The conservative trend continued in the 1980s. The
election of Ronald Reagan changed the direction of
American policy on several fronts. Reversing decades of
the expanding welfare state, Reagan cut spending on food
stamps, school lunch programs, and job programs. At the
same time, his administration fostered the largest peacetime
military buildup in American history. Total federal
spending rose from $631 billion in 1981 to more than
$1 trillion by 1986. But instead of raising taxes to pay
for the new expenditures, which far outweighed the budget
cuts in social areas, Reagan convinced Congress to
support supply-side economics. Massive tax cuts were designed
to stimulate rapid economic growth and produce
new revenues. Much of the tax cut went to the wealthy.
Between 1980 and 1986, the income of the lowest 40 percent
of the workforce fell 9 percent, while the income of
the highest 20 percent rose by 5 percent.
Reagan’s policies seemed to work in the short run, and
the United States experienced an economic upturn that
lasted until the end of the 1980s. But the spending policies
of the Reagan administration also produced record
government deficits, which loomed as an obstacle to
long-term growth. In the 1970s, the total deficit was
$420 billion; between 1981 and 1987, Reagan budget
deficits were three times that amount. The inability of
George H.W. Bush (b. 1924), Reagan’s successor, to deal
with the deficit problem or with the continuing economic
downslide led to the election of a Democrat, Bill
Clinton (b. 1946), in November 1992.
The new president was a southerner who claimed to be
a new Democrat—one who favored fiscal responsibility
and a more conservative social agenda—a clear indication
that the rightward drift in American politics had not
been ended by his victory. During his first term in office,
Clinton reduced the budget deficit and signed a bill turning
the welfare program back to the states while pushing
measures to strengthen the educational system and provide
job opportunities for those Americans removed from
the welfare rolls. By seizing the center of the American
political agenda, Clinton was able to win reelection in
1996, although the Republican Party now held a majority
in both houses of Congress.
President Clinton’s political fortunes were helped considerably
by a lengthy economic revival. Thanks to
downsizing, major U.S. corporations began to recover the
competitive edge they had lost to Japanese and European
firms in previous years. At the same time, a steady reduction
in the annual government budget deficit strengthened
confidence in the performance of the national economy.
Although wage increases were modest, inflation was
securely in check, and public confidence in the future was
on the rise.
Many of the country’s social problems, however, remained
unresolved. Although crime rates were down,
drug use, smoking, and alcoholism among young people
were on the rise, and the specter of rising medical costs
loomed as a generation of baby boomers neared retirement
age. Americans remained bitterly divided over such
issues as abortion and affirmative action programs to rectify
past discrimination on the basis of gender, race, or
sexual orientation.
President Clinton contributed to the national sense of
unease by becoming the focus of a series of financial and
sexual scandals that aroused concerns among many
Americans that the moral fiber of the country had been
severely undermined. Accused of lying under oath in a judicial
hearing, he was impeached by the Republican-led
majority in Congress. Although the effort to remove
Clinton from office failed, his administration was tarnished,
and in 2000, Republican candidate George W.
Bush (b. 1946), the son of Clinton’s predecessor, narrowly
defeated Clinton’s vice president, Albert Gore, in the
race for the presidency. Bush too sought to occupy the
center of the political spectrum while heeding the concerns
of his conservative base.
World History
