1988: United States

THE PRESIDENCY

Ronald Reagan neared the close of his presidency in 1988 having recovered from the worst of the personal and political setbacks dealt him a year earlier by the one-two punch of health problems and the Iran/contra scandal. Although he added little in the way of new programs or accomplishments that measured up to the busy years of his first term, Reagan could lay claim to one measure of political success by being the first president since Dwight Eisenhower to face the prospect of completing two full terms and leaving office with some of his popularity intact.

Although he began the year still basking in the glow of the successful December 1987 summit meeting in Washington with Soviet leader Mikhail Gorbachev, Reagan could not avoid the normal loss of power and influence that befalls a lame-duck president. He did not offer any major new initiatives in his January State of the Union address. The budget, which he had used in his first term to change the direction of government, had been preordained the previous November by a bipartisan compromise plan. His massive defense buildup had tailed off. Efforts to bring about a Middle East peace conference remained stalled. After years of political warfare, the administration seemed to realize that time had run out on efforts to win a political mandate at home for its policies in Central America. And even Reagan's Moscow summit with Gorbachev in late May and early June turned out to be heavier on ceremony and rhetoric than on substance.

Foreign Affairs.

U.S.-Soviet Relations.

Traveling for the first time to the country he once described as the 'evil empire,' Reagan went to Moscow on May 29 for his fourth summit meeting with Gorbachev. But the five days of meetings, speech-making, and ceremonial events displayed, in the words of one news account, more 'stagecraft than statecraft.' Reagan and Gorbachev were unable to make significant new strides on arms control despite hopes they had expressed at their December 1987 meeting for achieving a treaty reducing strategic arms. The two still had serious disagreements over Reagan's Strategic Defense Initiative, the missile defense program popularly known as Star Wars; there were also thorny unresolved issues about how such a treaty would deal with weapons like mobile missiles and air-launched cruise missiles. The best Reagan and Gorbachev could do at the summit was to reaffirm their goal of an agreement that would cut long-range nuclear arsenals by as much as 50 percent.

The most tangible arms control business occurred on the fourth day, when the two leaders exchanged the formal documents of ratification that put into effect the intermediate-range nuclear forces (INF) treaty. The treaty, eliminating all U.S. and Soviet nuclear missiles with ranges of 300 to 3,400 miles, had been signed at the Washington summit. The U.S. Senate had ratified the pact by a 93-5 vote on May 27, just in time for the Moscow meeting.

Reagan devoted much of his Moscow visit to the human rights issue. In hopes of encouraging further liberalization in the Soviet political and economic system, he pointedly praised Gorbachev's reforms. He pressed Gorbachev in private on human rights cases, gave a speech on religious freedom at the 13th-century Danilov Monastery, and irritated his Soviet hosts by meeting with more than 90 dissidents and 'refuseniks' (those refused permission to emigrate) at the U.S. ambassador's residence. In a speech to students at Moscow State University, Reagan set out his vision of American values and said the world was looking 'expectantly to signs of change, steps toward greater freedom in the Soviet Union.' He muddled his strong human rights message, however, by suggesting during a question-and-answer session with the students that Soviet restrictions on those who wanted to emigrate might be the fault of 'bureaucracy' rather than official policy. When the summit ended, Reagan appeared pleased with the outcome, but Gorbachev complained of 'missed opportunities' to make concrete progress on superpower issues.

Central America.

During the first half of the year, Panama overtook Nicaragua as Reagan's major political headache in Central America. U.S. efforts to get General Manuel Antonio Noriega to relinquish his de facto control of Panama came into sharp focus in February when Noriega was indicted by two Florida grand juries on a total of 15 counts of drug-smuggling and related charges. The administration was quick to support an abortive effort in late February by Panamanian President Eric Arturo Delvalle to fire Noriega from his post as chief of the Defense Forces. After the National Assembly instead replaced Delvalle with a Noriega ally, Reagan tried to step up the pressure on Noriega through economic sanctions. The administration also tried to negotiate a deal with Noriega, offering to dismiss the drug indictments against him and lift the economic sanctions against Panama if he agreed to step down and leave the country in August. But Noriega stunned Reagan aides on May 25 by rejecting the deal, which the administration thought was virtually concluded. American prestige abroad suffered, and the administration came under sharp attack at home for appearing to 'plea bargain' with an indicted drug trafficker. Even Vice President George Bush, in the midst of his own campaign for the presidency, distanced himself from the affair by saying he would not negotiate with drug dealers.

