Topic 16 - A Global Superpower Facing Change (1975-2000)

Lesson 1 - The Conservative Revolution

After the Nixon years, completed by Gerald Ford, Americans demanded change. Each of the next four presidents—Jimmy Carter, Ronald Reagan, George H. W. Bush, and Bill Clinton—had his own approach to meeting that demand. It was Reagan, however, who launched the most radical change—the conservative revolution.

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Start up

Look at the photo of Ronald Reagan on the campaign trail. What promises do candidates make?

Guiding Questions

What challenges did the administration of President Jimmy Carter face?
What was Ronald Reagan’s agenda as President?
How did President George H. W. Bush deal with domestic issues?
What social and economic goals did President Bill Clinton pursue?

Vocabulary

Academic Vocabulary

President Carter’s Administration

In 1976, Republicans nominated Ford for President. Democrats chose Jimmy Carter, the former governor of Georgia.

Carter had no experience in Washington, but used to his advantage the fact that he was a Washington outsider. He pointed out that “the vast majority of Americans . . . are also outsiders.” After years of scandal in Washington, Carter’s fresh face and promises of a new approach carried him to a narrow victory.

Carter’s term began with a whirlwind of activity. In his first year, the new President sent Congress almost a dozen major bills. They included reforms in the Social Security system and in the tax code. But Carter’s lack of experience in Washington hurt him. Congress refused to support his legislation.

The President did not fare much better with the problem of inflation, a general increase in the level of prices. When the government tried to slow inflation, prices only kept rising. Many families had trouble paying for food, clothing, and housing.

Although Carter was a Democrat, he adopted conservative solutions to the problem of high inflation. He cut government spending and appointed Paul Volcker as chairman of the Federal Reserve. Volcker used monetary policy to attack inflation by reducing credit and raising interest rates.

Carter also adopted a conservative position when he took steps toward deregulation, or decreased regulation, of the transportation industry. Reducing regulation increased free-market competition. In addition, new policies, such as the Airline Deregulation Act of 1978, brought lower prices for consumers.

In foreign affairs, Carter was a strong defender of human rights. The United States had signed the Helsinki Agreement just before he took office. Thirty-five nations pledged to respect basic rights such as religious freedom and freedom of speech. The United States, Carter said, should keep this pledge and not aid countries that violated human rights.

Analyze Images President Jimmy Carter, formerly governor of Georgia, attempted to use his position as a Washington “outsider” to bring change to the federal government.

Infer Why might an “outsider” appeal to voters?

The Iranian Revolution and Hostage Crisis

Even before Carter’s presidency, the United States was deeply involved in conflicts in the Middle East. Iran was ruled by a shah who had U.S. support. Then, in 1979, the Iranian Revolution forced the unpopular shah to flee. A religious leader, Ayatollah Khomeini (i yuh TOH luh koh MAYN ee), took control of Iran.

The shah had been a firm ally of the United States. The ayatollah was strongly anti-American. Where the shah had favored westernizing Iran, the new ruler wanted to enforce a strict, old-fashioned version of Islam. Neither leader, however, favored democracy.

In November 1979, President Carter let the shah enter the United States for medical treatment. In response, Iranian revolutionaries seized the American embassy and took 53 Americans hostage. The hostages were not freed until January 1981. The hostage crisis poisoned American relations with Iran for decades.

It also affected domestic politics. During the 1980 presidential election campaign, conservatives and Republicans criticized Carter for not successfully defending the overseas interests of the United States.

An Energy Crisis

The Iranian Revolution seriously disrupted oil production in Iran, which had been a major source of oil on the world market. Oil prices shot up, and Americans began to line up in cars at gas stations to buy gasoline, fearing that shortages would develop. Panic buying did lead to shortages in some places. Many Americans blamed President Carter’s foreign policy for the gas lines and shortages.

