14.3 The Presidency of Bill Clinton and the 1990s

The Clinton presidency marked a pivotal era in American politics and economics. Bill Clinton's "Third Way" approach blended centrist policies with traditional Democratic values, reshaping the political landscape of the 1990s.

Clinton's tenure saw unprecedented economic growth, budget surpluses, and major reforms in welfare and crime. However, his presidency was also marred by scandals, including the Monica Lewinsky affair and subsequent impeachment, which left a complex legacy.

Clinton Administration's Domestic Policies

Centrist "Third Way" Approach

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• Clinton's "New Democrat" approach sought a centrist "Third Way" between traditional liberalism and conservatism
• Aimed to reform welfare, reduce crime, and balance the federal budget
• Signed the 1993 Omnibus Budget Reconciliation Act which raised taxes on the wealthy, reduced taxes for millions of low-income families, and mandated major spending cuts
  • Laid the groundwork for budget surpluses later in his presidency

Crime and Welfare Reform

• The 1994 Violent Crime Control and Law Enforcement Act expanded the federal death penalty and provided funds for 100,000 new police officers
  • Established the Violence Against Women Act to combat domestic violence and sexual assault
• The 1996 Personal Responsibility and Work Opportunity Act ended the federal guarantee of welfare and required recipients to begin working after two years
  • Placed a lifetime limit of five years on welfare benefits in an effort to promote self-sufficiency

Healthcare Reform Attempts

• Clinton's healthcare reform plan, led by First Lady Hillary Clinton, aimed for universal coverage but failed to pass Congress
  • Faced opposition from conservatives, the health insurance industry, and criticism over the complex nature of the proposal
• Despite the failure of comprehensive reform, Clinton signed several smaller healthcare measures like the State Children's Health Insurance Program (SCHIP) and the Health Insurance Portability and Accountability Act (HIPAA)

Trade and Environmental Policies

• Clinton signed major free trade agreements like the North American Free Trade Agreement (NAFTA) and granted China "most favored nation" trade status
  • Faced opposition from labor unions and anti-globalization activists concerned about job losses and environmental impacts
• The Clinton administration pursued environmental and conservation efforts, including strengthening the Endangered Species Act and creating new national monuments
  • Had to make compromises with the Republican-controlled Congress on issues like logging and drilling

Economic Trends of the 1990s

Record Economic Expansion

• The U.S. economy experienced the longest peacetime economic expansion in its history during the 1990s
  • GDP grew for 120 months from March 1991 to March 2001
• The federal budget was balanced from 1998 to 2001, the first surpluses since 1969
  • Largely due to increased tax revenue from economic growth and the 1993 tax hikes
• Unemployment fell from 7.5% in 1992 to 4% by the end of Clinton's term in 2000, the lowest level in 30 years
  • Over 22 million new jobs were created during this period

Low Inflation and Stock Market Boom

• Inflation remained low throughout the decade, helped by advancements in technology and increased globalization
  • Reduced production and labor costs contributed to price stability
• The Dow Jones Industrial Average quadrupled from around 2,500 in 1990 to over 11,000 by 1999 as the stock market boomed
  • Fueled by growth in the tech sector and speculation in dot-com companies
• The Taxpayer Relief Act of 1997 cut capital gains taxes, further encouraging investment in the stock market

Trade and Deregulation

• The North American Free Trade Agreement (NAFTA) in 1994 created a free-trade zone between the U.S., Canada, and Mexico
  • Significantly increased trade but also led to concerns about outsourcing of U.S. jobs
• The Clinton administration continued the trend of deregulation in industries like telecommunications (Telecommunications Act of 1996) and finance (Gramm-Leach-Bliley Act of 1999)
  • Spurred innovation and growth but also set the stage for the excesses of the dot-com bubble and later financial crises like the subprime mortgage meltdown

Clinton's Foreign Policy Impact

Assertive Multilateralism

• Clinton's foreign policy was characterized by "assertive multilateralism" - working with international organizations and allies to address global challenges
  • Aimed to expand democracy and free markets around the world
• U.S. forces were deployed to Somalia in 1993 for a humanitarian mission that turned violent, with 18 Americans killed in the "Black Hawk Down" incident
  • Led to a U.S. withdrawal and reluctance to intervene in later crises like the Rwandan Genocide

Middle East and North Korea

• The Clinton administration brokered the 1993 Oslo Accords between Israel and Palestine and the 1994 Israel-Jordan peace treaty
  • Failed to achieve a lasting Israeli-Palestinian peace deal, with negotiations breaking down at Camp David in 2000
• In response to the 1994 North Korean nuclear crisis, the U.S. negotiated the Agreed Framework to freeze North Korea's nuclear program
  • Promised aid and two light-water reactors in exchange for North Korea halting its plutonium enrichment

Balkans Interventions

• U.S.-led NATO airstrikes in Bosnia in 1995 helped end the Bosnian War and led to the Dayton Agreement
  • Partitioned Bosnia into a Croat-Muslim federation and a Serb republic
• The 1999 NATO bombing campaign against Serbia, undertaken without UN approval, forced the withdrawal of Yugoslav forces from Kosovo
  • Established UN administration of the province but set a precedent for military action without Security Council authorization

NATO Expansion and Russia

• Clinton continued the post-Cold War expansion of NATO, adding Poland, Hungary, and the Czech Republic in 1999
  • Part of strategy to spread democracy and stability in Eastern Europe
• Strengthened U.S.-Russian relations with arms control agreements like START II and economic assistance
  • But faced criticism for supporting Russian President Boris Yeltsin despite flawed elections and the bloody Chechen War

Scandals of the Clinton Presidency

Whitewater and Related Investigations

• The Whitewater controversy involved the Clintons' real estate investments in the failed Whitewater Development Corporation in the 1980s
  • Led to a sprawling investigation by Independent Counsel Ken Starr
• The Whitewater inquiry expanded to include the 1993 firing of White House travel office employees (Travelgate) and improper accessing of FBI background reports (Filegate)
  • No criminal charges were ultimately filed in either case
• Attorney General Janet Reno's decision to expand Starr's mandate to include the Lewinsky matter led to charges of a "vast right-wing conspiracy" by the Clintons' defenders

Campaign Finance and Lewinsky Scandals

• The 1996 campaign finance controversy erupted over allegations of the Clinton-Gore campaign accepting illegal foreign donations
  • Led to a Senate investigation but no criminal charges against the Clintons
• Clinton's 1998-1999 impeachment stemmed from the Monica Lewinsky scandal and charges of perjury and obstruction of justice
  • Clinton initially denied under oath having a sexual relationship with Lewinsky, a White House intern, leading to the perjury charge
  • The House impeached Clinton in December 1998 for perjury and obstruction of justice related to the cover-up
• In February 1999, the Senate acquitted Clinton of both impeachment charges, allowing him to finish his term

Controversial Pardons

• The last-minute pardons issued by Clinton in January 2001, particularly of fugitive financier Marc Rich, sparked controversy
  • Critics alleged the pardons were politically motivated or tied to donations to the Clinton Library
• A Congressional investigation was launched but found no evidence of criminal wrongdoing
  • However, the pardons damaged Clinton's reputation as he left office under a cloud of scandal