Reagan continued to have little success winning support for his policy of keeping political and military pressure on the Sandinista government in Nicaragua. In January he offered a scaled-down aid package for the U.S-backed contra rebels, proposing $36.25 million in assistance, of which only $3.6 million would be for military purposes. He also promised to consult with Congress before the military aid was actually released. But the House killed the bill, thus ending CIA support to the contras at the end of February (when previous funding ran out). Throughout the year, the debate over Central American policy was affected by political developments in the region. In January, Nicaraguan President Daniel Ortega Saavedra made surprise concessions on political reforms at a summit meeting of five Central American presidents, and in March the Sandinistas caught the administration by surprise when they signed a cease-fire pact with the contras. Congress then approved a package of $47.9 million in humanitarian aid to the contras and to children injured in the war; Reagan signed it on April 1.

But by summer the talks had broken down, and hope began to fade again about the prospects of a negotiated solution. In July the Nicaraguan government expelled U.S. Ambassador Richard Melton and seven other American diplomats on charges of inciting an antigovernment demonstration by 3,000 people that ended in a clash with the police. The United States replied by expelling eight Nicaraguan diplomats. These events, plus a new crackdown on the opposition press and radio by the Sandinistas, revived talk of a new contra aid package. But Senate Democrats moved in August to head off any renewal of military aid by pushing through a $27 million plan that would provide only humanitarian assistance to the contras through early 1989. The White House did not like the bill but accepted it, because there was little prospect Reagan would be able to impose his will on Congress over an issue on which he had met such resistance throughout his presidency.

Persian Gulf and the Mideast.

Hostile relations between the United States and Iran claimed a heavy toll in 1988 as Reagan stuck to his policy of using U.S. forces to ensure freedom of navigation in the Persian Gulf. In April, American warships destroyed two Iranian oil platforms in retaliation for the laying of a mine that seriously damaged the American frigate Samuel B. Roberts. In response, the Iranians launched a series of attacks on American targets across the southern Gulf, even though it was clear their assortment of warships and gunboats was no match for U.S. firepower. Six Iranian vessels were either disabled or sunk.

The outcome was far more serious when Iranian and American forces clashed again on July 3. During a skirmish with armed Iranian speedboats, the cruiser Vincennes mistook a civilian Iranian airliner for an attacking F-14 fighter plane and destroyed it with a heat-seeking missile, killing all 290 people aboard. A Pentagon inquiry blamed the mishap on 'human error' but found no culpability or negligence on the part of crew or captain given the combat situation in which they were operating. Reagan called the incident a 'terrible human tragedy' and offered to pay compensation to the families of the victims, but not to the Iranian government. Iran's reaction to the tragedy was relatively restrained. Shortly afterward, Iran accepted a United Nations-sponsored cease-fire in its eight-year war with Iraq, a move that eased tensions in the region. By September, there had been no attacks on shipping in the Gulf for two months, and on October 1 the United States switched from individual escorts of Kuwaiti ships to a 'zone' defense system.

In contrast, little progress had been made by the administration in bringing about peace talks between Israel and its Arab neighbors. U.S. support of Israel was strained by the harsh measures used by the Israelis to contain the Palestinian uprising in the occupied West Bank and Gaza Strip. Secretary of State George Shultz made several trips to the Middle East, pressing a proposal for a series of negotiations that would begin with an international conference, to include the Soviet Union, followed by talks between Israel and a joint Palestinian-Jordanian delegation. But Israeli Prime Minister Yitzhak Shamir staunchly opposed the plan, and the continued reluctance of King Hussein of Jordan to actively participate dimmed hopes for any breakthrough.

