A potent mix of domestic controversy and potential scandal faces President George Bush as the political season opens for the new year. It comes after several months of stratospheric popularity for his conduct of the military campaign against those who organised the attacks on New York and Washington on September 11th 2001.
This week's revelations of detailed contacts between his administration and executives of the giant energy company Enron - before it went bankrupt - could become very troublesome, no matter what measures he takes to mitigate the devastating impact its collapse has had on pensioners and shareholders.
Americans vote in midterm elections next November and already the lines of political division are being laid down, as the consensus arising from US military engagement in Afghanistan recedes. Taxation and budgetary policies loom large, following Mr Bush's $1.35 trillion tax cut, pushed through Congress with the help of 12 dissident Democrats. The Senate Democratic leader, Mr Tom Daschle, has made the cuts the centrepiece of a renewed attack on the Bush administration, saying they are eroding the budget surplus inherited from President Clinton and represent a massive subsidy for the richest taxpayers who will benefit most from them. While this exposes divisions in his own party, the calculation is that voters will take due account of the criticism. The Democrats need a swing of only six seats to control the House of Representatives.
By election day, the Enron affair may well have become a much more important determinant of Republican popularity. Based in Houston, Texas, its leading executives are on intimate terms with many members of the Bush administration and contributed most of the company's political funds to his election campaign, making it the principal donor to the Republicans. A raft of enquiries, initiated this week, will concentrate on whether contacts between Enron and the administration unduly affected its energy policy or sought favours when the company came under threat.
The administration vigorously denies either charge, but the spectacle of corporate greed combined with pro-business policies could, if prolonged, erode the sense of purposeful leadership constructed by Mr Bush since the September 11th attacks. It is scandalous that thousands of workers and investors should be left stranded without pensions or income while executives off-loaded plummeting shares. The admission by the accounting firm, Arthur Andersen, that it has destroyed records is equally disturbing.
Mr Bush is set to propose a budget which will bring back deficits and re-order priorities to take account of the costs of fighting a war against terrorism and the need to kick-start the economy. If the economy does recover as quickly as many expect, it will be much easier for him to maintain the popularity and authority arising from the war. But his self-proclaimed compassionate conservatism will not survive expected cuts in social and medical programmes. Much of his domestic agenda seems to be driven by a need to placate right-wing Republicans who still suspect he will not keep his promises. It is back to real politics after the short interlude of war.