Part 12

by Robin McMeeking

President Ronald Reagan

Reagan was the first president in a very long time to be a committed “conservative”. The Republican party mantra since FDR or even before, was one of fiscal conservatism; i.e. free market economics, minimal regulation of business, lower taxes and balanced budgets. Republicans also traditionally wanted a strong military, feeling that it was better to bargain from a position of strength.

As we have seen, this image is only partially correct, most consistently in the military strength aspect. Democrats tend to be uncomfortable with military spending except during war. They prefer a military that is not threatening or intimidating. Military spending cuts are frequently used by Democrats to help finance social programs.

Because Reagan was ideologically conservative and is held up by conservatives as a president to emulate, we will give his tenure a fairly close look. The biographical information is from the Miller Center for Public Affairs.

He was born in Illinois into a poor family. He grew up in Dixon, Ill, and attended “Eureka College, near Peoria. He worked his way through college with dishwashing and other jobs, also sending money home and inducing his brother to enroll at Eureka. Ronald Reagan was an indifferent college student; he majored in economics and received mostly “C” grades. But Reagan threw himself into extracurricular activities, especially dramatics, and played on the football team.”

Following graduation, at a time when a quarter of Americans were unemployed, Reagan found work as a radio announcer, first in Davenport, Iowa, then later Des Moines. Reagan struggled at first but in time became one of the best-known sports announcers in the Midwest. He also became a popular speaker before Des Moines service groups and enlisted as a reserve officer in the U.S. Cavalry so he could ride horses regularly. But he dreamed of bigger things. In 1937, Reagan went to California with the Chicago Cubs baseball team on spring training and arranged through a friend for a screen test at Warner Brothers. Warner Brothers offered Reagan a contract for $200 a week that launched his film career.

After successful careers as a radio sports announcer, Hollywood movie actor, and television host, he turned to politics and was elected governor of California in 1966, serving eight years. He ran unsuccessfully for President in 1968 and 1976, but in 1980, during a time of U.S. economic troubles and foreign policy difficulties, he won the Republican presidential nomination in a contest with George H.W. Bush and others and defeated President Jimmy Carter in the general election.

When Reagan took office, public confidence in government was at its lowest ebb since the Great Depression. Reagan largely succeeded in his goal of “making the American people believe in themselves again;” he called this the greatest accomplishment of his presidency. 1n 1984, Reagan was reelected to a second term in a 49-state landslide. During the eight years of his presidency, he reshaped national politics and carried out his campaign promises to cut taxes and increase the defense budget, using the latter as leverage to negotiate significant arms control agreements with the Soviet Union. Despite some setbacks, including notable budget deficits, Reagan left office in 1989 with strong approval ratings. His presidency has been ranked highly by the American people in subsequent polls. Reagan died on June 5, 2004.

Reagan admired President Franklin D. Roosevelt, whose “New Deal for the American people” provided jobs for his father and brother during the depths of the Depression. His parents were Democrats, in a Republican area, and Ronald Reagan remained a Democrat until after he turned 50. Although he never lost his admiration for FDR, Reagan became an ardent conservative and switched his registration to Republican in 1962. Reagan’s political and ideological evolution was the product of numerous factors: increased wealth, and the higher taxes that accompanied it; conflicts with leftist union leaders as an official of the Screen Actors Guild, and exposure in his General Electric days to a growing view that the federal government, epitomized by the New Deal, was stifling economic growth and individual freedom.

That view formed the essence of the speech Reagan gave on October 27, 1964, when he burst on the national political scene with a stirring televised appeal for Republican presidential candidate Barry Goldwater. Using many of the stories and statistics that had become staples of his basic GE speech, Reagan contended that government restrictions and taxation were causing the erosion of individual freedom within the United States. He also decried what he saw as the weakness of the U.S. government in the face of the expansive Soviet Union, which Reagan said was bent on world domination. His performance inspired Republicans and raised $1 million in contributions for the faltering Goldwater campaign. Although Goldwater lost the election in a landslide, conservatives had found a new standard-bearer in Reagan.

Backed by a group of wealthy Southern Californian entrepreneurs headed by auto dealer Holmes Tuttle and encouraged by Nancy Reagan, Reagan ran for governor of California in 1966 against two-term incumbent Democratic governor, Edmund G. (Pat) Brown. After defeating a well-known moderate Republican in the primary, Reagan won the governorship by nearly a million votes and was reelected for a second term in 1970. During his governorship, Reagan proved to be more pragmatic than his critics—or indeed, many of his supporters—had anticipated. Especially notable was his quick agreement to a record tax increase to solve an inherited budget deficit. Reagan also restored order on California’s tumultuous university and college campuses, worked with Democrats to achieve welfare reform legislation and property tax relief, and protected the wild rivers of the state’s north coast. On balance, his successes outnumbered his failures, which included a clumsy attempt to reform the state’s mental hospitals and an ill-fated initiative that would have imposed a state and local government-spending cap.