The Budget and Congress.

After the fierce clashes of previous years between the administration and Congress, the budget was tame business for Reagan in 1988. The White House and congressional leaders from both parties had agreed in late 1987 to a deficit-reduction package in an effort to counter the aftershocks of the October stock market crash. Reagan submitted a $1.09 trillion budget for fiscal 1989 that reflected that agreement. The increase in defense spending was the smallest ever sought by the administration. Reagan said he offered the fiscal plan even though it did 'not fully reflect my priorities.'

But Reagan's relations with Congress were rockier on several issues that got caught up in the 1988 election campaign. Despite his plea to 'rise above the pressures of an election year,' Congress overrode his veto of the so-called Grove City College bill, which restored civil rights protections that had been overturned in a 1984 Supreme Court ruling. The new law extended federal anti-discrimination statutes to cover entire agencies of state and local government, or entire colleges and universities, even if only one of their departments or programs received federal aid.

Reagan next clashed with Congress over a sweeping trade bill, objecting in particular to a provision that would require companies to give workers 60 days' advance notice of plant closings. The legislation also called for a tougher U.S. response to unfair foreign trade practices and strengthened the president's authority to act in this area. When the bill passed both House and Senate despite Reagan's promise to veto it, Reagan made good on his threat on May 24. The overwhelmingly Democratic House quickly overrode the veto, but the vote in the Senate fell short of the necessary two-thirds majority. In the end, however, Reagan also succumbed to election-year politics on the issue. Congress passed the plant-closing measure as a separate piece of legislation in July, and Reagan, under pressure from fellow Republicans, allowed it to become law without his signature. Congress then sent Reagan a revised version of the trade bill, which he signed, with some reservations, on August 23.

Also in August, Reagan vetoed a $299.6 billion defense authorization bill. His action, the 65th time he had exercised the veto, was seen as an effort to draw a line in advance of the fall campaign between strong-on-defense Republicans and weak-on-defense Democrats. Reagan objected to the cuts in his Strategic Defense Initiative, complained about a delay in the schedule for developing mobile launchers for the MX missile, and said arms control provisions would tie his hands in dealing with the Soviet Union. The defense authorization bill that he eventually signed, however, included only minor congressional concessions on these points.

Controversies and Court Cases.

Attorney General Edwin Meese, the last of Reagan's old California advisers still in a top post, resigned under fire on July 5. An independent counsel had conducted a 14-month investigation into possible conflicts of interest in Meese's involvement with a longtime friend, E. Robert Wallach; with the Wedtech Corporation, a defunct defense contractor; and with an Iraqi oil pipeline project. The counsel, James McKay, also looked into Meese's stockholdings in telephone companies at a time when he took part in regulatory matters affecting the industry. Meese claimed 'complete vindication' because McKay decided not to bring criminal charges (although the counsel's report said Meese was probably indictable in connection with the telephone company holdings and an apparent underpayment of taxes). Reagan stuck by Meese loyally throughout the controversy, but other Republicans were relieved to see him leave before the fall political campaign. In September the Justice Department's Office of Government Ethics issued a sharply worded memorandum criticizing Meese and saying that 'simply avoiding criminal conduct is not the mark of public service.'

On June 29, a 7-1 Supreme Court ruling upheld the 1978 law authorizing independent counsels (special prosecutors) to investigate charges against high-ranking officials in the executive branch; the decision rebuffed the administration and dealt a setback to two other longtime Reagan associates. Independent counsels had obtained the 1987 perjury conviction of former White House deputy chief of staff Michael K. Deaver and the February 11 conviction of former political director Lyn Nofziger on charges of illegal lobbying. The decision, written by Chief Justice William H. Rehnquist, rejected the Reagan administration's argument that Congress's authorizing independent counsels violated the constitutional separation of powers.

