1990: United States

THE PRESIDENCY

George Bush had to contend with serious foreign and domestic challenges during 1990. Iraq's invasion of Kuwait in August posed a threat to Mideast oil supplies and raised the specter of a war involving American forces. The jump in oil prices triggered by this crisis shook an already weak U.S. economy and, in turn, made more difficult the task of cutting the enormous federal budget deficit. In October a budget deal the administration had negotiated with congressional leaders was resoundingly defeated on Capitol Hill, raising questions about Bush's effectiveness in dealing with domestic issues compared to his stronger foreign policy showing.

On the foreign policy front, support for Bush's handling of the Persian Gulf crisis, although it began to slip in the autumn, was generally strong. One clear foreign policy plus for Bush was his growing rapport with Soviet President Mikhail Gorbachev.

Persian Gulf Crisis.

Like the rest of the world Bush was taken by surprise when, in the early hours of August 2, Iraqi troops stormed over the border into Kuwait and quickly seized the tiny oil-rich sheikhdom. The invasion capped weeks of rising tensions; in July, Iraq charged that Kuwait had stolen billions of dollars worth of petroleum from the Rumaila oil field on the border and had sabotaged the Iraqi economy by driving oil prices down through overproduction. Although the Mideast had proved a quagmire for two previous administrations, Bush felt he could not ignore the dangers posed by the Iraqi move. Iraq's seizure of Kuwait put it in control of 20 percent of the world's oil supplies, and U.S. officials feared Iraqi President Saddam Hussein's next move would be to invade Saudi Arabia, an American ally, which has the world's largest reserves. In the longer term, administration officials were concerned about the balance of power in the Mideast if Saddam Hussein was not checked. Iraq was already an intimidating force with an army of a million troops and an arsenal of chemical weapons. In addition, Iraq was reportedly on the road to developing nuclear weapons.

Bush vowed that the Iraqi occupation of Kuwait would not stand and declared the integrity of Saudi Arabia to be a 'vital interest' of the United States. On August 8 he told the nation he had ordered a large-scale deployment of American combat troops and air power—dubbed 'Operation Desert Shield'—to protect Saudi Arabia against attack. Likening Saddam Hussein to Hitler, Bush warned that 'appeasement does not work' and said, 'A line has been drawn in the sand.' The U.S. administration moved quickly to assemble an armada in and around the Persian Gulf capable of enforcing an international blockade of Iraq (and also of participating in combat).

Bush did not let the Gulf crisis force cancellation of his planned three-week vacation. In mid-August he left Washington for his Kennebunkport, Me., retreat, where he mixed monitoring of the situation with golf and fishing outings that he did not allow even driving rainstorms to interfere with. To some it seemed Bush was concerned with not being perceived as a 'prisoner of the White House,' as Jimmy Carter was widely viewed during the Iran hostage crisis.

By November there were well over 200,000 American troops in the Gulf region, including those on ships; reservists had been called up (for the first time in crisis since the Vietnam War); and more troops were on the way. Concerned that the blockade would not (or at least not quickly enough) be sufficient to force an Iraqi withdrawal from Kuwait, the Bush administration moved to transform the military force from a defensive to an offensive one. On November 8, Bush announced a massive new deployment of land, air, and sea forces that could nearly double troop strength in the Gulf region by early 1991—'to insure ... an adequate offensive military option, should that be necessary.' Bush spent Thanksgiving Day with U.S. troops in Saudi Arabia and on warships, near the end of a trip to Europe and the Middle East that included talks with Egyptian, Syrian, and Saudi leaders and the ousted emir of Kuwait.

