WITH THE HOLIDAYS approaching, Bush hosted the annual Kennedy Center honors at the White House on December 7. Among the honorees was the actor Morgan Freeman. Wearing a tuxedo and standing in front of a massive Christmas tree, Bush cited the actor's many credits, including Deep Impact, in which Freeman played a president confronted by a civilization-ending comet strike against the earth.

Bush looked up from his notes with a sardonic look on his face. "About the only thing that hasn't happened in the last eight years," he ad-libbed, to laughter and applause.

When he took his seat again, Rice leaned over. "Don't tempt fate," she said. "We've still got a few weeks left."

Indeed, while not a killer comet, Bush did face one final crisis in his last weeks as the auto industry teetered on the edge of bankruptcy. The chief executives of General Motors and Chrysler asked Washington for $25 billion in federal loans, then just seventeen days later increased the request to $34 billion.

Bush pushed his staff to negotiate a temporary solution with congressional Democrats, advancing an idea from Joel Kaplan to appoint a financial viability adviser, or car czar, who would have the power to ensure that the auto companies restructured in exchange for federal loans. The White House reached agreement with Nancy Pelosi on a bill that would provide $14 billion from an existing fund dedicated to promoting advanced technology vehicles and give the firms until March to produce plans to turn themselves around. Cheney opposed the plan. Unlike the bank bailout, which he saw as needed to save the economy as a whole, the auto bailout was rewarding private firms that made bad choices.

But having made his case and lost, Cheney agreed to defend the move on Capitol Hill. "If he told me he made a decision, there were very few times where I would say, 'Well, I think that is a really dumb idea, Mr. President,' " he recalled years later. "That is not the way I worked. There was a time to argue and a time to say, 'Yes, sir.' Once he decided it, then he would go to work and away we go." The loyal soldier appeared at the weekly lunch of Republican senators on December 10, only to be slapped down. Senator Bob Corker, a Tennessee Republican, called the auto plan far too weak. "There is no way in heck that I would support this," he declared. If the automakers wanted their help, he said, they would have to take drastic action like cutting debt, restructuring health care, and trimming wages. Other Republicans said they would oppose any bailout on principle. By the time the Bush-Pelosi bill passed the House that night 237 to 170, it was irrelevant because Corker had taken over the issue in the Senate.

Bush welcomed Paulson into his private dining room off the Oval Office for lunch the next day. Kaplan joined them. As Bush ate small carrots, a chopped apple, and a hot dog, he listened to Paulson make the case that the automakers had not prepared for an orderly bankruptcy. While they had been bleeding slowly for years, the financial crisis had propelled them toward the cliff faster than anyone had anticipated. When Corker's Senate negotiations fell apart that night, the president decided to step in. The next morning, December 12, as he flew back to Texas to give the commencement address at Texas A&M University, Bush issued a statement through his press secretary expressing disappointment that Congress had failed to pass an auto rescue package and vowing to "consider other options if necessary-including the use of the TARP program-to prevent a collapse of troubled automakers."

AFTER THE COMMENCEMENT address, Bush headed to the ranch, providing another opportunity to slip away unnoticed for one last secret trip to Iraq. He landed in Baghdad on December 14 for his fourth visit, having flown around the world to cap his long effort to redeem the ill-fated war he had started. By most measures, it was a different Iraq from the one that had descended into the abyss in 2006. Violence was down, political institutions were developing, and Bush could arrive in the light of day instead of in pitch darkness. Most important, Bush would sign the strategic framework agreement that would lay out the plan for finally ending the war.

The arrival ceremony at the palace, complete with red carpet, marching band, and matching Iraqi and American flags, stirred Bush. Maybe something good would still come out of all this. Bush greeted Nouri al-Maliki like a long-lost brother. The doubts of two years earlier, when Stephen Hadley had written his memo questioning Maliki's fortitude, had disappeared. Bush beamed as Maliki kissed his cheeks.

"I remember what it was like in 2006, and it was bad," Bush recalled. "Now it's better. And you did it."

"We did it together," Maliki said.

Bush alluded to the American doubts about Maliki. "You know, they used to ask me, 'Where's the Iraqi Karzai?' " Bush said. "Karzai's got a pretty face, speaks English. Now they ask me, 'Where's the Afghan Maliki?' Afghanistan needs a Maliki."