Public attention to the Iran/contra affair greatly receded in 1988. But the scandal reclaimed headlines in March when a federal grand jury delivered a 23-count indictment against former national security adviser John Poindexter, former National Security Council aide Oliver North, retired Air Force Major General Richard Secord, and Iranian-American businessman Albert Hakim. The indictment charged that the government had been defrauded by the diversion to the contras of profits from the secret U.S. sale of arms to Iran. Other charges focused on the withholding of information from Congress and efforts to cover up the aid to the contras. A few days before the indictments were handed down, Robert McFarlane, Poindexter's predecessor as national security adviser, pleaded guilty to four misdemeanor counts of withholding from Congress information on aid to the contras. Reagan told a group of college students that he believed North and Poindexter would be 'found innocent because I don't believe they were guilty of any lawbreaking or crime.'

Two books by former White House aides made unflattering revelations about Reagan. Former press secretary Larry Speakes admitted that on several occasions he had made up quotations that he attributed to the president (who said he had not known of the fabrications). And Donald Regan, a former chief of staff, disclosed that Reagan's schedule was influenced by an astrologer consulted by his wife, Nancy. Regan, whose departure from the White House in 1987 was reportedly strongly advocated by Nancy Reagan, also depicted the president as largely a figurehead who took little interest in substantive political leadership.

Staff Changes.

Predictably, there was a large-scale exodus of top-level officials as the administration neared an end. Chief of Staff Howard Baker, citing personal reasons, announced on June 14 that his resignation would be effective at the end of the month. The former Senate Republican leader had taken the job in February 1987 in the aftermath of the Iran/contra revelations and was credited with helping to bring Reagan and the White House out of the political tailspin caused by the scandal. Kenneth Duberstein, Baker's deputy, was named as Reagan's fourth chief of staff.

There was also a series of cabinet changes. On July 12, Reagan nominated former Pennsylvania Governor Richard L. Thornburgh to succeed Meese as attorney general. Treasury Secretary James A. Baker III announced his resignation on August 5 in order to run the presidential campaign of his longtime friend, Vice President Bush. Baker was succeeded by investment banker Nicholas F. Brady, also a close confidant of Bush. On August 9, Reagan chose Lauro F. Cavazos, president of Texas Tech University, as secretary of education to succeed the controversial William J. Bennett, who left office on September 20. On October 15, James C. Miller III, director of the Office of Management and Budget, resigned to do scholarly research; his deputy, Joseph Wright, succeeded him.

Election-Year Politics.

Reagan and his top aides made it clear they planned to go all out to aid Vice President Bush's campaign for the presidency. The effort got off to a rocky start when Reagan gave Bush a surprisingly terse endorsement at a Republican fund-raising dinner in May. But after Duberstein took over as chief of staff in July, White House efforts to help Bush were increasingly evident. Reagan let the plant-closing measure become law, thus depriving Democrats of a popular issue. His veto of the defense authorization bill on the grounds that the Democrats had weakened it complemented Bush's attacks on his Democratic opponent, Michael Dukakis. When Reagan signed a new fair-housing enforcement bill in September, he pointedly used the occasion to praise Bush for voting for a similar law when he was a congressman in 1968. Reagan's appointment of Brady as treasury secretary placed a Bush ally at the helm of economic policy for the duration of the campaign, and his nomination of Cavazos, a Texan and the first Hispanic-American ever named to the cabinet, was seen, in part, as an effort to help Bush in the key state of Texas. To avoid stealing the spotlight from Bush at the Republican National Convention in New Orleans in August, Reagan went back to Washington after delivering his farewell speech to the delegates, who greeted it with a thunderous outpouring of affection. In the fall Reagan used his formidable skills as a campaigner on Bush's behalf; he extolled the vice president's contributions to the administration and attacked Dukakis as a 'true liberal.' The administration also waited until after the election to make several announcements of policy changes that could have been damaging to the Bush campaign.

Transition.

After Bush's election victory, he and Reagan met in Washington with British Prime Minister Margaret Thatcher and West German Chancellor Helmut Kohl; a meeting was also scheduled with Gorbachev during his visit to the United Nations. Bush began the process of choosing his cabinet and staff by naming James Baker, his campaign manager and Reagan's former treasury secretary, as secretary of state. Bush also named Governor John Sununu of New Hampshire as White House chief of staff, and he announced that Nicholas Brady, Dick Thornburgh, and Lauro Cavazos would remain in their cabinet posts.

