NASA never gave up on the idea of a space station after Skylab's reentry in 1979. The agency began lobbying politicians to support building a larger space station as soon as the Space Shuttle began flying, selling it as an orbital laboratory, repair station, and a jumping off point for lunar and Mars missions. NASA found a strong advocate in President Ronald Reagan, who declared in a 1984 speech:
America has always been greatest when we dared to be great. We can reach for greatness again. We can follow our dreams to distant stars, living and working in space for peaceful, economic, and scientific gain. Tonight I am directing NASA to develop a permanently manned space station and to do it within a decade.
In 1985, NASA proposed the Space Station Freedom, which both the agency and President Reagan intended to be an international program. While this would add legitimacy to the program, there were concerns within NASA that the international component would dilute its authority within the project, having never been willing to work with domestic or international partners as true equals. There was also a concern with sharing sensitive space technologies with the Europeans, which had the potential to dilute America's technical lead. Ultimately, an international agreement to develop the Space Station Freedom program would be signed with thirteen countries in 1985, including the European Space Agency member states, Canada, and Japan.
Despite its status as the first international space program, the Space Station Freedom was controversial, with much of the debate centering on cost. Several redesigns to reduce cost were conducted in the early 1990s, stripping away much of its functions. Despite calls for Congress to terminate the program, it continued, in large part because by 1992 it had created 75,000 jobs across 39 states. By 1993, President Bill Clinton attempted to significantly reduce NASA's budget and directed costs be significantly reduced, aerospace industry jobs were not lost, and the Russians be included. In 1993, the Clinton Administration announced that the Space Station Freedom would become the International Space Station in an agreement with the Russian Federation. This allowed the Russians to maintain their space program through an infusion of American currency to maintain their status as one of the two premier space programs. While the United States built and launched the majority of the International Space Station, Russia, Canada, Japan, and the European Space Agency all contributed components. Despite NASA's insistence that costs would be kept at a budget of $17.4, they kept rising and NASA had to transfer funds from other programs to keep the International Space Station solvent. Ultimately, the total cost of the station was $150 billion, with the United States paying for two-thirds. Following the Space Shuttle Columbia disaster in 2003, NASA was forced to rely on Russian Soyuz launches for its astronauts and the 2011 retirement of the Space Shuttle accelerated the station's completion.
In the 1980s, right after the first flight of the Space Shuttle, NASA started a joint program with the Department of Defense to develop the Rockwell X-30 National Aerospace Plane. NASA realized that the Space Shuttle, while a massive technological accomplishment, would not be able to live up to all its promises. Designed to be a single-stage-to-orbit spaceplane, the X-30 had both civil and military applications. With the end of the Cold War, the X-30 was canceled in 1992 before reaching flight status.