The Democratic ticket faced a fund-raising scandal that fall, around the allegation that the Democratic National Committee had accepted foreign campaign donations, but no smoking gun turned up. Ross Perot was running again as a third-party candidate, but this time, with the economy out of the doldrums and the deficit shrinking, he was a sideshow. Dole made a pretty shrewd vice presidential choice in Jack Kemp, the former congressman and secretary of housing and urban development, who was sincere in his belief that the Republican Party should do more to reach out to African American and poor voters. But still Dole could get no traction.
It was the lowest turnout for an election—just under 50 percent—since 1924, but once the votes were tabulated, Clinton had beaten Dole by about nine percentage points, and his victory in the electoral college was 379 to 159, even more impressive than his showing in 1992. The campaign-finance issue probably cost him a majority of the popular vote. He had sorely wanted that majority, but even so, he became the first Democrat to win reelection as president since Franklin Roosevelt. A lot of those Reagan Democrats who had left their party in 1980 had clearly come back. The Democrats were divided over some of the ways Clinton got there, but they couldn’t argue with the result.
But the Republicans still controlled Congress, and there was little reason to think much legislation would get passed. In mid-January 1997, a few days before his second inauguration, Clinton met with aides at Blair House to sketch out his second-term agenda. Carl Cannon, a top White House correspondent, reported the result as “scaled-down expectations in domestic policy.” The second term was looking as if it was going to be pretty uneventful.
7
Hitting His Stride
During his reelection campaign, Clinton used the rebounding economy as any incumbent president in his situation would. In his convention acceptance speech, he boasted of “ten million new jobs, over half of them high-wage jobs.” He bragged about reducing the deficit, which had stood at a record $290 billion the year he was elected, down now by 60 percent. The economy certainly was a net plus for him, but even so, the recovery wasn’t quite a political slam dunk. In Chicago during the final week of the campaign, Clinton talked up the economy, but his rhetoric was still decidedly cautious. “America’s awake,” he told his audience, “and moving in the right direction.”
It didn’t take long into the second term, though, to see that America had been doing something more than just waking up. The Dow Jones Industrial Average, which stood at 3,241 when Clinton took office, opened 1997 at 6,448, nearly doubled. Gains in 1995 and 1996 had been 33 and 26 percent, respectively, stratospheric numbers for the Dow. The NASDAQ exchange had also roughly doubled in value, from 696 to 1,380. (All these are nominal numbers, not adjusted for inflation.) The economy grew at a strong 3.8 percent in 1996, including an off-the-charts 7.2 percent for the second quarter. Median household incomes had gone up an enviable 7.3 percent during Clinton’s first term—compared to a 5.4 percent decline during George H. W. Bush’s four years.
Clinton and his supporters attributed all this to the 1993 budget, the one that passed by a single vote in each house of Congress. Specifically, they cited the decision to attack the budget deficit as the key decision that restored economic confidence. Conservatives argued, and have tried to argue ever since, that that is nonsense, and that Ronald Reagan had somehow made it all happen, years after leaving office. This partisan political quarrel will never be settled, but the fact is that, at the time, most voters were happy to give Clinton the bulk of the credit. As he opened his second term, his approval numbers sat just north of 60 percent.
There were signs aplenty in early 1997 that the economy was starting to roar. A leading factor had less to do with any policies that emanated from the White House than with the vast changes sweeping through the economy, namely the tech boom and what came to be called the “dot-com bubble.” The commercial growth of the Internet, starting in 1995 but coming into fuller flower by 1997, led venture capitalists to make huge (and occasionally quite unwise) investments in new Internet start-ups, as new companies held lavish and Gatsbyesque launch parties, built eye-popping corporate campuses, and inaugurated the soon-to-be-familiar practices of looser work rules—foosball tables in the corporate rec room and so on—that marked them as definitely not your father’s stodgy corporation. Glossy magazine articles, books, and movies glamorized these new hipster capitalists, and consumers were utterly amazed to find that a book could be ordered by tapping a few keys on their computers and then delivered right to their doorsteps. (Amazon.com began its online life in the summer of 1995, selling only books.)