Boosted by his success in California, Reagan made an abortive run for the presidency in 1968, a candidacy that divided his followers and national conservatives. Some of them wanted Reagan to seek the presidency; others believed he should prove himself longer as governor before running for higher office. Trying to please both factions, Reagan ran a half-hearted campaign that came to naught. But in 1976, with the governorship behind him, Reagan just missed wresting the Republican presidential nomination from Gerald Ford, who had become President in 1974 after the resignation of Richard Nixon. Reagan’s near-miss candidacy made him the leading Republican contender in 1980, when he handily won his party’s nomination and went on to defeat incumbent President Jimmy Carter by a significant margin.

Reagan came to the presidency with a sweeping and specific set of policy goals. In domestic affairs, he set out to revitalize the economy, reduce taxes, balance the federal budget, and reduce the size and scope of the federal government. In foreign affairs, he vowed to rebuild the American military and confront the Soviet Union and its allies with new vigor and purpose. He promised to negotiate with the Soviets from a position of strength. He feared that the accepted national policy of deterring the Soviets through a balance of nuclear terror (“mutual assured destruction”) would lead to a nuclear war.

Reagan and his advisers, particularly [James A. ]Baker III, made the economy their first priority from the outset. They were helped in this when Iran released the Americans held hostage in Tehran as Reagan was taking the oath of office. Had they not done so, Meese later observed, Reagan would necessarily have been preoccupied with this issue in his early weeks in office. Instead, Reagan and his team were free to concentrate on getting their economic plan through the Democratic-controlled House of Representatives. To win in the House, they needed every Republican vote and the defection of conservative, mostly southern Democrats—organized in a caucus called “The Boll Weevils” —who found it politically difficult to oppose the new President because Reagan had carried their districts by large margins.

Reagan’s economic program had two major components: tax reductions and budget cuts, which took center stage, and monetary policy, which was as important but held a lower profile. Within weeks of becoming President, Reagan asked Congress to cut marginal tax rates over the next three years by 30 percent and to trim the budget for the coming year by $41 billion. He and his team confidently predicted that these actions would stimulate economic productivity.

But the budget cuts, while receiving huge media attention, were from the start peripheral as they targeted only a small percentage of federal spending, mainly Great Society-era programs designed to widen the nation’s social welfare net. Reagan was simultaneously proposing massive increases in defense spending. He also followed the advice of David Stockman, his director of the Office of Management and Budget, to avoid reforming entitlement programs such as Social Security and Medicare that were the largest components of the budget. The budgets of these politically entrenched programs were determined by complex formulas written into the laws creating them. Trying to cutback these programs presented an enormous political challenge, as Reagan learned when the Senate unanimously rebuffed an early attempt to change the Social Security rules. In truth, Reagan had little interest in overturning such popular programs. As he made clear in his diaries, released nearly two decades after his presidency, Reagan’s aim was to whittle away at Lyndon Johnson’s Great Society while leaving Franklin Roosevelt’s New Deal largely intact.

Reagan’s tax and budget proposals were nonetheless controversial. Cutting programs designed to help the poor, liberals argued, placed those Americans at even greater risk. Critics from across the political spectrum warned that the combination of large tax cuts, minimal budget cuts, and increased defense spending was a recipe for an unbalanced federal budget and a larger national debt. Reagan’s advisers, believers in supply-side economics, responded that the economic recovery engendered by Reagan’s tax and budget cuts would expand the tax base and eventually achieve a balanced budget. But this outcome assumed that Congress would make the spending cuts that Reagan had proposed. Instead, Congress enacted most of the tax cuts but made a “Christmas tree” out of the budget bill. It came as a surprise to Reagan that Republican members of Congress loaded up the budget bill with pet spending projects as readily as Democrats did. The budget would have been out of balance even if the cuts proposed by Reagan had been enacted. As it turned out, the combination of lost tax revenues and higher spending sent the deficit ballooning.

Monetary policies, a key to the nation’s economic health, had a lower profile early in the Reagan years. They were the domains of the Federal Reserve, which could act without presidential or congressional approval. Chairman of the Federal Reserve Paul Volcker, a Carter appointee who quickly won Reagan’s confidence, aimed to bring inflation under control by tightening the nation’s money supply. The result was higher interest rates for borrowing money, which squeezed small businesses and middle-class Americans. Volcker believed that this painful, economic medicine was necessary to break the back of inflation.

