In her first two years as Minority Leader, Rep. Nancy Pelosi (D-Calif.) used her position to reward political loyalists and win over Members once skeptical of her leadership. But as she heads into her second Congress as leader, aides and Members alike say Pelosi will have to demonstrate more results to remain unassailable in her position as the House’s top Democrat.

Pelosi has received good marks for her performance to date, raising record amounts of money for the party, helping build Caucus unity on key votes and more effectively persuading Members to pull in the same direction.

The praise comes even though the Democrats saw a net loss of three seats in the 2003 elections, and two conservative Members jumped to the GOP in the previous cycle. Most Members gave Pelosi a pass on the election outcome, given a Texas redistricting that led to the loss of four of five endangered Democratic incumbents there and a GOP president who showed surprising strength at the ballot box.

“Members feel like she’s done very well,” said a Democratic leadership staffer. “Her staying power, though, will play out over this Congress.”

As part of that, Members and aides say Pelosi will have to prove her mettle by continuing to keep the Caucus in line on votes, showing she can help orchestrate an electoral success by gaining seats in 2006, and proving her influence reaches beyond her progressive allies by reaching out to Members representing more conservative districts.

“Entering this Congress, Pelosi is marginally stronger than when she was first elected,” said another senior Democratic aide. “I wouldn’t say it’s much greater, but she’s clearly shored up her core and surrounded herself with allies.

“Having said that, depending on how we do, the honeymoon is over, clearly. We’re no longer — especially while in the minority — no longer in the business of electing leaders for life.”

“This next time isn’t a pass — it’s time to produce,” added one Democratic Member.

Pelosi, previously the Minority Whip, succeeded Rep. Richard Gephardt (Mo.) in January 2002 after her predecessor stepped down to run for the White House. She won the Minority Leader post by a landslide, but only after a contentious battle against now-Minority Whip Steny Hoyer (Md.) for the No. 2 Democratic position that further strained the already fractious Caucus.

Democrats were brimming with optimism when Pelosi took the helm, envisioning gains in the House against the backdrop of a presidential election and welcoming a new face after eight years under Gephardt. (Over Gephardt’s last term, many House Democrats complained the Missouri lawmaker had his focus set on the presidency, and in so doing, ignored the House.)

Pelosi quickly surrounded herself with a clutch of close allies, many of them Californians including Rep. George Miller, her closest confidant, and Reps. Anna Eshoo and Jane Harman, and invested them with power. Others in the camp include Reps. Rosa DeLauro (Conn.), John Murtha (Pa.), David Obey (Wis.) and Jan Schakowsky (Ill.).

Pelosi placed many of her friends at her decision-making table, and tapped some for key Caucus positions including crucial committee spots, ranking member jobs and non-elected slots on the Steering Committee. Heading into the new Congress, she kept her same inner circle intact, including Miller and DeLauro as co-chairmen of the powerful Steering Committee and Rep. John Spratt (S.C.) as the Assistant to the Minority Leader.

Last cycle, Pelosi sent out the message that defections on key votes would not be tolerated. She also made a point to the Caucus that to succeed, Members must raise money and give it to the party and their colleagues, arguing that to win back the House everyone must participate. True to her word, several top Caucus fundraisers won slots on exclusive committees in organizing for the 109th Congress.

Reps. Rahm Emanuel (Ill.), John Larson (Conn.) and Mike Thompson (Calif.), who gave the Democratic Congressional Campaign Committee $200,000, $175,000 and $236,000, respectively, got appointments to the powerful Ways and Means Committee. Placed on the exclusive Energy and Commerce Committee were Reps. Mike Ross (Ark.), Tammy Baldwin (Wis.) and Jay Inslee (Wash.), who gave $200,000, $125,000 and $225,000, respectively.

Pelosi ultimately supported giving Rep. Collin Peterson (Minn.) — who has done little to nothing for the political fortunes of his Caucus over the years — the ranking member job on the Agriculture Committee. But in so doing she also forced Peterson to cough up his $70,000 in party dues (only the second time he’s paid his dues), and extracted a promise that he would pay his dues from now on.