It was one of those astonishing and rare moments in history: when we left one age and entered another, a new “information age” in which work and the economy—and play, too; oh, how play was transformed!—became driven by information stored on computers that could speak to other computers the world over. Social critics and theorists raised questions and doubts about what it meant to live in a “hyper-mediated” culture, and about the almost mystical fervor with which proponents greeted this new era. But the average person was quite comfortable with it all, and for capitalists it meant the potential for vast new riches made of money that hadn’t even existed before.
All this good news made for an optimism that gave Clinton some political breathing room—and plenty of leverage. So when the president sat down to negotiate a budget with Newt Gingrich and Trent Lott of Mississippi—Bob Dole’s successor as Senate majority leader—Gingrich didn’t threaten any shutdowns, and Clinton no longer had to protest that he was still constitutionally relevant. The latest economic statistics reinforced this dynamic. Growth for the first quarter of 1997 came in at a gaudy 5.6 percent, and the deficit was now projected to drop to just $71 billion. In such a climate, there wasn’t a lot the Republicans could do, and by May 2—absurdly early by the usual standards—Clinton and the Congress had reached a budget deal. The deal was history making in that the two sides agreed that by 2002 they would balance the budget—something that hadn’t happened since 1969.
In the deal, the Republicans got a capital gains tax cut and Medicare and Medicaid savings totaling about $140 billion over five years. In return for his concessions, Clinton won new investments in children’s health care, about $24 billion worth; an increase of $40 billion in higher-education spending; more money to urge businesses to hire welfare recipients; and restored health benefits for disabled legal immigrants, which the Republicans had eliminated in the previous year’s welfare reform bill. These did not constitute a second coming of the New Deal, but they were enough for Senator Phil Gramm of Texas, an unrelenting Republican budget hawk, to complain that “the most permanent feature” of the deal was an increase in spending on social programs that “the president has rightly compared to the explosion of social spending that occurred in the 1960s.” The best economic news was yet to come, although, perhaps inevitably, it wouldn’t translate into harmonious relations with Congress.
* * *
Clinton got more good news as his second term began: in mid-February, Ken Starr, by now very clearly Clinton’s nemesis, announced that he would soon resign as special prosecutor and become dean of the law school at Pepperdine University in Malibu, California. Starr had pursued the Clintons aggressively but had been mostly rolling snake eyes on a range of fronts. The previous August, his prosecutors had lost a crucial case against two small-time bankers in Arkansas based on charges that they had concealed certain actions they’d taken on behalf of Bill Clinton’s 1990 gubernatorial campaign. The prosecutors obviously wanted to squeeze the two men, but the acquittals ended any hope of that. Starr had also hoped to get Susan McDougal, the ex-wife of Whitewater investor Jim McDougal, to turn on Clinton, even to say that she’d had an affair with the president. She would not, and as the price of her silence, she spent a total of nearly two years in prison, including eight months in solitary confinement, a portion of which was spent in a Plexiglas-enclosed soundproof cell. The ACLU of Southern Califor
nia called her treatment “barbaric.”
By 1997, some observers were beginning to wonder why Starr was still at it, but neither the setbacks nor the questions quieted the right-wing noise machine. Talk radio and conservative columnists, abetted by a small number of mainstream reporters at the Washington Post, the New York Times, NBC, and ABC who were heavily invested in the Whitewater story (and in the leaks they were almost certainly getting from Starr’s prosecutors), kept banging the drums. They were joined by this time by the Fox News Channel, which had debuted during the 1996 campaign and was owned by Rupert Murdoch and headed by former Republican consultant Roger Ailes.