CONGRESS

Held against the backdrop of a hard-fought presidential election campaign, the last session of the 100th Congress began on a surprisingly bipartisan note. In the first eight months of the year, members agreed, among other things, to overhaul federal trade policy, ratify an arms-control treaty with the Soviet Union, provide drought aid to farmers, and expand Medicare to protect beneficiaries against 'catastrophic' medical costs. And Congress worked diligently to complete all 13 spending bills by the October 1 start of the new fiscal year (fiscal 1989). Much of the initial comity was due to broad acceptance of the legislative goals of certain bills, such as the catastrophic-illness measure. Also, agreement between Congress and the Reagan administration in late 1987 on overall spending targets for fiscal 1989 took away much of the partisan wrangling over budget matters that had marked previous years. Another factor was the determination of Democrats, in control of both houses, to show that their party could govern responsibly—a key campaign pledge of Democratic presidential nominee Michael Dukakis.

But the final days of the session were marked by partisanship. Democrats and Republicans tangled over antidrug legislation, bills to provide federal day-care assistance and to require employers to provide leave for parents of newborn or seriously ill children, and legislation authorizing defense programs. Throughout the session, the two parties also fought over ethics. Democrats sought to make a campaign issue out of the large number of Reagan administration officials who had been indicted, investigated, or forced out of office because of charges of corruption. Republicans waged a counterattack against the speaker of the House, Jim Wright (D, Texas). Through much of the year, Wright was forced to defend himself against charges that he had used his office for personal gain and that in talking to reporters about CIA activities in Nicaragua, he had released classified information. The House Ethics Committee began an investigation into the first matter and was considering a probe of the second.

Budget.

After seven years of rancorous debate over spending and taxes, congressional consideration of the fiscal 1989 budget was downright routine. Under the budget agreement reached in late 1987, the administration and Congress had set ceilings—in advance—for spending on defense and on domestic and international affairs; moreover, the Reagan administration's policies of restraints on taxes and spending had gained tacit acceptance among Democrats as well as Republicans. In June the House and Senate reached agreement on a $1.1 trillion fiscal 1989 budget resolution that largely rubber-stamped the earlier pact. The resolution called for a $135.3 billion deficit, just short of the $136 billion target set by the Gramm-Rudman deficit-reduction law. The only budget disagreements of the year arose during consideration of individual appropriations bills, as members tried to spread limited funds among competing domestic programs. But a vow by President Ronald Reagan in his State of the Union address to veto any so-called continuing resolution (wrapping government spending into one omnibus bill) spurred members to resolve their differences. With a flurry of last-minute activity, Congress finished action on all 13 appropriations bills just minutes before the October 1 deadline, the first time since 1976 it had met the target.

Defense and Foreign Policy.

Defense Spending.

The Pentagon's fiscal 1989 authorization bill became an election-year battlefield where the two political parties fought to define their positions on defense. When President Reagan vetoed a $300 billion defense authorization bill August 3, his action was widely seen as a move to boost charges by Vice President George Bush, who was about to become the GOP presidential nominee, that Dukakis and Democrats in general were weak on defense. Reagan complained that the bill, cleared by Congress on July 14, cut too much of the money he had requested for a new mobile version of the MX missile and for the Strategic Defense Initiative (SDI), his antimissile system, popularly known as Star Wars. Reagan also objected to arms control provisions, especially one to retire two aging missile submarines, and provisions restricting the Pentagon's ability to shift SDI funds among different projects.

Democrats quickly acknowledged that they did not have the votes needed to override the veto; some threatened to counterattack by highlighting an unfolding administration defense-procurement scandal through legislation to overhaul the Pentagon's purchasing system. But in the waning days of the session, negotiations between the chairmen of the House and Senate armed services committees and Defense Secretary Frank C. Carlucci produced a bill everyone could live with. The revised measure, which dropped the restrictions on the shifting of SDI funds and raised from $500 million to $600 million the amount that could be spent on a mobile MX missile, cleared Congress on September 28, and Reagan signed the measure the following day. On September 30, Congress approved a $282 billion spending bill for the Pentagon that had been held up until differences over the authorization measure were resolved. The amount appropriated was only $747 million less than Reagan had requested.

