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. His presidency was also defined by scandals, including the Monica Lewinsky affair and subsequent impeachment, which left a complex legacy.
Clinton Administration's Domestic Policies
Centrist "Third Way" Approach
Clinton ran as a "New Democrat," positioning himself between traditional liberalism and conservatism. This "Third Way" philosophy aimed to reform welfare, reduce crime, and balance the federal budget without abandoning core Democratic commitments to working families.
- Signed the 1993 Omnibus Budget Reconciliation Act, which raised taxes on the wealthiest Americans, reduced taxes for millions of low-income families, and mandated significant spending cuts
- This legislation laid the groundwork for the budget surpluses that emerged later in his presidency
- The bill passed without a single Republican vote in either chamber, with Vice President Al Gore casting the tie-breaking vote in the Senate
Crime and Welfare Reform
- The 1994 Violent Crime Control and Law Enforcement Act expanded the federal death penalty, funded 100,000 new police officers, and included an assault weapons ban
- Also established the Violence Against Women Act (VAWA) to combat domestic violence and sexual assault
- The 1996 Personal Responsibility and Work Opportunity Act ended the longstanding federal guarantee of welfare (Aid to Families with Dependent Children) and replaced it with Temporary Assistance for Needy Families (TANF)
- Required recipients to begin working within two years and placed a five-year lifetime limit on benefits
- This was deeply controversial within Clinton's own party, with many liberals arguing it would harm the poorest Americans
Healthcare Reform Attempts
Clinton's most ambitious domestic initiative was healthcare reform. A task force led by First Lady Hillary Clinton proposed a plan for universal coverage, but it never came to a vote in Congress. The plan faced opposition from conservatives, the health insurance industry (whose "Harry and Louise" ad campaign became famous), and critics who found the proposal too complex.
Despite this high-profile failure, Clinton signed several smaller but significant healthcare measures:
- The State Children's Health Insurance Program (SCHIP) in 1997, which expanded coverage to millions of uninsured children
- The Health Insurance Portability and Accountability Act (HIPAA) in 1996, which allowed workers to keep health coverage when changing jobs and established medical privacy protections
Trade and Environmental Policies
- Clinton signed the North American Free Trade Agreement (NAFTA) and granted China permanent normal trade relations (formerly called "most favored nation" status)
- Both moves faced strong opposition from labor unions and anti-globalization activists who warned about job losses and weakened environmental standards
- The administration pursued conservation efforts, including strengthening the Endangered Species Act and using executive authority to designate new national monuments
- Compromises with the Republican-controlled Congress were necessary on issues like logging and drilling on public lands
Economic Trends of the 1990s
Record Economic Expansion
The 1990s produced the longest peacetime economic expansion in American history up to that point, with GDP growing for 120 consecutive months from March 1991 to March 2001.
- The federal budget was balanced from 1998 to 2001, producing the first surpluses since 1969
- These surpluses resulted from a combination of increased tax revenue from economic growth and the 1993 tax increases
- Unemployment fell from 7.5% in 1992 to 4% by 2000, the lowest level in 30 years
- Over 22 million new jobs were created during Clinton's two terms
Low Inflation and Stock Market Boom
- Inflation remained low throughout the decade, helped by technological advances and increased globalization that reduced production and labor costs
- The Dow Jones Industrial Average quadrupled from around 2,500 in 1990 to over 11,000 by 1999
- Much of this growth was fueled by the tech sector and speculative investment in dot-com companies, many of which had no profits and questionable business models
- The Taxpayer Relief Act of 1997 cut capital gains taxes, further encouraging stock market investment
Trade and Deregulation
- NAFTA (1994) created a free-trade zone between the U.S., Canada, and Mexico, significantly increasing cross-border trade but also accelerating the outsourcing of manufacturing jobs
- The Clinton administration continued a bipartisan trend of deregulation:
- The Telecommunications Act of 1996 overhauled regulations on media and communications
- The Gramm-Leach-Bliley Act of 1999 repealed key provisions of the Depression-era Glass-Steagall Act, allowing commercial banks, investment banks, and insurance companies to merge
- These deregulatory moves spurred innovation and growth but also contributed to the dot-com bubble's collapse in 2000 and, more significantly, helped set the stage for the 2008 financial crisis
Clinton's Foreign Policy Impact
Assertive Multilateralism
Clinton's foreign policy centered on "assertive multilateralism", working through international organizations and alliances to expand democracy and free markets globally. This approach was tested early and painfully.