For the first time, Pelosi, along with Hoyer and other senior Democrats, made ranking members interview for their posts. In Peterson’s case, the Minnesota lawmaker had to lobby heavily for the job.

“She is establishing a new trend,” said an aide to a rank-and-file Member. “It’s set by the attitude of leadership that you need to be a team player. She’s establishing herself as the leader of the Democratic Caucus. And in so doing showing that anyone who is loyal to the Caucus is loyal to her.”

Not all of the recent appointments to coveted slots are Pelosi loyalists but, with the notable exception of Peterson, are considered ideological allies.

Thompson, a Pelosi ally and Blue Dog Democrat, said his California colleague has increased her strength by building coalitions within the Caucus, raising money and ensuring candidates have the resources they need to win elections, and holding Members accountable when it comes to votes and participating in the party.

Beyond that, Thompson said Pelosi recognizes Democrats don’t set the agenda, but they can be a strong opposition party and lay down a marker on core issues.

“She has set the standard,” Thompson said. “She’s made folks realize they have to be participatory. We are a team and we all have to pull together in order to advance the issues we believe as a Caucus are important to us.”

“Clearly, she has the strong support of the Caucus,” added Democratic Caucus Chairman Bob Menendez (N.J.). “She has certainly worked to have the members of the Caucus feel as if they are heard in a meaningful way to try to maximize their participation in every way — policy-wise, financially and politically.

“I think she walks into this second term as the leader with a solid foundation.”

Pelosi is clearly gaining confidence as she heads into her second term, saying she feels “strong in her position as House Democratic leader.”

“Without any question, any experience in the leader’s office certainly strengthens and enhances your ability to do a good job,” she said.

Demonstrating her growing self assurance, Pelosi even went beyond her cadre of loyalists when she tapped Emanuel to head the DCCC this cycle — a move her aides say was outside of her comfort zone.

Emanuel, while a team and party player, is regarded as something of a maverick, someone not necessarily close to Pelosi nor one who will allow her to direct the party committee.

“She chose him because he’s good,” said a Democratic aide close to Pelosi. “That shows her confidence.”

To get there, Pelosi spent the past two years working the Caucus to get to know Members, reach out to different factions and mend the harsh divisions that resulted when Pelosi defeated the more moderate Hoyer for the Whip job in October 2001.

“She’s been very thoughtful about making all parts of our party feel like they have a stake,” said Schakowsky, another Pelosi confidante. “Members feel very confident and comfortable with her leadership to take us into the next phase.”

Others argue Pelosi needs to make major strides before winning everyone over. They say Pelosi, whose district is one of the nation’s most progressive, still needs to prove she can lead a winning effort in tough swing states.

They say the jury is truly out now that the energy that comes with a new leader’s first term has abated, and she will have a tougher time than ever keeping Members in line on key votes, giving to the party and proving that she is the person who can give Democrats a majority.

“When she started, she started with an open slate,” said a top Democratic aide. “She commanded a lot of power in the beginning. I don’t think she’s a weak leader, but her ability to go to the Caucus and get [Members] to do this or that is much less than it was two years ago.”

Even Pelosi allies acknowledge that she still has her work cut out for her and cannot take any part of the Caucus for granted. One senior aide said Pelosi knows her leadership style and agenda cannot tilt too far to the progressive end of the spectrum.

“There’s always that tension,” said a senior Democratic leadership aide of the rub between the left and the right. “She clearly understands that she’s got to reach out to the base and keep them motivated and also reach out to swing voters.”

Several aides to moderate Members said Pelosi’s test will come with how she leads in term two, and whether she will move beyond her progressive loyalists and lead from the center. Moderate Members rallied around her in her first two years, but without proof that she knows how tough it is to win in their districts, they may have trouble supporting the party on votes that could hurt them come election time.

“There’s going to be more grumbling in the moderate and conservative wing of the party on policy,” said a senior staffer to a moderate Member. “A lot of them believe very strongly they know how to win in red districts in red states and our leadership, Pelosi and a lot of those she listens to, don’t.”