As Congress debated Reagan’s tax and budget proposals—their passage still in doubt—tragedy nearly struck. After a speech at a Washington, D.C., hotel on March 30, John Hinckley Jr., a loner afflicted with mental problems, fired several shots at the President, one of which hit Reagan in the chest. At first, Reagan did not realize he had been shot and thought his ribs had been broken when he was hurled into the presidential limousine. (Reagan’s press secretary, James Brady, was permanently injured with a bullet to the brain; a Secret Service agent and District police officer were also wounded.) Secret Service agents diverted the presidential limousine that was en route to the White House to a hospital, a move that probably saved Reagan’s life. Reagan, gasping for breath but ever the trouper, walked into the hospital, then collapsed. Later he won the plaudits of the nation when his jokes on the operating table were relayed to the public, including a quip to an anxious Nancy Reagan, “Honey, I forgot to duck.” On the operating table Reagan told the doctors he hoped they were all Republicans. The doctors appreciated Reagan’s humor, but they were not laughing. The bullet had missed Reagan’s heart by less than an inch.

Reagan won the early victories that he and his advisers desired, but the momentum they generated proved difficult to sustain. The weakness of the economy was the principal reason. Even before Reagan’s economic program was signed into law, the Federal Reserve had identified the loose monetary policies that had led to what economists called “The Great Inflation” of the 1970s as Public Enemy No. 1. When the Fed under Paul Volcker tightened interest rates to curb inflation, the economy plunged into recession and Reagan’s popularity dipped with it. He reached a low-point—below what he would experience during the Iran-Contra scandal—in January 1983 when a Gallup survey gave Reagan an approval rating of 35 percent. Given the monetary circumstances Reagan inherited, it is unlikely that a recession could have been avoided. But the Reagan tax bill worsened the deficit. Reagan’s prediction that the tax cuts would increase revenues missed the mark, at least during the 1981-1982 recession. The 1982 budget deficit was $113 billion—more than $30 billion more than when Carter left office. Unemployment rose to 11 percent, and Reagan was often picketed when he campaigned for Republican candidates in the 1982 midterm elections.

Leading Republicans, including Senate leader Howard Baker, urged Reagan to break with the Federal Reserve, but he refused to do so, believing that tight interest rates would eventually work. “Stay the course,” Reagan proclaimed over and over again. Over time, despite the human costs of the recession, the Fed’s policies did work. Tight money and reduced inflation laid the basis for a boom that began in 1983 and was still going when Reagan left the White House in 1989. Once the economy turned upwards, Reagan chided his critics, saying “They don’t call it Reaganomics anymore.” One reason for this was that Reagan himself no longer indulged the more extreme claims of supply-side economics. The President stopped talking about balancing the budget and in 1982 supported the Tax Equity and Fiscal Responsibility Act (TEFRA), a measure presented as a tax reform bill that was also a tax increase. Congress passed TEFRA, and Reagan signed it into law. In 1984, he supported another tax increase, again packaged as reform.

On another fiscal front, after failing in an aborted attempt to reduce some Social Security benefits, Reagan teamed with House Speaker Tip O’Neill to bring spiraling Social Security costs under control. Reagan appointed a commission, headed by Alan Greenspan, on which O’Neill and Senate leader Baker also had appointees, that came up with a monumental compromise that slightly raised the retirement age, boosted payroll taxes, and taxed the benefits of high-end recipients for the first time. Reagan signed the bill into law in the White House Rose Garden on April 20, 1983, at a ceremony attended by O’Neill, who said, “This is a happy day for America.” This compromise preserved the solvency of the Social Security system for a generation.

Reagan’s confidence in the innate strength of the U.S. economy was validated in 1983 with the beginning of an almost unprecedented economic boom. The gross national product increased by 3.6 percent in 1983 and by 6.8 percent in 1984; by comparison, the GNP had shrunk in 1982 by 2.5 percent. Unemployment sank from 9.5 percent in 1983 to 7.4 percent in 1984. Inflation, tamed by the end of 1981, remained under control through 1984, helping to generate lower interest rates. The stock market boomed in the early 1980s, with the Dow Jones industrial average rising nearly 33 percent in Reagan’s first term.

Second-Term Prosperity

During Reagan’s second term, the economic boom that had begun in 1983 expanded vigorously. The Gross National Product grew annually between 1985 and 1989 by at least 2.7 percent; in 1988, that growth reached 4.5 percent. Unemployment, meanwhile, fell from 7.1 percent in 1985 to 5.2 percent in 1989. Inflation stabilized, and interest rates remained low as well. The stock market reached new heights. Even a corrective crash in 1987—in which the market plummeted 500 points in a single day—amounted only to a minor setback. As a consequence of the boom, real estate, high-tech, financial, and retail industries grew rapidly. Growth was also encouraged by Reagan’s tax policy; the marginal tax rate that was 70 percent when he took office had been reduced to 28 percent by the time he left.