It was a bit of flattery, of course, if somewhat awkward, but it also reinforced a defining truth for Bush as he was closing out his term. He had finally turned around Iraq, only to watch Afghanistan unravel in these final months. Sitting on his desk back at the White House was a request for more troops in Afghanistan, a request he would leave to his successor.

But this was not a moment for regrets after years of crises and challenges. Bush finally had something to celebrate.

"Look, I only got a few weeks left," Bush told Maliki. "You'll still be here, but I'll be down in Texas, rockin' on the porch. Never got you to Texas, right?"

"No," Maliki said. "I was quite busy here."

"It's like Iraq," Bush said. "We got desert, oil, tough folks, lots of guns."

"No place is like Iraq," Maliki said. "There's no place like Iraq, believe me."

Maliki held Bush's hand as he led him into a reception room to sign the agreement. A large table with a velvet cloth sat waiting for them with two leather binders holding reciprocal copies of the agreement and a couple of fancy pens. Next to the table were twin wooden lecterns in front of a bank of alternating American and Iraq flags. The room was packed with Iraqi and American journalists.

Suddenly, as they stood at the lecterns, someone was screaming, and something came hurtling at the president. Brett McGurk, the presidential adviser who had negotiated the agreement, thought it was a suicide bomber and assumed they were all about to die. Bush instinctively ducked to his left and the object sailed over him. He realized it was a shoe, thrown by one of the Iraqi journalists in the audience.

"This is the farewell kiss, you dog!" shouted the journalist, who then threw his other shoe. "This is from the widows, the orphans and those who were killed in Iraq!"

This time, Maliki reached out to try to block it, and Bush needed only to turn to the side a bit to dodge the shoe. For Bush, it seemed to happen in slow motion.

The room erupted in chaos as Iraqi security men pounced on the thrower. Don White, the president's lead Secret Service agent, leaped toward him, but Bush waved him off, unwilling to make the incident worse than it already was.

"I'm okay," Bush told the agent.

But his press secretary was not. As White rushed to Bush's side, he knocked into a boom microphone, which struck Dana Perino squarely in the eye. She was escorted out of the room, both hands clutching her head.

For Arabs, showing someone the bottom of a shoe is one of the most profound displays of disrespect, and throwing it at someone much worse. On the day Baghdad was liberated in 2003, Iraqis had slapped the fallen statue of Saddam Hussein with their shoes. Now Bush was the one targeted. Maliki "was white as a sheet," noticed Eric Draper, the White House photographer. But Bush tried to make light of it, smiling and motioning his hands down to calm the other Iraqi journalists, who were apologizing profusely.

"Don't worry about it, don't worry about it," Bush kept saying.

He made a joke. "If you want the facts, it's a size 10 shoe that he threw," Bush said.

The two leaders then signed the documents and proceeded upstairs for a celebratory banquet. Bush aides could hear the shoe thrower screaming as he was pummeled in another room. "Maliki's guards start beating the hell out of this guy," Douglas Lute recalled. "You can hear them laying in the blows." Secret Service agents intervened to spare the man, but to Lute it was a depressing metaphor. "You could capture the whole experience of America and Iraq. You have all the best intentions, so much hard work over the past five years, and it really comes down to the fact that the Iraqis are going to be Iraqis and they'll continue to whale on one another."

Bush tried to avoid letting the episode mar a day of triumph. Maliki was angry and embarrassed, pounding his right fist into his left hand and fuming as Bush and Ryan Crocker, the ambassador, reassured him. "He was almost inconsolable," Lute recalled.

"Hey, please, don't worry about it," Bush told Maliki. "You're making history. That guy's just a momentary thing."

Maliki apologized repeatedly. "Mr. President, you're my guest. This is my home. Please forgive the act of this man. He does not represent Iraq."

Bush brushed it off again and insisted they eat, whereupon Maliki gave a toast that focused on the shoe thrower. "That man, he represents the past," Maliki declared. "He represents everyone who has lost."