The international outcry over Iraq's action—and willingness to do something about it—was far greater than expected. The United Nations Security Council, which often had been hamstrung in past crises by divisions among Communist, Western, and Third World countries, passed a number of resolutions against Iraq, the first on the very day of the invasion. In what was seen as the first test of the new post-cold war order, the Soviet Union joined the United States in an unprecedented statement condemning Iraq and calling for an arms embargo. Bush and Gorbachev held an abruptly scheduled one-day summit in Helsinki, Finland, on September 9 to discuss the crisis. Despite differences about the continued presence of Soviet military advisers in Iraq and unease on Moscow's part about the U.S. military buildup, the two leaders said, 'We will be united against Iraq's aggression as long as the crisis exists.' Meeting again in Paris in November, Bush and Gorbachev discussed a proposed UN resolution— which was subsequently adopted—authorizing the use of force to oust Iraqi forces from Kuwait.

More than 20 nations sent smaller numbers of troops, ships, or warplanes to join U.S. forces in the Gulf region, including Egypt, Syria, Morocco, Great Britain, France, and Canada. The Kuwaiti government in exile, Saudi Arabia, Japan, West Germany, and the European Communities promised billions of dollars to help pay the military costs and assist Mideast nations suffering economically from the crisis.

The UN resolution, passed November 29, gave Saddam Hussein a deadline of January 15, 1991, to pull out of Kuwait, after which the forces arrayed against him could use 'all necessary means' to compel such a withdrawal. At a press conference November 30, Bush vowed: 'If there must be war ...if one American soldier has to go into battle, that soldier will have enough force behind him to win.' But Bush also said, 'I want peace, not war,' and he offered to meet in Washington with Iraq's foreign minister and to send U.S. Secretary of State James Baker to Iraq to meet with Saddam Hussein before the January 15 deadline. Iraq officially accepted the offer of direct talks on December 1.

For his part, Saddam Hussein sought to step up the pressure on the United States and its allies by refusing to let Westerners leave Iraq and Kuwait, initially including around 3,000 Americans. The Iraqis deployed some of these 'guests' at strategic sites, to serve as human shields against a potential American attack. Bush said that concern for these hostages would not stand in the way of potential U.S. action: 'America and the world will not be blackmailed.' Saddam Hussein ordered the release of foreign women and children in late August, and other Americans were subsequently evacuated, but over 900 U.S. citizens remained late in the year. Then, in an unexpected apparent policy reversal in early December, Saddam Hussein asked Iraq's Parliament to remove the legal ban preventing foreigners from leaving the country, and Iraq indicated that foreign hostages of all nationalities would be released.

Bush's performance initially won high marks in public opinion polls and broad support on Capitol Hill. But a New York Times/CBS News poll in mid-November indicated that support for his handling of the Kuwait situation had declined from a high of 75 percent to 50 percent. The same poll found that 51 percent felt that Bush had failed to explain clearly enough why the troops were sent. Most of the initial criticism from Capitol Hill was confined to Bush's policies before the invasion of Kuwait, with some Democrats suggesting that the administration's unwillingness to get tough with Iraq may have emboldened Saddam Hussein to make his grab for Kuwait. In October both the House and the Senate passed resolutions supporting Bush's military buildup in the Persian Gulf. But recalling the Gulf of Tonkin resolution that former President Lyndon Johnson used to justify U.S. military escalation in Vietnam, the lawmakers made clear that the vote of support was not an authorization for future use of force. After Bush announced the further troop buildup in November, some members of Congress urged him to call a special session so that Congress could vote on any proposed use of military force. A group of 45 House Democrats even filed a lawsuit aimed at preventing Bush from taking offensive action without explicit congressional authority.

Relations With the Soviet Union.

Relations with the Soviet Union were strained during the first part of the year by the Kremlin's crackdown on the tiny Soviet republic of Lithuania, which declared its independence in March. A Soviet economic embargo aimed at forcing Lithuania to back down set off protests in the United States. Another discordant note was the issue of German reunification, with Soviet leaders reacting sourly to Western insistence that the new Germany remain a member of NATO.