The economic outlook was not completely rosy, however. When John F. Kennedy was President, he had supported tax cuts on the theory that “a rising tide lifts all boats.” The validity—and limitation—of this belief was demonstrated in Reagan’s second term, when millions of poor people, many of them Latino or African American, saw their incomes rise above the poverty line. At the same time, however, wealthiest Americans and corporations benefited most from the economic expansion, and the gap widened between the richest Americans and the middle class. The federal budget deficit also continued to balloon. Between 1985 and 1989, the federal government never ran a budget deficit smaller than $149 billion; in 1986, the deficit was more than $220 billion. When Reagan left office in 1989, the national debt totaled $2.6 trillion, nearly three times larger than when he began his tenure in 1981.

Increased government spending contributed to the increase of the deficits and the mounting national debt. After failing to win significant spending cuts from the Democratic-controlled Houses in his first term, Reagan largely abandoned the effort in his second. So domestic spending continued to grow, while the lower tax rates failed to provide enough revenue to compensate. The defense buildup also contributed to the deficits. The cost of financing the debt absorbed funds that the government might have used to modernize the nation’s infrastructure, especially its transportation system. The ballooning national debt made the American government and economy more dependent on foreign investment. Foreign imports helped American consumers by lowering the cost of goods and keeping inflation down; the other side of this coin was a massive trade imbalance.

Reagan’s Mixed Record on Deregulation

Ronald Reagan took office in 1981 promising to curb the growth of government regulations, especially those that affected private industry and businesses. He believed that a web of regulation was strangling private enterprise in the United States and harming the nation’s economy. Reagan was not the only politician to address the explosion of federal regulation and the public discontent it produced. In the late 1970s, liberals and conservatives in Congress worked with President Jimmy Carter to deregulate the airline, trucking, railroad, and financial industries, mainly by eliminating government regulations that restricted competition.

Despite Reagan’s anti-regulatory rhetoric, the administration’s success in eliminating and simplifying regulations was mixed. His success varied from agency to agency; in some of them, Reagan appointees managed to slow the promulgation of new regulations, while in others the bureaucracy held sway. One issue on which Reagan’s action matched his rhetoric was the end of price controls on oil, which he ordered upon entering office. Prices fell immediately. Reagan also ordered the relaxation of regulations guiding corporate mergers, setting off a flurry of both hostile and friendly takeovers.

These actions had public support. But Reagan’s decision to reverse regulations designed to limit air pollution, to protect the public from carcinogens and hazardous waste, and to oversee nuclear power plants generated a political backlash. Labor unions, consumer advocacy groups, and concerned citizens—with congressional support—launched counter-attacks in the courts that forced the administration to retreat from many of its deregulatory efforts. As a result, most of the Nixon, Ford, and Carter-era regulations designed to protect the environment and American workers remain in place.

The key points of Reagan’s foreign policy were covered previously in this document in the Cold War and terrorist sections. There was the Iran-Contra business, involvement in Lebanon, El Salvador, and others. We also discussed his “Star Wars” defense plans. The following discussion about his interactions with the Soviet Union, and Mikhail Gorbachev will complete the picture.

Reagan and Gorbachev

Time magazine put Reagan and Soviet leader Yuri Andropov on its year-end cover in 1983, designating them both as “men of the year.” The two leaders were shown stern-visaged and back-to-back; the accompanying story raised the spectre of nuclear war. Meanwhile in Moscow, the chief of staff of the Soviet armed forces claimed that the United States “would still like to launch a decapitating first strike.” But at this low point of relationships between the nuclear superpowers, diplomats on both sides were planting the seeds of a new relationship that would take root in the contentious ground of the Geneva summit in 1985 and blossom into the arms-control treaties that presaged the end of the Cold War.

Many accounts of this turn in the U.S-Soviet relationship would assert that Reagan changed his approach to the Soviet Union during his second presidential term. Reagan did not see it that way. He believed his policies were of a piece and was convinced that the U.S. military buildup would inevitably lead to negotiations in which the Soviets would see that nuclear arms reductions were to the mutual benefit of both sides. Reagan acknowledged to his diary that not everyone in his administration shared his optimism. “Some of the NSC staff are hard line and don’t think any approach should be made to the Soviets,” Reagan said in his diary entry for April 6, 1983. He concluded it by saying that he wanted to show the Soviets “there is a better world if they’ll show by deed that they want to get along with the free world.” In January 1984, with U.S.-Soviet relations apparently at a toxic stage, Secretary of State Shultz met with Soviet ambassador Anatoly Dobrynin to see if a path could be found to what Shultz called “realistic engagement” between Moscow and Washington.

