The Whitewater scandal, which Clinton had managed to brush aside during the campaign, gnawed at his presidency. Public pressure forced Attorney General Janet Reno to appoint a special prosecutor. She named Kenneth W. Starr, a Republican lawyer, to investigate Whitewater and other alleged misdeeds of the Clintons.
More troubles followed. Paula Corbin Jones, a State of Arkansas employee, charged that Clinton, while governor, had invited her to his hotel room and asked her to engage in oral sex. Clinton’s attorney denied the accusation and sought to have the case dismissed on the grounds that a president could not be sued while in office. The case commenced a tortuous route through the courts.
Eager to take advantage of Clinton’s troubles, Republicans looked to the 1994 congressional elections. Led by Congressman Newt Gingrich of Georgia, they offered voters an ambitious program to stimulate the economy by reducing both the federal debt and the federal income tax. Federally administered welfare programs were to be replaced by block grants to the states. Many measures protecting the environment, such as those making businesses responsible for cleaning up their waste, were to be repealed.
On election day, the Republicans gained control of both houses of Congress. Under the firm direction of Gingrich, now Speaker, the House approved nearly all of the provisions of this Contract with America. This appalled Clinton, who vetoed the 1995 budget drafted by the Republicans. When neither side agreed to a compromise, the government for a time ran out of money and shut down all but essential services.