These differences were not resolved by the time Bush and Gorbachev held a May 31-June 3 summit meeting in Washington. But they took second place in importance to the personal rapport between the two leaders and to Bush's desire to show support for Gorbachev. As evidence of that support, Bush unexpectedly signed a trade agreement that represented the first step toward giving the Soviet Union most-favored-nation trading status. However, Bush made clear he would not send the pact to Congress for ratification until the Soviets made good on a promise to liberalize their emigration law.

In July, Bush and the other NATO leaders met in London and adopted several proposals aimed at making it easier for Gorbachev to overcome conservative opposition at home and reach an accommodation with the West on the shape of postcold war Europe. NATO undertook to scale back frontline defenses, amend its long-held 'flexible response' doctrine on first use of nuclear weapons, impose restrictions on the size of a reunited Germany's armed forces, and withdraw all U.S. nuclear artillery shells from Western Europe. Later in July, Gorbachev agreed to allow a reunified Germany to be a member of NATO; he also agreed to withdraw the 380,000 Soviet troops in East Germany over a period of three to four years.

The fact of German reunification plus the breakup of the Soviet bloc significantly changed the landscape when it came to the long-running negotiations on reducing conventional forces in Europe, paving the way for agreement by autumn on a force-reduction treaty. Bush (and Gorbachev) attended the mid-November meeting in Paris of the Conference on Security and Cooperation in Europe, at which the landmark treaty between NATO and the Warsaw Pact was signed. Bush stopped in Czechoslovakia and Germany before going to Paris and then on to the Middle East.

Other Foreign Affairs.

Panama Invasion.

In Panama, Bush achieved a long-cherished objective—the ouster of Panamanian dictator General Manuel Antonio Noriega. In December 1989, U.S. troops invaded the Central American country and installed a new government sympathetic to Washington, under President Guillermo Endara. Noriega himself at first eluded U.S. authorities, taking sanctuary in the Vatican's diplomatic mission in Panama City. But he surrendered to U.S. officials on January 3, 1990, and was thereupon flown to Florida to face charges related to drug trafficking and money laundering. (He had been indicted by two grand juries in 1988.)

Nicaragua.

Long-standing tensions with Nicaragua came to an end in February, when Nicaraguan opposition leader Violeta Barrios de Chamorro scored a surprise victory in the presidential elections, defeating Sandinista leader Daniel Ortega Saavedra. The Bush administration had channeled funds to her campaign, and Bush responded to her victory by lifting the U.S. economic sanctions that had been imposed on Nicaragua under President Ronald Reagan.

Budget Struggles.

In January, Bush proposed a $1.23 trillion budget for fiscal year 1991 (October 1, 1990, to September 30, 1991). He claimed the budget would meet the deficit target of $64.7 billion required by law while allowing him to keep his pledge not to raise taxes. Democrats promptly criticized Bush's budget for relying on overly optimistic economic forecasts and not cutting enough from defense outlays. As the economic outlook worsened and deficit projections rose, Bush met privately in May with congressional leaders and agreed to a budget summit that all sides would join 'without preconditions.' By June, Bush was forced to go further. He issued a brief statement acknowledging that 'tax revenue increases' would be necessary as part of any deficit reduction plan—a retreat from 1988 presidential candidate Bush's much-repeated campaign line, 'Read my lips: no new taxes.' The turnabout enraged many rank-and-file Republicans, who considered the no-taxes pledge to be their strongest issue in an election year.

As the administration's deficit estimate climbed to $231.4 billion in July, Bush had to give up more than his 'no new taxes' promise to reach a budget agreement with Congress. He retreated from another campaign pledge, to cut the capital gains tax, the tax on profits from the sale of stocks, bonds, real estate, and other investments. Bush had argued strenuously that a capital gains tax cut would spur the economy, but Democrats said they would not accept such a cut unless it was accompanied by an increase in tax rates for the wealthy. With the capital gains proposal dead, White House and congressional negotiators reached agreement on a five-year, $500 billion deficit-reduction plan just hours before the beginning of the fiscal year on October 1.