The main impediment to that reengagement was instability in the Soviet leadership. Andropov, a former head of the KGB, had become the Soviet leader after the death of Leonid Brezhnev in 1982. He was potentially a creative leader but suffered from kidney failure during most of his short reign in power. Andropov died on February 9, 1984, and was succeeded by Konstantin Chernenko, who was suffering from pulmonary emphysema and other ailments. Chernenko, who had been Brezhnev’s intimate aide, was the last of the reactionary old-guard Soviet leaders. He rarely appeared in public or, as Reagan observed, said anything without a script, but did abandon the confrontational approach of his predecessors to the United States. Chernenko died on March 10, 1985, He was succeeded by Mikhail Gorbachev, a vigorous 54-year-old Andropov protégé with an innovative mind who recognized that the Soviet economy could not survive without serious reforms. He also hoped for better superpower relations. By 1986 and 1987, Gorbachev had determined that a more radical approach was needed in both domestic and foreign affairs. He believed that the restructuring of the Soviet economy (“perestroika”) could only occur if accompanied by political liberalization (“glasnost”). Political and economic reforms, in turn, were possible only with better superpower relations. A less antagonistic Soviet-American relationship, Gorbachev believed, would permit a shift of money and resources away from the Soviet military toward the suffering economy.

Reagan sensed that Gorbachev was a different sort of Soviet leader and was encouraged in this direction by British Prime Minister Margaret Thatcher, who had met with Gorbachev before his ascension to power. At a December 22, 1984, meeting at Camp David, Thatcher told Reagan that Gorbachev was “an unusual Russian” who was open to discussion. Reagan fired off a letter to Gorbachev when he assumed power, asking for a meeting. In November 1985, Reagan and Gorbachev met for the first time in Geneva; they held additional summits in each of the succeeding years of the Reagan presidency. The Geneva meeting, while short on specific agreements, laid the foundation for the other three summits. Reagan and Gorbachev argued freely but also developed the symbiotic relationship that served them in good stead. The Strategic Defense Initiative (SDI) emerged at the Geneva summit as a key sticking point in the U.S.-Soviet relationship but also as leverage for a potential arms agreement.

The other sticking point was Soviet occupation of Afghanistan; Gorbachev gave strong signals at this meeting that he wanted to find a way out. The next summit between Reagan and Gorbachev occurred in Reykjavik, Iceland, in October 1986. During the preceding year, Gorbachev had accelerated his political and economic reforms at home, but U.S.-Soviet arms negotiations remained stalled. Two days of high stakes talks, often unscripted, produced a remarkable opportunity as Reagan and Gorbachev galloped ahead of the talking points provided by their advisers and discussed the elimination of all nuclear weapons. As Alexander Besstmertnykh, then the Soviet deputy foreign minister, said in an evaluation of this meeting years later: “Gorbachev believed in [doing away with nuclear weapons]. Reagan believed in that. The experts didn’t believe but the leaders did.” But the Reykjavik summit collapsed when Gorbachev insisted that any American work on SDI be confined to the laboratory. Reagan refused, telling Gorbachev that he “promised the American people” that he would not give up SDI. When Gorbachev persisted in his position, Reagan abruptly ended the meeting.

Because the leaders reached no agreement, Reykjavik was in its immediate aftermath seen as a failure in both the United States and the Soviet Union. Instead, it proved a breakthrough. Reagan’s stand had made it clear to Gorbachev that the President would never yield on SDI, and Gorbachev had other, more pressing problems. The unpopular war in Afghanistan was a bleeding sore, and the Soviets privately told the United States that they intended to remove their troops from Afghanistan before the end of Reagan’s term. Gorbachev declared that the “military doctrine of the Warsaw Pact . . . is subordinated to the task of preventing war, nuclear and conventional.” Meanwhile, encouraged by the discussions at Reykjavik, American and Soviet negotiators crafted a treaty that removed intermediate nuclear missiles from Europe, the first pact of the Cold War that actually reduced the number of nuclear weapons rather than merely stabilizing them at a higher level. Gorbachev and Reagan signed the INF Treaty in December 1987 while the Soviet leader made a triumphant visit to Washington, D.C. Reagan’s desire to lessen the chances of nuclear war and the revolutionary changes in Soviet policy at home and abroad—which by 1987 were beginning to spin out of Gorbachev’s control—had resulted in a landmark treaty that called for the destruction of more than 2,600 Soviet and American nuclear weapons.

Superpower relations continued to improve during Reagan’s final year in office. While progress toward a strategic nuclear weapons treaty was too slow to bear immediate fruit, it was clear by the end of the Reagan presidency that such a treaty was in the offing. (President George H.W. Bush and Gorbachev signed the Strategic Arms Reduction Treaty in 1991.) In December 1988, at the very end of Reagan’s presidency, Gorbachev announced in an address to the United Nations in Washington that he would unilaterally reduce Soviet military forces in Eastern Europe by 500,000 soldiers and 10,000 tanks over the next two years.