INF Treaty.

Earlier in the year, Senate Democrats and the administration had found themselves at odds over another defense issue. As part of its consideration of a U.S.-Soviet treaty banning intermediate-range nuclear forces (the INF treaty), the Democrats insisted on an amendment stating that no president could repudiate, without Senate approval, treaty interpretations presented by administration aides during the ratification process. The provision, approved 72-27, was inserted because of an ongoing dispute over whether a 1972 treaty limiting antiballistic missile systems banned testing in space for the SDI program. With approval of the amendment, the treaty, the first U.S.-Soviet arms agreement since 1972, was approved May 27 by a vote of 93-5.

Contra Aid.

Although Congress continued to struggle with the administration over providing aid to the contra rebels in Nicaragua, the issue had faded from the political spotlight by late in the year. In its final action on the issue, Congress agreed September 30 to a nonmilitary aid package that included $27.1 million in humanitarian assistance to the contras through March 1989. Administration officials rejected suggestions from conservative Republicans that Reagan push for a military-aid package late in the year; the administration reportedly was reluctant to mount such an unpopular campaign so close to the November elections. Reagan's only aid request came at the start of the year, when he asked for $36 million for military and nonmilitary supplies for the rebels. The House rejected both that proposal and, after military aid expired at the end of February, an alternative humanitarian-aid plan crafted by Democratic leaders. A cease-fire agreement March 23 between the contras and Nicaragua's Sandinista government had cleared the way for congressional approval of a bipartisan package that included $18 million in nonmilitary aid through September.

Covert Operations.

In response to revelations of covert operations by the Reagan administration during the Iran/contra affair, the Senate agreed March 15 to require the president to notify Congress of all such covert activities within 48 hours. Although Reagan was expected to veto the measure, the 71-19 vote in its favor showed sufficient support for a veto override. However, strong Republican opposition in the House prevented that body from acting on the measure. Opponents charged that Democrats were merely using the legislation to embarrass Reagan for the Iran/contra scandal; Speaker Jim Wright's controversial remarks to reporters on CIA involvement in Nicaragua boosted Republican arguments that Congress could not be trusted with top-secret information.

South Africa.

Because of strong opposition from the administration and many Republicans, Congress failed to pass legislation that would cut off nearly all U.S. trade with South Africa unless that country's government took significant steps to eliminate its system of discrimination against nonwhites. The House passed a sanctions bill August 11 by a largely party-line vote of 244-132, and the Senate Foreign Relations Committee passed a similar measure September 14 on a straight party-line vote. Republicans, fearful that Democrats would make a veto of a sanctions bill a campaign issue, made no moves to amend the bill in committee, hoping to derail it quickly on the Senate floor. Their strategy worked. Democratic leaders, realizing a tough fight awaited, decided not to bring the bill up in the final days of the session.

Drugs.

As it had done during the campaign season two years earlier, Congress tried its best to show the American electorate that it was 'tough on drugs.' On September 22 the House passed a $2.1 billion omnibus antidrug package that included provisions permitting the death penalty for drug-related murders and easing the rule excluding the use in court of evidence obtained illegally by police. The measure also included a variety of civil penalties for users of relatively small amounts of drugs and funds for drug treatment and education programs. Despite Democrats' complaints that many provisions of the bill were of questionable constitutionality, the final vote in favor was 375-30. The Senate passed a similar $2.6 billion measure October 14 by a vote of 87-3. As its last legislative act, the 100th Congress agreed to a $2.8 billion compromise bill that retained the death penalty provision but dropped most of the provisions that critics said were unconstitutional. Despite the bill's ambitious goals, the constraints imposed by the Gramm-Rudman law meant that only $500 million was actually appropriated for the new drug programs for fiscal 1989.

Drought Aid.