By the time Bush got back on Air Force One to head to Afghanistan, he was insisting to everyone that it was no big deal. But aides could tell he was down. The pride and bounce from earlier in the day were gone. After several hours in Kabul, he boarded the plane for the long flight home, wrapping up his final overseas trip as president. As was tradition, he and his staff watched a slide show of pictures taken by Eric Draper on the trip. Draper had captured a series of shots of the shoe whooshing toward the lectern as Bush ducked.

"Good reflexes," Joshua Bolten called out, trying to keep the mood light. Bush did not laugh. "All right," he said flatly. "Next slide."

WHILE AIR FORCE ONE made its way back from Afghanistan, Bush's economic advisers finished a memo outlining four options for the auto industry. The first would provide loans from the TARP fund in exchange for the appointment of a car czar who would require financial viability plans by March. The second would provide loans with the conditions Bob Corker had tried to attach in the Senate requiring the automakers to reduce debt, rewrite work rules, and trim wages. The third would force the companies into immediate bankruptcy and use TARP funds to finance a reorganization. And the fourth would be to do nothing and leave the firms to their fates.

Bush sat down in the Oval Office for nearly an hour and a half to discuss the alternatives. Cheney opposed a bailout and grilled the economic advisers. While the collapse of the auto industry would be damaging, potentially costing 1.1 million jobs, Cheney did not think it would be equivalent to the unraveling of Wall Street and so it did not merit taxpayer intervention. Keith Hennessey, the president's chief economics adviser, agreed. But others, including Ed Lazear, chairman of the Council of Economic Advisers, and Carlos Gutierrez, the commerce secretary, argued they could not let the firms go into Chapter 11 bankruptcy because there was no private financing available to help them restructure. Without federal funds, the result would instead be Chapter 7 liquidation. Henry Paulson and Joel Kaplan favored the second option, giving the companies loans but forcing them to meet the tough Corker conditions. The failure of the automakers, they argued, would cascade through networks of suppliers and dealers at a moment when the economy could ill afford it.

Bush said he would think about it. Paulson urged him to think fast and within a day began pestering Kaplan to find out if the president had made up his mind.

"Look, Hank, you have to give the president time on this decision," Kaplan said. "This is a difficult decision."

"It's not a difficult decision," Paulson replied. "It is an unpleasant decision, but it is not difficult." And, he added, "It is not going to get less unpleasant with more time."

"I hear you, Hank," Kaplan said. "But another twenty-four hours for the president to make a decision like this is not unreasonable."

The issue vexed Bush more than TARP for the reasons Cheney had outlined. As a former businessman, Bush believed a company that did not give consumers what they wanted, entered into bad contracts, and made other flawed decisions deserved to fail. That was how the market separated the strong from the weak. Yet with time running out, the argument that resonated most with Bush was not leaving a mess for his successor. Barack Obama had the right to make this call but should not have to make it in the first hours after taking the oath before even figuring out how the phones worked.

Bush, who normally kept his decision making private, wrestled with the issue out loud on the morning of December 18. Appearing before the American Enterprise Institute, he laid out the conflicting pressures on him. "This is a difficult time for a free-market person," he told the institute's president, Chris DeMuth, who interviewed him onstage. "Under ordinary circumstances, failed entities, failing entities, should be allowed to fail. I have concluded these are not ordinary circumstances, for a lot of reasons." He went on to defend his decision on TARP, explaining that the failure of a major financial institution would have "a ripple effect throughout the world" and hurt average people. Recalling Ben Bernanke's warning, Bush said, "I analyzed that and decided I didn't want to be the president during a depression greater than the Great Depression, or the beginning of a depression greater than the Great Depression. So we moved, and moved hard."

As for the auto industry, Bush said the firms "are very fragile" and that he "worried about a disorderly bankruptcy and what it would do to the psychology" of the markets. He did not want to be "putting good money after bad" in untenable enterprises, but he was spending his days imagining what it would be like for Obama taking over the country at such a perilous moment with none of the experience Bush had accumulated the hard way over eight years. "I've thought about what it would be like for me to become president during this period," he mused. "I believe that good policy is not to dump him a major catastrophe in his first day of office."