- U.S. forces deployed to Somalia in 1993 for a humanitarian mission suffered 18 killed in the "Black Hawk Down" incident in Mogadishu
- The resulting U.S. withdrawal contributed to a deep reluctance to intervene in future crises, most notably the 1994 Rwandan Genocide, in which an estimated 800,000 people were killed while the international community largely stood by
Middle East and North Korea
- The Clinton administration brokered the 1993 Oslo Accords between Israel and the Palestine Liberation Organization, and the 1994 Israel-Jordan peace treaty
- A final Israeli-Palestinian peace deal remained elusive; negotiations broke down at the Camp David Summit in 2000
- In response to the 1994 North Korean nuclear crisis, the U.S. negotiated the Agreed Framework, under which North Korea would freeze its plutonium enrichment program in exchange for aid and two light-water reactors
- The agreement ultimately collapsed in the early 2000s when North Korea was found to be pursuing a secret uranium enrichment program
Balkans Interventions
The breakup of Yugoslavia produced the worst violence in Europe since World War II, and the Clinton administration intervened twice:
- Bosnia (1995): U.S.-led NATO airstrikes helped end the Bosnian War and led to the Dayton Agreement, which partitioned Bosnia into a Croat-Bosniak federation and a Serb republic
- Kosovo (1999): A 78-day NATO bombing campaign against Serbia, undertaken without UN Security Council authorization, forced Yugoslav forces to withdraw from Kosovo
- The province was placed under UN administration, but the intervention set a controversial precedent for military action without Security Council approval
NATO Expansion and Russia
- Clinton oversaw the post-Cold War expansion of NATO, adding Poland, Hungary, and the Czech Republic in 1999 as part of a strategy to spread democratic stability into Eastern Europe
- The administration strengthened U.S.-Russian relations through arms control agreements like START II and economic assistance programs
- However, Clinton faced criticism for supporting Russian President Boris Yeltsin despite Russia's flawed 1996 elections and the brutal war in Chechnya
- Russian leaders warned that NATO expansion would damage long-term relations, a concern that proved prescient in later decades
Scandals of the Clinton Presidency
Whitewater and Related Investigations
The Whitewater controversy began with questions about the Clintons' 1980s real estate investments in the failed Whitewater Development Corporation in Arkansas. Attorney General Janet Reno appointed an independent counsel to investigate, and the role eventually passed to Kenneth Starr, whose inquiry expanded well beyond the original scope.
- The investigation grew to include the 1993 firing of White House travel office employees ("Travelgate") and the improper accessing of FBI background reports ("Filegate")
- No criminal charges were filed against the Clintons in any of these matters
- Reno's decision to expand Starr's mandate to include the Lewinsky matter became deeply controversial, with Clinton's defenders charging that a "vast right-wing conspiracy" was driving the investigations
Campaign Finance and Lewinsky Scandals
- The 1996 campaign finance controversy involved allegations that the Clinton-Gore campaign accepted illegal foreign donations
- A Senate investigation followed, but no criminal charges were brought against the Clintons
- The Monica Lewinsky scandal dominated Clinton's second term and led to his impeachment:
- Clinton denied under oath having a sexual relationship with Lewinsky, a White House intern
- After evidence contradicted his testimony, Independent Counsel Starr referred the case to Congress
- The House impeached Clinton in December 1998 on charges of perjury and obstruction of justice
- The Senate acquitted Clinton on both charges in February 1999, falling well short of the two-thirds majority needed for removal
Clinton became only the second president in American history to be impeached (after Andrew Johnson in 1868).
Controversial Pardons
- In his final hours in office (January 2001), Clinton issued a wave of pardons, most controversially for Marc Rich, a fugitive financier whose ex-wife had donated heavily to the Clinton Library and Democratic causes
- Critics alleged the pardons were politically motivated or tied to financial contributions
- A Congressional investigation found no evidence of criminal wrongdoing, but the pardons further damaged Clinton's reputation as he left office