Murdoch and Ailes would become key figures in the get-Clinton campaign, but in the capital, the unquestioned drum major was William Safire, the former Nixon speechwriter turned New York Times columnist. Safire was respected in Washington high culture, even beloved; he had shown a willingness occasionally to use his perch to attack Republicans, so to establishment Washington the former Nixon spinmeister had a reputation as a straight shooter. But on Whitewater, on which Safire wrote column after column from the time the story broke, he was a propagandist. He produced an endless blizzard of columns alleging that the Clintons were probably guilty of all manner of criminal activity—in one column, for example, he wrote that events would likely soon prove that both Clintons were “accomplices in stealing $50,000 from the poor.” (Events did not so prove.) In January 1996, he set Beltway tongues wagging by calling Hillary Clinton a “congenital liar.” Thirteen months later, he wrote that “stunning indictments” on Whitewater and other matters were imminent.
Starr’s announced departure would seemingly bring the whole scandal industry to an end. Sources close to Starr told journalists that his “major decision” before he left office during the summer would be “when and whether to announce that he will not seek prosecution of the Clintons.” To most observers it seemed unlikely that a prosecutor who’d spent three years looking zealously for signs of wrongdoing would be quitting if he had the goods. It looked as if Starr was running up the white flag; the fact that he was moving three thousand miles to what was arguably America’s most picturesque college campus in one of its most breathtaking locations—to a position funded, as it happened, by Richard Mellon Scaife, who had bankrolled the so-called Arkansas Project—only reinforced the image of a man who saw failure coming and wanted to get as psychically far away from Washington as possible.
The right-wing press flew into a rage at Starr. Safire led the charge, with a column headlined “The Big Flinch” that flayed Starr for his “warped view of duty” and advised that he “get out of town and let someone else finish the job he misled the nation he was prepared to do.” Similar broadsides emanated from the Wall Street Journal editorial page and other venues, and within a few frenzied days Starr reversed field and announced he’d be staying after all.
From that point the Whitewater news turned decidedly more sour for the White House. On April 22, 1997, a federal judge in Arkansas—who happened to have worked on the 1974 congressional campaign of John Paul Hammerschmidt, the Republican who’d defeated Clinton in his run for Congress—extended Starr’s term for another six months after the prosecutor said publicly that he had evidence of “concealment and destruction of evidence and intimidation of witnesses.” Three days later, a federal circuit court ordered the White House to turn over notes Starr had subpoenaed that had been taken by administration lawyers during prosecutors’ examination of Hillary Clinton. In late May, the U.S. Supreme Court ruled that a sexual harassment suit filed by an Arkansas woman named Paula Jones, who alleged that Clinton had sexually assaulted her at a Little Rock hotel in 1991, could proceed. The court held, unanimously, that a sitting president had no right to temporary immunity from civil litigation aimed at him. Writing for the court, Justice John Paul Stevens, a liberal, argued that fighting Jones’s lawsuit “appears to us highly unlikely to occupy any substantial amount of [the president’s] time.”
Stevens was assuming the existence of the postwar political order that he’d known all his adult life—where there was partisanship, certainly, but it just didn’t go beyond a certain agreed-upon point. He probably assumed that the Jones lawsuit was one lonely woman’s quest for justice, and he would surely have been shocked to know the truth of the matter—that by May 1997 there existed a cottage industry of conservative activists who were scheming to use Jones’s allegations to bring Clinton down.
There were figures in Starr’s office, such as Hickman Ewing, Starr’s Little Rock–based prosecutor, and Paul Rosenzweig, who wrote legal briefs for Starr, who had decided that they were turning up nothing on Whitewater and needed to expand their probe into Clinton’s personal life. There were Washington legal power couples Ted and Barbara Olson; federal appeals court judge Laurence Silberman and his wife, Ricky; and husband-and-wife prosecutors Joseph DiGenova and Victoria Toensing, who worked either behind the scenes or in front of the TV cameras to see that both Bill and Hillary Clinton were laid low. There were lawyers in private practice, notably Jerome Marcus and George Conway, who were eager to play a role in discrediting Clinton as well. After 1994, when Jones filed her lawsuit, these lawyers had come to see the suit as the most likely vehicle through which they might get Clinton to commit perjury or otherwise obstruct justice by denying any of the many sexual liaisons of which he’d been accused. And, finally, there was Linda Tripp, a former Bush White House aide whom the Clinton team had disliked but retained, who had recently been transferred to the Pentagon (and given a raise to boot), but who was nursing her grudge.