He made his mind up later that day. Rejecting Cheney's advice, Bush decided he would provide enough money through TARP to get the companies through March. But in a hybrid of the first two options, he insisted they produce plans by then to return to financial viability or risk having the loans called and being forced into bankruptcy. At Keith Hennessey's suggestion, Bush decided against dictating specifically how they fix their problems, recoiling at government getting into the details of how businesses should be run. Instead, he would make the Corker conditions nonbinding as a road map to how the firms should repair themselves; if they wanted to deviate from the Corker ideas, they would have to demonstrate they could achieve the same results. Finally, rather than appoint a car czar, he would have the Treasury secretary oversee the situation. He called Paulson to tell him his decision. It was inelegant, perhaps, and contrary to his own principles. Had it been six months earlier, the decision might have been different.

At 9:00 a.m. the next day, December 19, Bush marched into the Roosevelt Room to announce the decision. The $17.4 billion in loans would become the largest industrial bailout of its kind in American history. "In the midst of a financial crisis and a recession," Bush explained, "allowing the U.S. auto industry to collapse is not a responsible course of action."

By chance, that night Bush hosted the annual holiday dinner for his senior staff. Joshua Bolten stood and led a toast, reviewing the history of gifts the staff had given the president at Christmas over the years.

"And this year, Mr. President," he said, "we chipped in and we bought you Chrysler."

BUSH HOSTED THE world's most exclusive club on January 7, inviting Obama and the three other living presidents to lunch to share their wisdom and experience. The Wall Street bailout had arguably headed off another Great Depression and stabilized the situation, but the country still faced deep problems. Soon Bush would hand them over to Obama, and he was doing what he could to help his successor. Obama was grateful to Bush for how he was handling the transition and expressed no second thoughts about any of the decisions the outgoing president made during the interregnum. "Bush has been extraordinarily gracious toward us," said David Axelrod, Obama's senior adviser.

Joining Bush and Obama that day were Jimmy Carter, Bill Clinton, and the president's father, George H. W. Bush. Clinton, to no one's surprise, did most of the talking. Carter stood off slightly to the side, awkward even with fellow Democrats. The outgoing president was a little antsy. He struck Obama as relieved, clearly ready for the weight of the presidency to be lifted from his shoulders and to escape to Dallas, where he and Laura had bought a retirement house near the site of his future presidential library at her alma mater, Southern Methodist University.

Whatever relief Bush felt, he refused to feel sorry for himself, at least publicly. During his final news conference on January 12, he mocked the phrase "burdens of the office," as if anyone should feel bad for the most powerful man on earth.

"You know, it's kind of like, why me?" he said sarcastically. "Oh, the burdens, you know. Why did the financial collapse have to happen on my watch? It's pathetic, isn't it, self-pity?"

The next day, he invited a group of historians to the Oval Office, including John Lewis Gaddis, Jay Winik, Allen Guelzo, Walter McDougall, and Michael Barone. He was thinking about his memoir, and the historians offered thoughts about how to write it, while Chris Michel, a speechwriter who would help with the book, took notes. Bush's father had never written a traditional memoir, instead publishing a compilation of letters written over a lifetime and a separate foreign policy book with Brent Scowcroft. The younger Bush was mulling a book that, rather than a cradle-to-grave biography, would focus on a series of important decisions and how he confronted them. He had read Clinton's loquacious memoir and wanted something crisper. He mentioned Ulysses Grant's memoir, generally considered the best among presidents, and the historians told him it was a classic because it was spare and unadorned. McDougall also mentioned Harry Truman, who used his book to "remind and explain" after a presidency beset by crisis. Guelzo suggested he focus on four themes: the election and recount; the war on terror; his initiatives in education, faith-based programs and AIDS in Africa; and an articulation of conservatism that understands what government can and cannot do.

It was a long meeting, and Bush was in no hurry. He seemed eager to make sense of his eight years. Some of the visitors were struck by how serene he seemed after everything that had happened. "The presidency did not eat him up or beat him down," Gaddis recalled. "He was still upbeat and optimistic and energetic, as much as when I met him the first time five years earlier." Gaddis had been one of the inspirations for the second inaugural address vow to seek the end of tyranny, only to be disappointed that Bush "never really did anything with the idea." But he respected Bush for his conviction and fortitude.