After Iranians took Americans hostage in late 1979, Carter blocked any further oil imports from Iran. Then, in September 1980, war broke out between Iran and its neighbor, Iraq. Both countries had been major oil producers. The war further reduced world oil supplies and kept gas prices high. The energy crisis undermined Americans’ confidence and led many Americans to oppose Carter’s re-election in 1980.

Analyze Images During the energy crisis of 1979, gas was in short supply in the United States. American drivers found themselves waiting in long lines at gas stations.

Cause and Effect Do you think the crisis changed Americans’ driving habits? Why or why not?

READING CHECK

Identify Supporting Details What conservative policies did Jimmy Carter adopt during his presidency to address economic problems?

What Did the Conservative Movement Demand?

By the election of 1980, many Americans had come to believe that high taxes and “big government” were causing national problems. “Government,” Ronald Reagan said, “is not the solution to our problems, government is the problem.” These ideas contrasted sharply with the dominant ideas of the 1960s and 1970s.

Smaller Federal Government

Since the 1930s, the federal government had grown steadily. President Franklin D. Roosevelt had begun this trend to help people through the Great Depression. Harry Truman, John Kennedy, and Lyndon Johnson continued the expansion. These liberal presidents believed that government should play a large role in managing the economy and providing social programs.

Beginning in the 1960s, a conservative movement warned against growing federal power. Arizona Senator Barry Goldwater led the way. He argued for a smaller government nearer the people.

Primary Source

“Our towns and our cities, then our counties and our states, then our regional compacts—and only then the national government. That, let me remind you, is the ladder of liberty built by decentralized power.”

—Barry Goldwater, Speech at Republican National Convention, July 16, 1964

By the 1980s, conservatives dominated the Republican Party. Led by Ronald Reagan, they believed that federal social programs had become too costly and that federal regulations kept businesses from growing. State and local governments, they argued, were closest to the people and should decide what regulations were needed.

Social and Political Causes

After decades of social change, many conservatives called for a return to traditional values. These included religion, family, and patriotism.

Reflecting the renewed emphasis on traditional values, evangelical Christian churches grew rapidly during the 1970s and 1980s. Evangelicals stressed personal conversion and sought to convert others. Evangelical ministers used television to widen their audience.

Many evangelicals took an active role in conservative political causes. In 1979, the Reverend Jerry Falwell founded the Moral Majority. The group aided political candidates who favored conservative religious goals, such as a constitutional amendment to allow organized prayer in public schools. In 1980, strong support from the Moral Majority and the other conservative religious organizations helped put Reagan in the White House.

READING CHECK

Summarize Why did conservatives support a more limited federal government?

The Reagan and Bush Presidencies

Reagan was a handsome man with a relaxed, friendly air. He had been a movie star before winning election as governor of California. His skill at presenting ideas in terms that ordinary people could understand earned him the nickname the Great Communicator.

In 1980, Reagan defeated Jimmy Carter for President. He was swept into office on a conservative tide. After an era of protests, high prices, and the humiliation of the Iran hostage crisis, voters embraced Reagan’s promise to “make America great again.” He was re-elected in 1984 by an even wider margin.

Analyze Images A campaign button depicts the 1980 Republican candidates for President and Vice President, Ronald Reagan and George H. W. Bush.

Infer How important are campaign slogans?

Reagan’s Economic Program

The new President’s first priority was his economic program, often called Reaganomics. He persuaded Congress to cut taxes. Reagan hoped that taxpayers would use the extra money to buy more and save more. Buying more would spur business growth. Saving more would allow banks to invest in new business ventures. Reagan also promised to cut federal spending to reduce the size of government.

The President persuaded Congress to slow down spending increases on social programs, such as welfare and aid to education. Critics charged that those cuts hurt the poor and children. Supporters responded that Reagan was just trimming programs that did not work.

A third goal of Reaganomics was deregulation. Reagan sped up an earlier trend toward the reduction of restrictions on businesses. He opposed all laws, for example, that required industries to install expensive antipollution devices.