* * *
When his presidency started, Clinton was hesitant in the realm of foreign affairs. Under the circumstances of 1992–93, this was, in a sense, acceptable to the voters. The Cold War had been won, Russia was no longer a threat, terrorism was not yet a direct menace; Bush had moved heaven and earth to make the 1992 campaign a referendum on foreign policy, and the voters had shrugged.
Clinton and the country quickly learned that the world still required American attention after all, but the new president seemed at times unsure of himself. He was criticized in general terms for “tactical ad-hockery” and lacking a grand strategic vision. On Bosnia, he was rebuked for delay, indecision, and too much deference to European leaders. His efforts stood as an improvement over the detachment of Bush and Baker, but at the same time, this was the greatest slaughter on European soil since World War II, and the American president appeared to be doing nothing. The Black Hawk Down episode in Mogadishu, while not Clinton’s fault per se, didn’t help his standing. His Haitian intervention on behalf of Aristide had not been popular. North Korea had moved toward nuclear weaponization, and the deal that Jimmy Carter had reached with Pyongyang was fragile; given the North’s secrecy, no one could be completely sure whether the deal had taken or not.
As time went on, though, Clinton’s confidence grew. There were some notable successes, by far the most important of which was the Dayton Agreement, reached in December 1995 under the leadership of chief negotiator Richard Holbrooke, which ended the Bosnian wars. The bloodshed stopped, the peace held, and one annex of the agreement still stands as the basic framework of the constitution of Bosnia and Herzegovina. Another courageous move, especially given Clinton’s perceived draft-dodger history, was his normalization of relations with Vietnam, also in 1995. He had made tangible contributions to the British-Irish peace process, and the bond he had developed with Yitzhak Rabin deepened his belief that he could bring peace to the Middle East.
Another personal bond Clinton developed was with Russia’s president, Boris Yeltsin. The first postcommunist, democratically elected president of the Russian Federation, Yeltsin was both brave (standing up to the Communists who had attempted a coup in 1991) and undisciplined (an excessive fondness for the bottle), both visionary and puerile. In part because Yeltsin, too, faced enormous domestic pressures from his right—factions enraged by the diminution of Russian power since 1989—Clinton felt a kinship with th
e Russian leader. In 1994, he’d invited Yeltsin to visit Franklin Roosevelt’s estate, urging him there that the two should “prove the pundits wrong. They want to write about a big blow-up. Let’s disappoint them.”
And there were, to be sure, instances of cooperation. The United States took steps to help Russia make the transition to liberal democracy, such as providing funds to stabilize the economy and offering advice about the regulatory structures that would be needed. In 1994, the administration reached an important and complicated agreement with Russia, Ukraine, Kazakhstan, and Belarus with respect to the proper handling of nuclear material left over from the Soviet era. Yet there remained moments of conflict, and the long-held suspicions of this old enemy were now commingled with a sense of superiority because Russia was so much weaker than the USSR had been.
These two approaches—encouraging Russia to join the West on the one hand, while on the other bearing in mind that Russia still couldn’t be thought of as exactly an ally—were in tension throughout the Clinton years, and both came to a head in the summer of 1997. At the summit of the Group of Seven nations that set the ground rules of the international economy, held in Denver on June 20–22, Russia was admitted as the eighth member, over a dinner of seared Colorado bison in whiskey and tortilla sauce. Yeltsin was delighted to see the G-7 become the G-8. And then, a mere two weeks later, Yeltsin was something other than delighted when NATO extended offers of membership to Poland, the Czech Republic, and Hungary.
The groundwork for this move had been laid in March, when Clinton and Yeltsin met in Helsinki for a summit. Here, Clinton’s intuitive grasp of politics, and the pressures Yeltsin was facing at home, served him well. Yeltsin was deeply resistant to NATO expansion, and he wanted a commitment from Clinton that expansion would stop with the three nations under consideration. Clinton said he couldn’t make such a commitment and that Yeltsin’s best option was to say the move had his blessing. He offered Yeltsin a way to sell it at home:
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