Now at his peak of popularity and power on the threshold of ground combat in the Persian Gulf, George Bush nevertheless remains intimidated by the threat of class warfare from Democratic opponents in domestic politics.

That is not the interpretation of critics, from either the Democratic left or the Republican right. Rather, it is the assessment of one of Bush's closest political lieutenants and most trusted Cabinet members, Treasury Secretary Nicholas Brady. In private sessions with conservatives, Brady explains that Bush, as a member of the eastern seaboard aristocracy, must tread more carefully with the "fairness" issue than Ronald Reagan did.

What Nick Brady says is presumed to be not far from what George Bush tells him, and the significance is profound. It suggests the leader of the great coalition who stared down the fearsome Saddam Hussein can be deflected from his course by the mild rebukes of George Mitchell and Dick Gephardt. It means the president may continue to propose a cut in the capital gains tax but won't push it very hard.

This reluctance to face his domestic foes comes not from the uncertain Bush of last November, wounded by the budget debacle and election defeats, but from the triumphant Bush of January, self-confident as the political leader of a mighty armed host. The president's current 85 percent approval rating was reflected in the euphoria among Republican National Committee members gathered here last week.

Thus, what Brady is saying privately to conservatives supporting a cut in the capital gains tax is significant in spelling out Bush's fears. Even though the reduction is contained in the Bush budget and got a decent mention in his State of the Union address Tuesday, Brady -- in his always polite and gracious manner -- makes clear he does not expect the president to pursue it. The secretary does not dispute its need to encourage growth in the becalmed American economy. The problem is strictly political.

Brady asserts that the reason for the president's slump last autumn was not the broken tax pledge or the budget fiasco but his vulnerability on the "fairness" issue. Democrats had succeeded in portraying the Republican Party as the agent of the rich, because of Bush's support -- lukewarm though it was -- for the capital gains tax cut.

Thus, Brady reasons, the president cannot get too close to the Typhoid Mary of reducing the cost of capital. He is determined to prevent his chief's ratings from plunging down to 60 percent as they did last fall.

Could it really be that Bush is so vulnerable on this one issue? Yes, says Brady, because of his social background. George Bush, like Brady himself, belongs to the eastern seaboard upper crust and cannot take the positions held by Reagan and still maintain the loyalty of Joe Sixpack. But what about Reagan's Hollywood high life and his cozy Rodeo Drive set? Brady waves off such objections as failing to understand that class surmounts social behavior.

This extreme caution comes when the president's confidence and that of his supporters has reached new highs. Republican National Committee members who heard Bush's private speech last week were stunned by the boldness of his leadership and by his muscular determination -- not on domestic affairs, where he seemed lukewarm, but in leading the coalition against Saddam. That heightened their soaring optimism that the Gulf war not only guarantees Bush's reelection but restores the party's national momentum.

The designated new Republican national chairman, Clayton Yeutter, displayed his inexperience by prematurely jumping on Democrats in Congress who had voted against the war resolutions. But what Yeutter blurted out is on everybody's mind in the party. "The Democrats have given us back the national defense issue," Rep. Vin Weber, one of the most astute Republican strategists, told us.

Coupled with Brady's perception of the capital gains issue, the president's political posture recalls Franklin D. Roosevelt's declaration in 1941 that "Dr. New Deal" had been replaced by "Dr. Win the War." Bush, giving neither Saddam nor the Democrats any quarter on national security, is willing to retreat on the economic front.

But there is a problem with that formulation. Unlike World War II, the Gulf war will not last four years or anywhere close and cannot be the stimulant to revive a dormant economy. Thus, if all goes well, Republicans can spend the next two years trying to convince voters that Democrats flinched in the face of the Iraqi dictator. But Democrats will get a windfall. They will have the initiative on the economic front against a president and his secretary of the Treasury who may suffer too much from fear of "fairness."