After a slow start, the economy was booming by 1984. When Reagan left office, there were 16 million more jobs, while inflation had been held in check.

Analyze Charts One of the conservative goals listed was to reduce the size of the federal government.

Use Visual Information Choose one of the other goals in this chart that might also have reduced the size of government, and explain how it might have done so.

The Budget Deficit

Another of Reagan’s goals—a balanced budget—proved harder to achieve. A balanced budget requires the government to spend only as much as it takes in. While Reagan cut social spending, he sharply increased military spending. As military spending rose and taxes fell, the budget deficit soared. For 1986, the deficit jumped to $240 billion, more than twice as high as under any previous President.

Still, the economy continued to expand, and Reagan remained popular. For many Americans, he had succeeded in restoring faith in the presidency, which had been so badly tarnished in previous years.

Analyze Images These graphs summarize how Reaganomics was intended to affect the federal deficit.

Infer Was this result achieved?

Bush’s Economic Troubles

Reagan’s Vice President, George H. W. Bush, won a big victory in 1988. Bush vowed to continue Reagan’s economic policies, cutting the deficit without raising taxes. “Read my lips,” he pledged during the campaign. “No new taxes.”

Bush could not keep his promise. By 1990, he and Congress were deadlocked over which government programs to cut to reduce the deficit. Finally, Bush agreed to raise taxes to save some popular programs. Many conservatives felt betrayed.

As taxes rose, the economy grew weaker. To make matters worse, a banking crisis developed. Deregulation had led some banks to make risky loans. When those loans were not repaid, many banks failed. With banks unable or unwilling to make loans, the economy slowed.

Many businesses cut costs by downsizing, or reducing their workforces. Downsizing increased business profits, but also increased joblessness. These conditions soon produced a recession, an economic slump that is milder than a depression. The recession continued for more than a year.

Conservative Supreme Court Justices

Reagan and Bush appointed a total of five justices to the Supreme Court. (One of Reagan’s choices, Sandra Day O’Connor, was the first woman to serve on the Court.) The new justices were more conservative than the justices that they replaced.

The more conservative Court placed new limits on the rights of suspected criminals, as well as on the right of prisoners to appeal convictions. The Court made it harder for workers to win job discrimination cases. It also reduced busing, which some school districts had used since the 1960s to achieve racial integration in public schools.

READING CHECK

Identify Supporting Details What were the three major ideas upon which Reaganomics was based?

President Clinton Turns Toward the Center

Bush faced a stiff re-election challenge in 1992. Recession and unemployment continued. Bickering between Congress and the President left voters unhappy with Washington politics. The Democratic nominee, Arkansas governor Bill Clinton, promised more government involvement in areas ignored by Reagan and Bush.

On Election Day, voters signaled their dissatisfaction. Only 38 percent voted for Bush. Although he received less than half the popular vote—43 percent—Clinton won the highest number of votes. The remaining 19 percent went to Ross Perot, a Texas billionaire who ran as an independent candidate.

Improvements and Setbacks

President Clinton followed a middle-of-the-road course. On the one hand, he moved cautiously when he persuaded Congress to increase some taxes and reduce spending. Yet this caution brought success. Under Clinton, for the first time in over 40 years, the federal deficit began a steady decline.

On the other hand, Clinton pushed for bold reform of the healthcare system. In 1994, some 37 million Americans had no health insurance. Clinton called for a national system of health insurance for almost all Americans. After heated debate, however, Congress defeated the plan. Many Americans worried that it would be too costly and involve the government too deeply in their lives.

To many Americans, the struggle over healthcare showed that Washington was paralyzed. Democrats controlled both Congress and the White House, yet the President could not get his own plan enacted.

Expanding Trade

During the term of President Bush, the United States had negotiated with Mexico and Canada to conclude the North American Free Trade Agreement (NAFTA). Bush signed the agreement in October 1992, but he was unable to persuade Congress to ratify the agreement before he left the White House in January 1993.

