IN BUSH'S SHADOW

John Kerry wanted to hit back. It had been a miserable August as he took incoming fire about his military service from a gang of hostile Vietnam vets. But no, campaign manager Mary Beth Cahill and other staffers argued, the Swift Boat ads would blow over. Finally, Kerry had had enough. For three or four days, as he campaigned across the country, Kerry ripped into Cahill, furious that the mostly baseless attacks on his valor were driving his numbers down. "He was very angry," one old friend says. "The calculation had been made that this wasn't going to hurt him." Kerry's solution was to reach for an old ally. "Get Vallely," he screamed.

Thomas Vallely is the leader of the pack of vets that Kerry calls his dog-hunters, a group that has beaten back the attacks on his Vietnam record since his first Senate race 20 years ago. "He knows that I know the other players," Vallely says of Kerry's Mayday call. "He knows that I also like this stuff."

The return of the old warriors marked a turning point in the Swift Boat controversy, and a rare moment when Kerry stamped his authority on a drifting campaign. "OK, time to break out the fatigues. We've been there, done that. Time to do it again," says David Thorne, Kerry's close friend, of the mood among the senator's inner circle.

And so, even as the balloons were falling at the Republicans' party in Madison Square Garden, Kerry's motorcade pulled into Clark County, Ohio, where Al Gore beat George W. Bush by just 324 votes. There, Kerry finally struck hard at his opponents' record during Vietnam. "I will not have my commitment to defend this country questioned by those who refused to serve when they could have, and who misled America into Iraq," Kerry told a crowd of several thousand supporters at a midnight rally in Springfield. The Bush team, as usual, responded rapidly to Kerry's decidedly unrapid response. Karen Hughes, the president's longtime message maven, accused Kerry of being "consumed" by Vietnam, saying he had "diminished himself" with the attack.

Kerry's counteroffensive seems to fit a well-worn pattern. After a period of complacency, the senator blew his slender lead in the polls and slid into frustration and inertia, before emerging with a new fighting spirit. It happened in the Democratic primaries, when Kerry's campaign was written off well before the first votes were cast in Iowa. Could it happen again in the general election? "There is nobody, nobody, who is a better finisher than John Kerry," says one close adviser and former staffer. Thorne promises there's more lashing to come, but even some of Kerry's most trusted friends can't be sure when the gloves will really come off. "I hope we don't get to the near-death experience again," says one senior aide. "I think he's a lot better when he's behind, but I hope we don't get too far behind."

Behind is where Kerry now stands in the horse race with President Bush. According to the new NEWSWEEK Poll, Bush now holds an 11-point lead over Kerry in a three-way race with Ralph Nader, erasing the seven-point edge Kerry held during his convention in July. Bush now enjoys his best favorable ratings since February (55 percent), while Kerry's unfavorable ratings are at their highest of the campaign (45 percent). For the first time in more than a year, 53 percent say Bush deserves a second term.

Those numbers lifted the already buoyant mood among Republicans as they closed out their convention in New York last week. Bush's advisers believe they can resist the tendency to become overconfident, recalling their shock at their sharp decline in the polls in the final days of the 2000 race. Yet they're clearly in a bullish mood. Asked about Kerry's reputation as a strong closer, one senior administration official replied: "It may be too late by the time he tries to do so." Though cautious about predicting that they could sustain the bounce out of New York, Bush's aides were upbeat as they traveled to Wisconsin to launch their postconvention tour. Normally inaccessible to the press, a succession of senior Bush advisers chatted freely while Karl Rove, the president's strategic mastermind, offered cream puffs to sweeten the mood among reporters.

Kerry may have taken it out on his staff, but he has only himself to blame for his current predicament. Kerry tied himself in knots over Iraq, saying he would have voted for the war even if he'd known there were no weapons of mass destruction--a move even his friends say has hindered his ability to attack Bush on the subject. And he shut down his campaign's TV ads between his convention in Boston and the Republicans' gathering in New York to conserve cash--giving the Swifties a strategic opening. Cahill stands by the strategy. "We jointly made the decision about when to respond, and when we did, it was a very direct and strong response from him," she says, pointing to a mid-August speech when Kerry accused the Swifties of doing Bush's dirty work. Cahill insists that the campaign went through a similar ebb in March, when it took a big hit in the polls as it concentrated on fund-raising. (At the time, the campaign was saved by the downward spiral in Iraq.) She maintains that her conversations with Kerry remain private; others say there's nothing unusual about the candidate's venting at his aides--in this campaign or any other. "The truth is that he'd be lost without her," says one senior staffer. "She saved this campaign once already."

Cahill is likely to survive the turmoil, but Kerry's friends and closest advisers say the senator is already leaning more heavily on another old chum: John Sasso. Last spring Kerry installed Sasso, who ran the Dukakis campaign in 1988, as his general-election manager at the Democratic National Committee. According to a source familiar with the campaign, Kerry wanted Sasso to run his campaign from the outset, and asked him again to do so when he fired his first manager, Jim Jordan, last year. Sasso and Cahill already meet several times a week and talk daily about the campaign's field operations. Sasso has a rare quality among Democrats, according to those who worked with him in '88. "Nobody has sharper elbows than John Sasso," says Michael Goldman, a former Boston political consultant. "He can hit as hard as the Republican hit machine." Other experienced operatives joined Kerry's campaign last week: Joe Lockhart, the former Clinton White House press secretary, and Joel Johnson, Clinton's former communications adviser. But even as the campaign was bulking up, Kerry lost another valuable ally, at least for a little while, when Bill Clinton was rushed to the hospital for heart surgery. Clinton had cleared his schedule in October to spend the month barnstorming the country for Kerry as well as continuing his book tour.

For the moment, the fight against the Swifties lay in Vallely's hands, as the Kerry campaign expects new ads through the fall about Kerry's antiwar protests. Early last month Kerry's vets were told to hold off as Cahill and others fretted about pushing the story onto the network news. This time around, it's a free-fire zone. Vallely, who is now the director of the Vietnam Program at Harvard University's Kennedy School of Government, has built his own mini war room with former senator and Vietnam vet Bob Kerrey, among others. Kerrey says he wants the candidate to take pride in his antiwar protests. "It took courage to do what he did in '71," says the former senator. "John Kerry was trying to end a war so Karl Rove didn't have to go." Other old hands say the revival of the vets could galvanize the entire campaign. "The Kerry campaign is not on the skids, it's just stopped," says a source familiar with Kerry's inner circle. "Getting vets in might be a new direction."

As he rode out the end of summer at his island home on Nantucket, Kerry began work on what may well be his last chance to turn the tide. He spent hours prepping with Cahill for the final set-piece battle of the election: the TV debates against Bush. "It all comes into focus for him in the last few weeks," says a longtime staffer. It had better. The hour's growing late.