The capstone of the Reagan-Gorbachev relationship, however, occurred in June 1988 when Reagan visited the Soviet Union. The symbolism of the trip was powerful and undeniable. Reagan, the most outspoken anti-Communist elected to the American presidency, met Soviet citizens in Red Square and spoke to students at Gorbachev’s alma mater. When a reporter reminded him of his 1983 description of the Soviet Union as an “evil empire,” Reagan replied, “I was talking about another time, another era.”

By the time Reagan’s presidency concluded, the Cold War was not formally over, but its end was in sight. Many people contributed to this achievement, including Secretary of State Shultz and Gorbachev’s able foreign minister, Eduard Shevardnadze, but Reagan and Gorbachev deserve the principal credit. In his book, Reagan and Gorbachev: How The Cold War Ended, career diplomat Jack F. Matlock, himself a key player in the U.S-Soviet negotiations, wrote that Reagan and Gorbachev were willing to depart from the position papers that had been written for them and make up their own minds on critical issues. “Both were willing to take political risks, and both were skilled in judging the degree of risk in their respective, very different societies,” Matlock wrote. “They didn’t always get things right, but on the most critical issues, they finally did.”

President George H. W. Bush

George Herbert Walker Bush was born in Milton, Massachusetts, on June 12, 1924. He was the first president for some time that was not born into a poor family. His father was an investment banker and later a Republican Senator from Connecticut (1952-1963). George graduated from a boarding school in 1942 and enlisted in the Navy. He served as a pilot in the Pacific theater. He left the Navy in 1945 and enrolled at Yale University where he got a degree in economics.

After graduation, Bush chose to go out on his own. Rather than stay in the Northeast, Bush moved with his wife and young son to Midland, Texas, where he began working in the oil industry as a salesperson for Dresser Industries, which was owned by an old family friend. In 1950, Bush and a friend formed an oil development company in Midland. Three years later, they merged with another company to create Zapata Petroleum. In 1954, Bush became president of a subsidiary, Zapata Off-Shore Company, which developed offshore drilling equipment. He soon relocated the company and his family to Houston, Texas.

He got involved in politics and made an unsuccessful try for the Senate in 1964. In ’66 he was elected to the House of Representatives and served two terms before making another unsuccessful try for the Senate. In the House he had made a good impression on Nixon who appointed him Ambassador to the United Nations. In 1973 Nixon asked him to serve as chairman of the Republican National Committee. When Ford became President he appointed Bush U.S. Envoy to the Peoples Republic of China. After two years he returned to the U.S. to serve as Director of the CIA.

After Carter’s election Bush returned to Texas and began planning a run for the Presidency. His campaign was no match for Reagan’s, but Reagan offered him the second spot on the ticket.

The following is from the Miller Center of Public Affairs:

[As Vice President] Bush chaired a number of task forces for the administration, including one on regulatory reform and one on drugs and drug smuggling. He traveled widely as vice president and frequently represented the administration in international affairs, making many contacts that would become useful when he became President. The vice president was often involved in the administration’s foreign policy discussions and occasionally influenced its decisions.

However, his ties to the administration’s foreign policy almost damaged his career irreversibly. In November 1986, the Iran-Contra affair broke. The scandal involved the administration selling arms to Iran to free hostages held by a terrorist organization in Lebanon and then using some of the money from the arms sales to buy weapons for the Contras, a rebel group fighting against the Sandinista government in Nicaragua. Selling arms to Iran violated U.S. policy, and buying weapons for the Contras was against the law. A number of officials in Reagan’s administration resigned over the scandal. Bush was hit hard by speculation of his involvement in the whole affair. Did he knowingly support the plan? Or was he “out of the loop” as he claimed? Although questions still remain about the Iran-Contra affair, most sources believe that Bush was neither involved in crafting the policy nor knowledgeable about its implementation.

Bush as President

In 1988 Bush began his second run for the top office. Others who were also vying for the job were Senator Robert Dole of Kansas; Pat Robertson, an evangelical leader; and Representative Jack Kemp from New York. This time Bush succeeded.

In his acceptance speech at the convention, Bush stressed the successes of the Reagan years and his ability to continue to build on them. He pointed to his military service in World War II and his years of public service. He pledged to round out some of the harsher edges of the previous administration, stating that he wanted “a kinder and gentler nation.” And famously, he promised not to raise taxes: “Read my lips: no new taxes.

When Bush took office in 1989, the federal budget debt stood at $2.8 trillion, three times larger than it had been in 1980. This financial situation severely limited the President’s ability to enact major domestic programs. The federal government did not have the revenues for any large, new domestic ventures, nor did the political climate lend itself to enacting them. To compensate for these constraints, Bush stressed “a limited agenda,” that included volunteerism, education reform, and anti-drug efforts. President Bush did not come into office promising to preside over an era of great change; he won the presidency basically vowing to maintain the status quo and preserve the legacy of his predecessor.

