Under the new policy, anti-Sandinista rhetoric has been muted and the emphasis is on political, diplomatic and economic pressure on Nicaragua, as opposed to military force, to encourage a democratic outcome.
Bush knew that if he tried to resurrect the more pugnacious Reagan policy, the Democrats would not stand for it.
Two years ago, the contras were riding high. Armed with a fresh infusion of U.S. aid, the rebels were re-infiltrating Nicaragua at the rate of 100 a day
from Honduras and were staging frequent attacks.
But by 1988, an impatient Congress was rejecting further military aid for the rebels and Reagan had to settle for humanitarian aid. Most of the contras retreated back across the border into Honduras.
Now the focus is on using a new package of humanitarian aid - $4.5 million per month until February - for the eventual demobilization of the contras and their reintegration into Nicaragua from the base camps in Honduras.
Under the new approach, the Bush administration gets the benefits of bipartisanship - a coming together of Republicans and Democrats, perhaps for the first time, on the Central America issue - and the prospect of a policy that will be politically sustainable.
If a peaceful, democratic Nicaragua emerges, culminating with elections in February, Bush will earn plaudits all around as the man who found a way to tame an issue that had festered under his predecessor.
The big question many conservatives are asking is whether the combination of non-military pressures can be enough to make the Sandinistas do what Reagan had said could be done only by military force: democratize their political system.
Reagan, in effect, said of the Sandinista promises to create democracy: ''We can't trust them. Arms for the contras."
Bush, in effect, is replying, "Well, maybe they can be trusted. Food - but not guns - for the contras but only for a while."
If the Sandinistas demonstrate good faith, Congress could cut off even humanitarian aid to the contras by November, two months before the election, under the agreement announced March 24.
But if the Sandinistas are uncooperative, Bush has the option of tightening a four-year-old trade embargo against the Sandinistas and encouraging aid donors in Western Europe and Japan to withhold assistance.
As a final option, Bush could try to win renewed military aid for the contras if he concluded that the Sandinistas were irretrievably committed to Marxist rule and to destabilizing neighboring governments.
Under that scenario, the now-discarded Reagan position would seem more plausible in retrospect.
In any case, just how much the rhetoric has changed from the previous administration can be illustrated by citing some quotes from a Reagan speech in June 1986, the day before a House vote on a $100 million aid package for the contras.
"For over 200 years," Reagan said, "the security of the United States has depended on the safety of unthreatened borders, north and south. Do we want to be the first elected leaders in U.S. history to put our borders at risk?"
The aid package was approved, but that kind of talk is all but forgotten nowadays.
The view of Secretary of State James A. Baker 3d is that Reagan's policy foundered because he could not get Congress to go along on a consistent basis.
"I think we all have to admit that the policy basically failed to some extent because we were not united. We had an executive branch going in one direction and a legislative branch going in another," Baker said.