MARGARET WARNER: As snow blankets New Hampshire in the final days before Tuesday's primary, the polls point to a surprisingly competitive two-man race between the one-time favorite, Texas Governor George W. Bush, fresh from victory in the Iowa caucuses, and insurgent candidate John McCain, the Arizona Senator who bypassed Iowa and is wagering most of his political chips on New Hampshire.
STEVE FORBES: Nice to meet you. Thank you. I hope you can help me out.
MARGARET WARNER: But campaigning just as avidly are multimillionaire publisher Steve Forbes, hoping his second place Iowa finish will boost him here, radio talk show host Alan Keyes, buoyed by his third place in Iowa, and conservative activist Gary Bauer. Though this is only the first primary, Bush advisers think they could end the nomination battle with a convincing victory here.
TOM RATH, Bush Adviser: If Governor Bush wins the New Hampshire primary, he has virtually a strangle-hold on the nomination and almost cannot be denied, because the most serious challenger to him will be badly damaged.
MARGARET WARNER: A McCain win would bring nearly as big a payoff for him, the chance to go the distance against Bush.
SEN. JOHN McCAIN: A bounce out of New Hampshire doesn't guarantee a victory. The bounce out of New Hampshire is very important. This is a momentum business that we're in, and a perception business that we're in. Look, there's not a doubt in my mind that if we can win in New Hampshire, we will be very competitive and we'll be viewed as so by the majority of voters.
MARGARET WARNER: But McCain's advisers know he also needs a victory more than Bush does.
WARREN RUDMAN, McCain Adviser: I think probably, honestly, John McCain has the most to win and the most to lose. We don't have $64 million. We don't have a national organization. We have to do very well here. Frankly, I think we probably have to win New Hampshire.
MARGARET WARNER: Bush doesn't face that same do-or-die prospect.
GOV. GEORGE W. BUSH: I'm going to win, but I don't have to win, because I'm going to be here -- as I say, I'm in the race for the long pull. I'm well funded, I'm well organized. So I'm prepared to go the distance.
MARGARET WARNER: But Bush does risk losing his aura as his party's most electable candidate.
WARREN RUDMAN: If John McCain can do very well here, I think all bets are off. I mean, George Bush was supposed to be part of a coronation up here, not an election.
MARGARET WARNER: How did George Bush, the Republican favorite virtually everywhere else in the country, get into this fix in New Hampshire? Political consultant David Carney, who's uncommitted, was white house political director for Bush's father, president Bush.
DAVID CARNEY, Republican Political Consultant: George Bush had this tremendous opportunity. He came with a tremendous lead in name identification, and a great reservoir of good will that his father had. And unfortunately I think that a lot of that was squandered.
MARGARET WARNER: McCain came to New Hampshire early and often last year, building a following of veterans and others attracted by his war hero story, then drawing still other voters to his open town meetings with his call for government reform. Mike pride, editor of theConcord Monitor, thinks Bush stayed away too long and when he did come, relied too much on ads and appearances before captive, controlled audiences at businesses and factories. A Monitor editorial two weeks ago dubbed Bush the "virtual candidate."
MIKE PRIDE, Editor, Concord Monitor: McCain has been here all the time. He's engaged the voters in a real conversation about the direction of the country and about his views. He's taken on all comers and answered all questions. Bush has been very... Well, he's been very protected from the process by his handlers. And people - you know -- have seen that and have reacted to that, I think.
GOV. GEORGE W. BUSH: That is just not true. I mean, that analysis of our campaign is just not accurate. I've been campaigning hard in this state. I mean when you when you walk down a parade route and shake hundreds of hands on the 4th of July in two parades, I wouldn't call that scripted. I've been to company after company after company where the employees have been able to ask me questions for a long period of time. I just reject that kind of shallow analysis of my campaign here.
MARGARET WARNER: To the delight of his supporters, Bush is here very much in the flesh this week, hop-scotching from one audience to another, and holding his own town meetings, like this one last night in Amherst.
JOE PETRONE, Bush National Finance Co-Chair: It would have been nice if he could have done some of these kinds of events earlier. If they can ask you a question, look you in the eye, this is what New Hampshire wants. And that's what George W. is going to give them now.
MARGARET WARNER: Everywhere, Bush stresses his credentials as a governor, and his call for nearly $500 billion in tax cuts over the next ten years.
GOV. GEORGE W. BUSH: I'm going to campaign today, and I'm going to campaign next fall, should I be your nominee, on fighting for a tax cut on the working people of America. I believe if someone works hard to get ahead, they ought to be able to keep more money.
LARRY HORNOR, Retired Stockbroker: I like a lot of his thoughts on taxes. I like his idea of taking tax money by giving back to the people so that Congress doesn't spent it, which they will.
MARGARET WARNER: Bush's advisers think tax cuts are a winner with their target audience: Moderate-to- conservative Republicans in a state that has never adopted an income or sales tax.
TOM RATH: This state for years has said no to taxes, because the more taxes you have, the bigger government you have. If you look at the polling data, the number one issue in this Republican primary is taxes.