At one point, one of the historians mentioned Cheney. Bush seized the moment to make a point, saying with a laugh that outsiders imagined his vice president exerted more influence than he really did. He pointed to a telephone on a table beside the sofa and said too many people had the impression that all Cheney had to do was call him up and he would do whatever he was told. He rattled off a series of decisions where he had overruled Cheney, even citing dates. Unknown to the historians, Bush and Cheney at that moment were wrestling over the possible pardon of Scooter Libby, but it was clear the president did not want anyone walking out thinking his vice president had been in charge. "It just came out very quickly," Gaddis said. "He was determined we got that point."

37.

"Such a sense of betrayal"

The clemency process had long left a sour taste in President Bush's mouth. His father had been heavily criticized for issuing a series of politically charged pardons in his final weeks in office, most notably to Caspar Weinberger, the former defense secretary under investigation in the Iran-contra affair. Bill Clinton had left office in scandal over his last-minute pardons of a series of sordid characters, including his half brother, Roger; his former business partner Susan McDougal; and, most notoriously, the politically connected financier Marc Rich, who had fled the country to avoid tax fraud and racketeering charges. (Among Rich's lawyers at one point? Scooter Libby.) Bush had not forgotten being kept waiting in his motorcade after church on the morning of his own inauguration eight years earlier because Clinton was not ready to receive him for the traditional White House coffee after spending much of the previous twenty-four hours signing pardons.

Bush was so turned off that he became one of the stingiest presidents in American history when it came to executive clemency. Over the course of eight years, he granted just 189 pardons and 11 commutations, far fewer than any president in at least a century, with the exception of his father. Further coloring the process heading into his final days in office was a little-noticed debacle. Two days before Christmas, the president issued a series of pardons, including one for Isaac Toussie, a Brooklyn developer who had pleaded guilty to mail fraud for falsifying documents for would-be home buyers seeking government-backed mortgages. Toussie's case did not qualify under nonbinding Justice Department guidelines, and the pardon attorney who typically reviewed all applications before they were sent to the president never examined the case. But Toussie had hired Brad Berenson, a former Bush White House lawyer, and the man's father had given $28,500 to the Republican National Committee in April plus another $2,300 to the presidential campaign of John McCain.

When the New York Daily News reported the contributions, Joshua Bolten called Bush at Camp David to tell him. The president was already there for Christmas with his family, their final holiday at the presidential retreat. He was irritated. How had they let this happen? This made it look as if he were doling out pardons for political contributors, much as Clinton had seemed to do. Bolten was just as angry.

Bolten found William Burck, the deputy White House counsel.

"Figure out some way to undo this," Bolten told him. "Find out when a pardon is effective. Has the president signed the orders?"

"Yes."

"Have they been notified?"

"Yes."

"Have we announced it?"

"Yes."

Bolten told Burck to research the matter. Burck came back and said a pardon would not be effective until it was delivered to the recipient.

"Where is it?" Bolten asked.

"It's in the pardon attorney's office, and he's gone home for the weekend."

"You call him up," Bolten said. "You meet him as early as he's willing to come in on Saturday morning and you stand outside his office until he shows up and you don't let anybody in or out until you retrieve that pardon grant."

Burck went to the Justice Department to personally retrieve the pardon. "This is a good decision," the Justice Department lawyer who handed him the documents said, "because I don't know if anybody could survive this."

Fred Fielding, Burck's boss, then fell on his sword in a public statement explaining that he had been the one who reviewed the application and recommended it to the president. The only saving grace was that because they did it on Christmas Eve, the reversal drew relatively little attention. For once, the Bush team had caught a break.

But it only reinforced Bush's feelings about the system. "This process is broken," he railed to aides. "It is broken. It doesn't make any sense. Why is it that somebody who knows somebody in the White House gets to have a better shot than somebody who doesn't know somebody in the White House?" It irritated him even more that he was coming under pressure from all directions that season. His lifelong friend Joe O'Neill had written him a letter on behalf of a bank officer who had served time for falsifying documents and was now dying. Another childhood friend from Texas, Charlie Younger, pressed him to pardon a fellow doctor who had served time on child pornography charges. Clay Johnson, his Yale friend and White House aide, was lobbying Bush to commute the sentence of David Safavian, an administration official convicted in the Jack Abramoff lobbying scandal. Supporters importuned Bush on Scooter Libby's behalf in the receiving line at White House Christmas parties. Bush deflected them. "Not a chance," he told Younger.