Having pledged during the campaign not to raise taxes, the President found himself in the difficult position of trying to balance the budget and reduce the deficit without imposing additional taxes on the American people. He also faced a Congress controlled by the Democrats. Although Republicans thought that the government should approach the budget deficit by drastically cutting domestic spending, the Democrats wanted to raise taxes on the richest Americans.

Budget negotiations for the 1991 fiscal year proved especially contentious and problematic. Bush had no choice but to compromise with Congress, and his administration entered into lengthy talks with congressional leaders. The President had Chief of Staff John Sununu, Director of the Office of Management and Budget Richard Darman, and Secretary of the Treasury Nicholas Brady lead the discussions. In June 1990, Bush issued a written statement to the press, reneging on his “no taxes” pledge made during the campaign, noting that tax increases might be necessary to solve the deficit problem. In October, after a brief government shutdown that occurred when Bush vetoed the budget Congress delivered to him, the President and Congress reached a compromise with the Omnibus Budget Reconciliation Act of 1990. The budget included measures to reduce the deficit by cutting government expenditures and raising taxes. Many conservative Republicans felt betrayed when Bush agreed to raise taxes, or to include “revenue increases” as he called them in his statement after signing the bill.

On top of the budget crisis, Bush started his presidential tenure as the Savings and Loans industry was collapsing. The federal and state governments had deregulated the industry in the late 1970s and early 1980s, and the S&L industry ventured into riskier investments that destabilized it. In February 1989, with many S&Ls failing, Bush proposed a plan to help bail out the industry. The President reached a compromise with Congress that ended up costing taxpayers more than $100 billion. The collapse of the Savings and Loans and the subsequent government bailout only added to the difficult financial environment that Bush confronted during his presidency.

Two significant pieces of legislation that were passed during his Presidency were the “Americans with Disabilities Act” (not popular with conservatives) and the “Clean Air Act” (more broadly supported).

President Bush approached foreign affairs with his characteristic conservatism and pragmatism. He did not rush into new actions or policy changes but gave himself time to consider the administration’s policies. When he acted, he did so with firm conviction and determination. His past experiences gave him significant experience in foreign affairs, and he relied on the many contacts within the international community he formed as ambassador to the United Nations, U.S. envoy to China, director of Central Intelligence, and Vice President.

One example of Bush’s conservative and pragmatic approach to foreign affairs occurred early in his administration. In June 1989, the Chinese military suppressed a pro-democracy movement demonstrating in Beijing’s Tiananmen Square. Using tanks and armored cars, the military crushed the demonstrations and fired into the crowd, killing hundreds of protestors. Although Bush abhorred the Chinese government’s violent crackdown in Tiananmen Square, he did not want to jettison improved U.S.-Sino relations by overreacting to events. Many in Congress cried out for a harsh, punitive response to the Chinese government’s killing of peaceful protestors, but the Bush administration imposed only limited sanctions. Later in his administration, Bush sent Brent Scowcroft and Lawrence Eagleburger, deputy secretary of state, to China to try to repair the damaged, but not destroyed, relationship. In the end, U.S.-Sino relations, while always somewhat fragile, have generally thrived, particularly in the economic realm, where both nations have benefitted from a robust trading partnership.


Throughout the Cold War, the United States had been involved in trying to stop the spread of Communism in Latin America and had established contacts throughout the area. One U.S. informant was Manuel Noriega, a Panamanian who began to work for the CIA as early as the late 1960s. Bush first encountered Noriega as director of the CIA when the agency relied on the Panamanian for intelligence. The Reagan administration initially saw Noriega as an ally because he opposed the Sandinista government in Nicaragua. When Noriega began to aid the Sandinistas and became increasingly involved in the international drug trade, the U.S. government tried to cut its ties with him. But Noriega continued to increase his power within Panama; in 1983 he assumed control of the Panamanian military, becoming a military dictator who essentially ruled the country. After Noriega was indicted by a federal grand jury in 1988 on drug trafficking charges, his relationship with American military and intelligence agencies came increasingly under fire by congressional Democrats. Members of Congress demanded that the Reagan administration and later the Bush administration bring the Panamanian strongman to justice.

In December 1989, the Bush administration was notified that Noriega’s military forces had killed a U.S. serviceman and attacked another serviceman and his wife. The administration now believed that it had the justification it needed to remove Noriega from power. On December 20, the U.S. military launched “Operation Just Cause” with about 10,000 forces landing in Panama and joining the 13,000 already there to quickly overtake the Panamanian military. Noriega went underground and eventually took refuge at the Vatican’s embassy in Panama City. He surrendered to U.S. forces in early January and was taken to Miami, Florida, where he was eventually convicted on drug charges and sent to prison.