MARGARET WARNER: But Forbes is playing to that same audience with his own flat tax proposal. His tax cut is larger and more radical, and has won him the endorsement of the state's most influential newspaper, the "Union Leader."
STEVE FORBES: Two of my opponents-- good people, George Bush and John McCain-- propose the same old, same old: Keeping the code, keeping the IRS as it is, giving little tax cuts phased in five years, eight years, down the road.
MARGARET WARNER: A Forbes ad accuses Bush of breaking a no-tax pledge in Texas. And Forbes campaign manager Bill Dal Col, thinks Forbes can trump Bush on the right on the tax issue.
BILL DAL COL, Forbes Campaign Manager: Bush has a credibility problem. Right now in our data, 4-1 people believe he broke the tax pledge. Beyond that, his father's efforts in 1992 of "read my lips" and breaking that pledge, people in New Hampshire remember, and that hurts him.
MARGARET WARNER: McCain is making a different bet about New Hampshire voters, offering a tax cut only half as big as Bush's, and saving the rest of the surplus for Social Security, Medicare, and paying down the national debt.
SEN. JOHN McCAIN: The difference between me and Governor Bush is that Governor Bush wants to put all of that surplus into tax cuts. I don't think that's conservative. I think it's conservative when you have debts -- when families have bad times and they accrue debts, when they have good times, that they pay them off.
MARGARET WARNER: McCain's advisers think Bush has Yankee Republicans figured all wrong on the tax issue.
WARREN RUDMAN: New Hampshire voters are very tax conscious, but they're really very fiscally conservative. And when John McCain says let's not spend the inheritance before we get it, that makes sense to them.
MARGARET WARNER: Yet this week, at least, none of the candidates seemed to be getting many questions from voters about their tax plans.
KATHY COOK, Education Consultant: Their different views on the tax plan don't mean a great deal to me.
MARGARET WARNER: Kathy Cook, an education consultant who came to see Bush one night, explains.
KATHY COOK: We're so comfortable economically this year compared to eight years ago when we were very uncomfortable that I don't think certain issues are as big as they might be. And the tax plan is perhaps one of those issues.
MARGARET WARNER: McCain is stressing something else this week to the hundreds of people who show up at his standing-room-only town meetings: His image as a leader, and a man of honesty and character.
WOMAN: I just want to thank you for your integrity. It's extremely important to me that the next President of the United States tells me the truth, no matter what.
SEN. JOHN McCAIN: I thank you for the confidence you've placed in me. One of the things I've learned, and already knew it but is reinforced in me as a result of these town hall meetings -- I will tell you not always what you want to hear. I will tell you what I think you should hear.
MARGARET WARNER: McCain's advisers think this straight talk appeals particularly to moderate Republicans and to the state's wildcard independents, who make up more than one-third of the electorate, and can vote in either party's primary. Even some voters who don't like his positions on certain issues, like Surgeon John Bentwood, are thinking of voting for McCain.
JOHN BENTWOOD, Surgeon: Because I think he's an honest man. I think he expresses himself well. I don't think you can try to please everybody. I think you have to take a stand though.
DAVID CARNEY: McCain's appeal is that he's the anti-politician. He's not a politician. He tells people what he wants them to hear, not what they want to hear. He tells them right in their face that they're wrong. And people actually enjoy that, because it's been eight years we've had somebody, no matter what your position was, he agreed with you. And people are so sick of it.
MARGARET WARNER: With the last debate behind them, the candidates are out in force for a final furious round of campaigning -- Bush, John McCain and Forbes jostling over taxes and Forbes joining Keyes and Bauer in the battle for the state's small group of social conservatives.
ALAN KEYES: We have got to offer the people of New Hampshire, a better choice, a right choice, a true conservative choice that will put this country back on track where it belongs.
GARY BAUER: What I think my party needs to do is to nominate someone-- that would be me-- who is as aggressive about their conservative ideas as Bill Clinton and Al Gore are about their liberal ideas.
MARGARET WARNER: The polls today show McCain edging Bush. But caution is in order. Of the 20 people we spoke to at a Bush event last night, ten said they were still undecided. The fact is, New Hampshire primary voters are unpredictable. And this last weekend before the primary has proved decisive in the past.
GOV. GEORGE W. BUSH: (ad) I have great hope for America's future.
MARGARET WARNER: The air war is intensifying as this weekend begins. Bush's latest ad adopts some of McCain's language on taxes.
STEVE FORBES: (ad) I want to deeply thank all of the people of Iowa...
MARGARET WARNER: Forbes' touts his surge out of Iowa. And McCain's tells New Hampshire voters...
AD SPOKESMAN: New Hampshire can send a powerful message to America....
MARGARET WARNER: New Hampshire can send a powerful message to America. New Hampshire has a history of doing just that, sometimes to the dismay of front-runners, as Bush recalled Tuesday when asked about his father, who had his own problems in this state.
GOV. GEORGE W. BUSH: Last night after the caucuses came in, I called him and said, "it's looking pretty good dad." And he said, "I'm proud of you. Good luck in New Hampshire."
MARGARET WARNER: No matter who wins Tuesday, Bush and McCain have already achieved something: Both are viewed favorably by nearly 80% of their party's voters.