FOR VICE PRESIDENT Cheney, the Libby situation was aggravating. He was bitter that Richard Armitage had admitted to prosecutors that he was the one who originally leaked Valerie Wilson's identity, and yet neither he nor Colin Powell told their colleagues that. "The Powell-Armitage thing was such a sense of betrayal," Liz Cheney said. "They sat there and watched their colleagues in the White House-Scooter and everyone else-go through the ordeal of the investigation, and all that time they both knew Armitage was the leaker." Armitage and Powell maintained they were constrained by lawyers who told them to keep silent. Besides, Armitage said, he was not the one who put others in jeopardy. "I didn't have anything to do with Scooter and Karl," he said.

Aware that his chances were grim, Libby contacted Bolten to ask if he could talk with Bush directly, man-to-man. It seemed like the Texas thing to do.

"I'm sorry, Scooter," said Bolten, who considered Libby a friend. "In fairness to the president, I can't permit that."

Then Cheney went to Bolten.

"Scooter would like to visit with the president."

"I know," Bolten said. "I've already told him no."

"I'm asking you," Cheney said.

Bolten stuck to his guns and said no.

"I'd like you to ask the president directly," Cheney said finally.

"I wish you wouldn't ask me to do that," Bolten said, "but obviously the president would not want me screening him from any request of yours."

In the end, Bush backed up Bolten, refusing to see Libby. Bolten suggested Libby see the White House lawyers instead.

On the final weekend of the administration, as Bush retreated to Camp David for his last getaway, Libby sat down with Fred Fielding and William Burck in a booth at McCormick & Schmick's, a chain seafood restaurant on K Street a few blocks from the White House. It was just after 11:00 a.m. on a weekend, and they hoped no one would recognize them.

For the next ninety minutes, Libby made his case, but the White House lawyers were not swayed. Uncomfortable grilling a former colleague, they nonetheless started going through the evidence. Isn't it possible? What about this witness? No, Libby insisted. The point was not what was in the trial record but what was not. The prosecutors had suppressed expert testimony about the unreliability of memory that Libby was sure would have exonerated him. They should look at that, he insisted.

Then Fielding and Burck raised another point: pardons in the modern era were typically issued not to people claiming to be innocent but to convicts who had paid their debts to society and were seeking forgiveness. Under Justice Department guidelines at the time, the pardon attorney who prepared recommendations for the president did not even accept requests until at least five years after applicants had completed their sentences. That did not mean a president could not pardon someone who did not fit that criterion-under the Constitution, the president's pardon power is virtually without limit-but it indicated what was considered an acceptable case for a pardon.

Fielding and Burck asked Libby if he would be willing to admit guilt and ask for forgiveness to obtain a pardon.

No, Libby said. "I am innocent. I did not do this."

FOR A MAN about to win his own freedom, Bush was awfully grumpy. He was at Camp David on that frigid final weekend to mark the end of his presidency and the beginning of a new life back in Texas. With him were his family and a few select friends and advisers, including Bolten, Condoleezza Rice, Henry Paulson, and Stephen Hadley. He had been looking forward to this moment for some time.

If other presidents were reluctant to give up power, Bush was eager to escape Washington and the burdens of an administration that had been consumed by terrorism, war, natural disaster, and now a financial crash rivaling the Great Depression. For this final weekend at the retreat in the Maryland mountains, he planned to celebrate, to focus on the triumphs, not the setbacks, to reflect and remember and soak in his dwindling hours in office. But he was distracted. His mind kept wandering back to his fight with Cheney.

While the rest of his clan was in another room, Bush found a telephone and called Dan Bartlett back in Texas.

"This sucks," Bush said. "Here I am, supposed to be trying to have a great weekend with my family, last weekend, and here I am knowing what a difficult decision it is going to be."

Bartlett reassured him. "You are making the right decision," he said.

Still, Bush's advisers were worried. Bolten felt he had failed the president because he should have protected him from having to confront his own vice president. Rice, who was closer to him than any other adviser, watched Bush as he sulked in the living room of Laurel Lodge and thought he needed to be shaken out of his funk.