlier, Rice had visited Qaddafi in Libya, where he presented her with a creepy video showing pictures of her with other world leaders set to the tune of a song he had a musician write for her, "Black Flower in the White House." At least Bush would not have to worry about anything like that.

"Colonel Qaddafi?" Bush said on picking up the phone. "George Bush here."

"I'm happy by this telephone call," Qaddafi answered.

"I'm calling to confirm the fact the agreement has been concluded," Bush said, "and now we have a chance to get our relations on a much better basis."

The president called it the "basis of a new beginning" and noted that Qaddafi's son Seif would be welcomed by the administration in Washington the next day. "Good to hear your voice."

Qaddafi said he too was "happy to hear your voice" and called it a "historic moment" between the two countries.

"We still need you in the international affairs of the world," the Libyan added. "Even though you are stepping down, the world needs you." He said he hoped to meet in the future.

Bush responded that he was looking forward to retirement in Texas. "Kind to take my phone call," he added. "Perhaps our paths will cross someday. In the meantime, I ask for God's blessings on you and your people."