The budget deal, however, proved a recipe for political disaster, both for Bush and for congressional leaders of both parties. The package aimed to raise taxes by $134 billion over five years and cut federal benefit programs by $104.8 billion. The most difficult pills for lawmakers and their constituents to swallow included a phased-in 12 cents a gallon increase in gasoline taxes and almost $60 billion in Medicare cuts that would require most of the 33 million elderly and disabled Americans in the program to pay substantially more for health coverage. Conservative Republicans balked at the tax hikes and the surrender on capital gains. Liberal Democrats rebelled at the Medicare cuts and the perception that the program would hit hard at the middle class and leave the rich unscathed. Bush put his political and personal prestige on the line to win passage of the package. In a prime-time television address he appealed to the nation for support, saying that the agreement was easy to pick apart, but 'the political reality is [that] no one can put a better one back together again.' He followed the speech with an intensive lobbying campaign.

But the president failed to win over the public, or even members of his own party. On October 5 the House of Representatives voted, 254 to 179, to reject the budget package. Republicans voted against Bush by a 105 to 71 margin, many voicing outrage at the hardball lobbying tactics used by White House Chief of Staff John Sununu and Budget Director Richard Darman. Bush's immediate veto of a stopgap appropriations bill—designed to keep the government functioning while a new budget was negotiated—shut down nonessential government services, so that tourists hoping to see national parks and monuments found them closed over the Columbus Day holiday weekend. (The following week he signed another stopgap measure as budget negotiations continued.)

After the October 5 defeat, Bush's standing in the polls dropped sharply. A New York Times/CBS News survey in mid-October said that fears about the economy had helped push Bush's approval ratings down to 60 percent from an August high of 76 percent. The poll found that 58 percent of those surveyed disapproved of his handling of the budget deficit. Though Bush's ratings were still high compared to those of Ronald Reagan, Jimmy Carter, or Gerald Ford at the same points in their presidencies, the fall-off represented his first significant slide in popularity in 20 months in office.

The budget defeat was followed by a week of political chaos. Bush added to his own problems by appearing to change positions several times on whether he would accept a hike in income tax rates on the wealthy in exchange for a capital gains tax cut. After accepting this idea and then rejecting it later the same day, Bush eventually left the decision to Congress. These mixed signals produced a flurry of newspaper headlines about Bush's 'flip-flop,' but his own reaction to events was mostly subdued. 'Just stay calm—it will all work out,' he said at one point. What was finally worked out, and passed by Congress on October 27, was a plan largely crafted by congressional Democrats. It raised the top income tax rate from 28 percent to 31 percent, limited tax deductions for the wealthy, and increased the gasoline tax by only 5 cents a gallon; Medicare spending cuts were reduced to $42.5 billion.

To many Republicans, Bush had not only given the impression, during the budget battles, of indecisive leadership but had also given away the party's strongest campaign issue (no new taxes) only to put the Democrats in a position to portray themselves as the champions of the average American. In the weeks before the November 6 congressional and state elections, some Republican candidates seemed decidedly unenthusiastic about being seen with Bush on the campaign trail.

Defense Spending.

As the effort to craft an overall budget package went forward, in a separate arena, Democrats battled the administration over the defense budget. With the threat from the Soviet Union diminished, House Democrats passed a $283 billion Pentagon funding measure that cut $24 billion from what Bush had proposed. The measure canceled production of the B-2 'Stealth' bomber and slashed Bush's Strategic Defense Initiative ('Star Wars') spending request by about half. A Senate version also made sizable cuts in the Bush budget, but allowed for some additional production of the B-2. The final version signed by Bush called for total defense spending of $268 billion, with the B-2 program alive but much scaled down and Star Wars funding reduced.

A String of Vetoes.

