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Can Kerry Come Back From His Silent Spring?

Democrats who once liked their chances against George W. Bush are now repeating a gloomy mantra as they observe the somnolent scurryings of presumptive Presidential nominee John Kerry: "He should be cruising, so why's he snoozing?"

No doubt about it, Kerry should be scoring. He charged out of the primaries with a party united in loathing for the President and widespread admiration for Kerry's Vietnam War record. Since then, Bush has been buffeted by an insurgency in Iraq, an embarrassing inquiry into the September 11 attacks, and blockbuster books that raise questions about his Administration's national security competence. But instead of pulling ahead, Kerry is sleepwalking. "Voters have serious doubts about Bush but are not yet connecting with Kerry," says Lee M. Miringhoff, director of the Marist College Institute for Public Opinion poll, which shows Bush leading, 47% to 44%.

Democratic activists worry that Team Kerry has blown an opportunity to extend his early lead by reacting slowly to a $60 million GOP ad blitz and getting bogged down in ancient debates about Vietnam protests. On the stump, Kerry often lapses into the droning, stilted tones of Senate debate, forgetting the feistier style that helped him dispatch rival Howard Dean. At the same time, polls show Kerry hasn't even convinced his own party's voters that he has solutions to big problems -- from the loss of manufacturing jobs to Iraq -- that have sapped the President's popularity. On Iraq, says Democratic consultant Dane Strother, "I don't know his plan, and I follow this pretty closely."

Dems fear that Kerry, who spent much of the winter hawking dense 10-point economic and environmental blueprints, has let Republicans tattoo him as a tax-hiker of two minds on defense -- weak and very weak. An Apr. 19-22 poll by Democracy Corps, a liberal group, found that 65% of respondents have doubts about Kerry's record on the economy, and 60% worry about his support for U.S. troops.

Chicken Hawks

Campaign officials insist that the setbacks will be forgotten when Kerry launches a counteroffensive. The comeback bid started on Apr. 26 with the "Jobs First" Express, an unoriginal but possibly helpful bus tour through the Rust Belt. To counter GOP attack ads, Kerry will air biographical TV spots that play up his credentials as a war hero and battler for jobs and health care. In response to the GOP assault on his Vietnam protests, Kerry is returning fire at Bush and Vice-President Dick Cheney, blasting them as Chicken Hawks who sidestepped Nam. From now on, "we've got to be in a position to be doing more punching than parrying," says Kerry adviser Tad Devine.

Trouble is, Kerry is running out of time to redefine himself. The flap over his chuck-your-medals-and-keep-them-too performance in Vietnam protests feeds concerns about his desire to have things both ways. Meantime, a sizzling economy is boosting consumer confidence and undermining his dire portrayals of middle-class distress.

The election is six months off, and Kerry has a record as a strong closer. Friends predict he'll bounce back when Presidential debates showcase his policy savvy. Maybe. But right now, he is well behind where he ought to be against a President who's had a stretch of bad road. That can only be chalked up to the senator's stiffness on the stump and a strategic team with the reflexes of a Cape Cod sandbar. Fannie Mae (FNM) and Freddie Mac (FRE) have stalled Capitol Hill's efforts to rein them in -- and politics may stay the Bush Administration's hand as well. The White House is mulling a three-way crackdown on the housing-finance giants, with Treasury, Housing & Urban Development, and the Office of Federal Housing Enterprise Oversight all exploring new rules. Treasury may invoke its unused authority to restrict their borrowing.

Despite their win on the Hill, the mortgage giants must tread carefully. Fannie Chairman Franklin D. Raines, a short-list candidate to run Treasury in a Kerry Administration, "has to walk a fine line and not be overly strident or burn any bridges," says a Democratic adviser. And Raines doesn't want to cross swords with Federal Reserve Chairman Alan Greenspan, who frets publicly about Fannie's and Freddie's risks.

But Hill Republicans aren't pushing the Bush plan. Wary of upsetting the housing markets in an election year -- especially as interest rates start to rise -- they're warning the Administration not to overplay its hand. For example, some question Treasury's authority to limit Fannie and Freddie borrowing. Others wonder whether the plan isn't just an election-year stopgap to insulate Bush from a financial crisis.

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