“Operation Just Cause” was generally hailed as a success and bolstered Bush’s reputation as a strong, decisive leader. It was the largest military troop deployment since the Vietnam War and resulted in few causalities and a U.S. victory. Although it violated international law and was denounced by the Organization of American States and the United Nations, polls indicated that a large majority of Panamanians supported the U.S. invasion. The operation also gave the administration the unintended benefit of improving its crisis management, which helped the Bush team months later when Iraq invaded Kuwait.

Cold War & Soviet Union

Bush’s relationship with Gorbachev began with what the Soviets called the pauza (pause). With his instinctual caution, the President wanted time to study the situation before moving forward with his own policy. Although the Soviets were concerned that Bush’s pauza indicated a new direction in U.S. foreign policy, it actually helped consolidate the improved U.S.-Soviet relations.

When East Germany opened its borders and Germans tore down the Berlin Wall separating East and West Berlin in early November 1989, it marked a symbolic end to Communist rule in Eastern Europe. In the minds of many, the Cold War was over. Bush offered a muted response at a press conference on November 9: “I’m very pleased.” When the press questioned his lack of enthusiasm over the collapse of the Berlin Wall, Bush responded by stating, “I am not an emotional kind of guy.” In retrospect, many people recognized that by refusing to gloat or declare victory over the Soviet Union, Bush probably helped avoid a backlash by hardliners in Eastern Europe. He also did not want to endanger future negotiations with the Soviet Union. Still, Bush’s restrained response to the collapse of Communism in Europe, while diplomatically deft, cost him dearly at home among his conservative supporters who argued that Ronald Reagan would have celebrated this historic development with some type of public address.

Persian Gulf War

On August 2, 1990, Iraq invaded its neighbor Kuwait. Saddam Hussein, the President of Iraq, had long held designs on Kuwait’s land, wealth, and oil. Although intelligence agencies had watched Iraq’s military buildup along its border with Kuwait, both the United States and Iraq’s Arab neighbors did not believe that Hussein had plans to invade the small country to its south. But they misread Hussein’s intentions. The invasion violated international law, and the Bush administration was alarmed at the prospect of Iraq controlling Kuwait’s oil resources.

Despite being somewhat caught off guard, the Bush administration went to work immediately trying to assemble a coalition to oppose Iraq. One fortunate turn of events for the administration was that, at the time of the invasion, President Bush was with Prime Minister Margaret Thatcher of Britain at a conference, and Secretary of State Baker was in Siberia with Eduard Shevardnadze, the Soviet foreign minister. This allowed the United States to issue strong condemnations against Iraq with Britain, and most surprisingly, the Soviet Union. James Baker credited this moment, when the United States and Soviet Union issued a joint statement condemning Iraq’s actions, as the end of the Cold War because it marked the beginning of unprecedented cooperation between the United States and the Soviet Union.

When the invasion began, Arab countries joined with the United States to form a coalition to convince Iraq to withdraw from Kuwait or face the consequences. When Saudi Arabia became concerned about a possible invasion after Iraqi troops began to mass on the border, President Bush announced the deployment of U.S. troops to the desert kingdom. He also articulated the four principles that guided “Operation Desert Shield”: the immediate and complete withdrawal of Iraq from Kuwait; the restoration of the legitimate Kuwaiti government; the stability and security of the Middle East; and the protection of Americans abroad.


After months of resolutions and diplomatic efforts, the situation still had not changed. Iraq seemed unwilling to withdraw from Kuwait, and the Bush administration was not convinced that the economic sanctions could convince Hussein otherwise. In November, the UN Security Council passed Resolution 678, which authorized member states “to use all necessary means” to make Iraq withdraw from Kuwait if it had not done so by January 15. As the deadline loomed, the President often spoke of the situation in moral terms and cast Saddam Hussein as the embodiment of evil, highlighting the dictator’s human rights violations.


“Operation Desert Storm” began on January 17, 1991, when U.S.-led coalition forces began massive air strikes against Iraq. The coalition launched the ground war on February 24 and quickly overwhelmed the Iraqi forces. Coalition troops reached Kuwait City by February 27, and a ceasefire was declared the next day. On March 3, General Norman Schwarzkopf, commander in chief of the U.S. forces, met with the Iraqi leadership to dictate the terms of the ceasefire. The war had ended in less than two months, and the Bush administration had successfully committed to the largest military action since the Vietnam War without getting bogged down or suffering high casualties. (One hundred and forty eight U.S. soldiers were killed in the Persian Gulf War.) On March 6, President Bush addressed a joint session of Congress and declared, “tonight Kuwait is free.”

Despite these successes, Bush lost reelection in 1992 when the American people, concerned about the economy, voted for change.