In the United States opponents argued that, by allowing free trade with Mexico, where pay was much lower and there were fewer laws protecting the environment, the agreement would result in American jobs leaving the country. Among those opposing NAFTA were much of the labor movement. Many U.S. business leaders, however, supported NAFTA, arguing that it would open up markets for U.S. products.

When Bush signed NAFTA in October 1992, he was in the midst of a presidential campaign against Bill Clinton. Clinton agreed to support NAFTA if provisions were added to the agreement protecting the environment and labor rights.

Even after Canada and Mexico agreed to those changes, however, opponents of the agreement put up a fight. They believed the changes did not go far enough. In the end, though, Clinton convinced Congress to support the agreement.

NAFTA took effect on January 1, 1994. It opened the markets of all three North American countries to the free movement of trade and investment across borders. After the agreement took effect, trade among the three countries increased dramatically.

Analyze Images President Clinton signs a bill into law during a ceremony in the White House Rose Garden.

Summarize What is the procedure for a bill to become a law?

An Economic Boom

After Clinton took office in 1993, the U.S. economy recovered strongly from recession. Continuing for eight years, this was the longest uninterrupted period of economic growth in U.S. history.

The economy’s strong performance helped Clinton win re-election by a large margin in 1996.

Historians disagree on the reasons for the boom. Some believe that Clinton’s effort to trim the federal budget deficit strengthened the economy. Others point to sharply lower energy prices. Still others believe that economic growth was largely the result of using computers to make American workers more productive.

Clinton and the Conservatives

Despite the improving economy, voter frustration with Clinton’s healthcare plans helped Republicans win a resounding victory in the 1994 congressional elections. For the first time since the 1950s, Republicans held a majority in both the Senate and the House of Representatives.

Newt Gingrich of Georgia became Speaker of the House. Under his leadership, House Republicans drew up a “Contract With America.” This set of proposed laws included reducing social spending and environmental regulations and slashing taxes.

The President attacked many of the proposals as unfair to poor and middle-class Americans. After a bitter fight, he compromised with Congress on a plan to balance the federal budget by the year 2002. In fact, the economy grew so strongly that in 1998 the government reported a budget surplus, in which income exceeded spending. Over the next two years, the surplus grew even larger.

Congress and Clinton also compromised on welfare reform. The government limited the length of time a person could receive welfare benefits. In this way, it hoped to encourage unemployed Americans to find jobs.

Impeachment and Acquittal

Controversy engulfed Clinton’s second term. Federal prosecutors investigated Clinton for real estate dealings while he was governor of Arkansas. Prosecutors found no evidence of lawbreaking. However, they did accuse the President of lying under oath about an improper relationship with a White House intern.

Amid heated debate, the House voted to impeach President Clinton. For only the second time in history, the Senate tried a President. In February 1999, the Senate voted to acquit the President, and he continued in office until the end of his second term, in 2001.

Analyze Images Impeachment is a multi-step process.

Cite Evidence How are checks and balances involved in the impeachment process?

READING CHECK

Identify Supporting Details What factors encouraged economic growth during the Clinton administration?

Lesson Check

Did Reaganomics lead to a balanced budget? Explain.
What roles did Presidents Bush and Clinton play in the passage of NAFTA?
Understand Effects What was the Iran hostage crisis, and how did it affect President Carter’s political image?
Draw Conclusions What impact did religion have on American politics in the 1980s?
Identify Implied Main Ideas What was the “Contract With America,” and how did President Clinton respond to it?
Writing Workshop: Develop a Clear Thesis At the end of this topic, you will write an essay explaining what you’ve learned about the Cold War and the collapse of the Soviet Union. Do a little background research now—enough to decide on an interesting thesis, or central message. Write this thesis in one or two sentences that clearly communicate your main idea.

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