Bush maintained his perfect record in veto showdowns with Congress. By the time Congress adjourned in late October, he had beaten back eight override attempts in the year (for an overall total of 16 vetoes sustained since he took office in January 1989). Defeating critics of his China policy, Bush made his veto stick on a bill barring deportation of Chinese students. The Senate fell two votes short of overriding Bush's veto of a measure that eased many of the restrictions on the political activities of federal employees. The House failed to override Bush's veto of a family leave bill, which would have required companies over a certain size to grant workers up to 12 weeks of unpaid leave to care for newborn or adopted children or seriously ill family members. Bush also vetoed a major civil rights bill, which would have made it easier for workers to sue employers over job discrimination, saying that it would result in hiring quotas; an override attempt in the Senate failed by one vote.

Son Under Scrutiny.

The thorny issue of the hugely expensive federal bailout of failed savings and loan associations struck close to home for Bush. His son Neil had been on the board of Denver's Silverado Banking, Savings and Loan Association, whose failure might cost taxpayers as much as $1 billion. The younger Bush, with his fellow directors, was sued by federal regulators, and he was accused of conflict of interest and gross negligence. The president steadfastly proclaimed full confidence in his son's innocence.

Supreme Court.

Bush made his first nomination to the Supreme Court when Justice William J. Brennan, Jr., 84, retired in July. He chose David H. Souter, 50, a little-known federal judge from New Hampshire. Bush's choice of an obscure jurist appeared to be a deliberate effort to avoid the problems that led to the 1987 defeat of Reagan nominee Robert Bork. Conservatives hoped that the liberal Brennan's successor would create a new majority for overturning Roe v. Wade, the landmark 1973 ruling guaranteeing a woman's right to abortion. Bush maintained that he had not asked Souter his views on abortion, and during confirmation hearings, Souter said he had not made up his mind on Roe v. Wade. The Senate voted to confirm Souter in October.

Midterm Elections.

The outcome of the 1990 midterm elections was both good and bad news for Bush. The Democrats gained one seat in the Senate and eight in the House of Representatives. The White House noted that the president's party traditionally loses more seats than that at midterm, but others pointed out that before the budget fiasco, the GOP had actually been hoping to make gains in 1990. Bush had campaigned hard on behalf of Republican gubernatorial candidates in Texas and Florida, but both lost. However, governorships in several other states, including California—the most populous—went to Republicans. Two days after the elections Bush announced that he would 'absolutely' not support any further income tax hikes.

Resignations.

Late in the year Bush accepted the first resignations of high-level members of his administration. First, Secretary of Labor Elizabeth Dole, the only woman to head a cabinet department, announced that she would leave her post to head the American Red Cross. Then, William J. Bennett, Bush's director of drug policy, stepped down, saying that his fight against drug abuse, which Bush had in 1989 termed 'the nation's gravest threat,' had been hampered by congressional opponents to his emphasis on law enforcement rather than treatment. Bennett was then picked to head the Republican National Committee. Outgoing Florida Governor Bob Martinez was named the new drug 'czar.'

CONGRESS

The 101st Congress headed into its final year with high hopes of ending the legislative paralysis caused by 1989's House leadership ethics scandals. But the burgeoning federal deficit, fears of recession, and the unwelcome necessity of new taxes in a year in which the entire House of Representatives and a third of the Senate had to face the voters at the polls left fractious lawmakers unable to make decisions on the federal budget for most of the 1990 session. President George Bush's $1 billion-a-month deployment of U.S. troops in the Middle East spelled further uncertainty for a Congress that had planned on substantial budget savings from the 'peace dividend' — money supposedly available because decreased tensions between the superpowers allowed reduced defense spending. Dozens of important bills, major items on the 1990 legislative agenda, stalled behind the budget issue.

Throughout much of the year, Bush held the upper hand in dealing with the Democratic-controlled Congress, which could not muster the votes to override his vetoes. Veto threats became a frequent and effective White House tactic in persuading Congress to modify legislation. But in the session's waning weeks, a congressional rebellion over the budget damaged Bush's prestige and dramatically worsened relations between the White House and Congress. The government found itself without the authority to spend money in the fiscal crisis precipitated by the raucous legislative battles.

Budget.