Chapter 16 Introductory Essay: 1980-Present

Written by: Andrew Busch, Claremont McKenna College

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Introduction

Republican Ronald Reagan was elected president in 1980, decisively defeating incumbent Democrat Jimmy Carter and independent candidate John Anderson and bringing a Republican Senate to Washington on his coattails. Reagan was reelected in a 49-state landslide in 1984, and his vice president, George H. W. Bush, won a solid victory in 1988 by promising to continue Reagan’s policies. The result was the crafting of domestic and foreign policies including smaller government, lower taxes, and a stronger national defense that the conservative movement had sought since the 1960s.

The Conservative Movement and Reaganomics

Reagan’s victory represented a long-term triumph for the conservative movement, which had grown more sophisticated and more powerful since Barry Goldwater’s failed presidential run in 1964. In his campaign, Reagan proposed limiting government, reducing the rate of growth of domestic spending, cutting taxes, and scaling back federal regulation of the economy. He advocated the conservative belief that dependence on welfare was damaging families, discouraging work, and inadvertently trapping people in poverty. He also argued for states’ rights in a federal system and for strict construction of the Constitution. His Cold War foreign policy was predicated on “peace through strength,” promising to rebuild American military power and stop Soviet aggression around the world. (See the Comparing Presidential Campaign Advertising 1964–1980 Lesson.)

Reagan’s electoral coalition included traditional Republican groups such as middle-class suburbanites and small-business owners. He also broke apart the New Deal coalition, winning substantial support among overlapping groups including Catholics, working-class voters, and ethnic groups such as Italian Americans. Reagan added white evangelical Protestants to the Republican coalition, especially as Republicans gained strength in the Sun Belt. Although recession and inflation turned these groups away from the Democratic Party, they also moved toward Reagan on the basis of patriotism, anti-communism, and cultural issues such as opposition to abortion and banning of school prayer.

As president, Reagan won congressional approval of a package of tax and spending cuts that significantly changed the direction of federal policy. Initially, Congress passed a 25 percent across-the-board personal income tax cut over three years, indexed income taxes so inflation would not push taxpayers into higher tax brackets, and cut taxes on business. Later, Congress passed a comprehensive tax reform supported by Reagan that simplified the tax code and reduced tax rates again. From 1980 to 1990, discretionary domestic spending (e.g., grants to state and local governments) fell by one-third. Reagan’s administration also pursued deregulation and free trade. A final pillar of Reagan’s economic policy was support for anti-inflationary monetary policies enacted by the Federal Reserve Board. Reagan underscored his limited-government approach in 1981 by firing members of the Professional Air Traffic Controllers Organization (PATCO) after an illegal strike (federal law prohibits strikes by federal government employees), dealing a major blow to federal public-employee unions.

In July 1981 President Reagan gave a televised speech from the Oval Office to outline his tax plan.

In short, Reagan’s economic policies were held together by a commitment to the view that the economy would perform better if the free market was left to operate with less government intervention. Reagan also believed economic freedom and political freedom went hand in hand. Two schools of economic thought particularly influenced Reagan’s policies. The first was monetarism, which advocated restricting the money supply (and thus the availability of credit) to fight inflation, and the second was supply-side economics, which aimed to promote noninflationary economic growth by reducing taxes and regulations to encourage individuals and businesses to work, invest, and produce. (See the Ronald Reagan and Supply-Side Economics Narrative.)

High interest rates that were part of the Federal Reserve Board’s fight against staggering inflation rates contributed to a deep recession in 1981–1982, the second half of a “double dip” recession that had started under Jimmy Carter in 1979–1980. The chairman of the Federal Reserve, Paul Volcker, and other members decided to attack rising prices by increasing interest rates, making money more difficult to borrow. Although the strategy was successful, American workers and the economy paid a high price. Unemployment reached nearly 11 percent. The Reagan administration also paid a high political price for its unpopular move, in the form of Democratic gains in the House of Representatives and state governorships in the 1982 midterm elections. However, a strong recovery began in early 1983 as the tax cuts took hold, and it continued for the rest of the decade. Nearly 20 million jobs were created, family incomes rose, and inflation and unemployment both fell dramatically.

Access BRI’s Homework Help video: America’s Transition to a Global Economy (1960s-1990s) to learn more about the economic state of the United States during this time.

Reagan’s Cold War Foreign Policy

At the same time, Reagan followed a foreign policy of “peace through strength,” supporting big increases in the defense budget and the deployment of new weapons systems. He presided over the largest peacetime defense budget in history—approximately $220 billion in 1981 and increasing at 7 percent annually—which greatly enhanced American military readiness and modernization but contributed to growing federal deficits. He also embraced a research program called the Strategic Defense Initiative (SDI), intended to develop a defense against nuclear missiles. The Soviets objected strongly to SDI, but Reagan persisted, arguing for the moral superiority of a free society against Soviet totalitarianism. In 1983, he made a speech in which he indicted the Soviet Union as an “evil empire,” and he frequently predicted that communism was doomed to collapse because of its economic inefficiency and denial of basic human freedom. Whereas previous administrations had embraced détente, Reagan rejected that idea and instead pursued policies to facilitate the collapse of communism.

Reagan restored the policy of containment by strengthening traditional alliances with Western Europe and Japan, building a strategic partnership with China, and giving aid to the embattled government of El Salvador in its fight against Cuban-backed communist guerrillas. Going on the Cold War offensive, he announced the Reagan Doctrine, a policy of trying to roll back the Soviet empire by aiding anti-communist guerrillas in Afghanistan (the mujahideen), Nicaragua (the “contras”), Cambodia, and Angola, countries that had fallen into the Soviet orbit in the 1970s. “We must not break faith,” Reagan argued, “with those who are risking their lives—on every continent, from Afghanistan to Nicaragua—to defy Soviet-supported aggression and secure rights which have been ours from birth.” He ordered the invasion of the Caribbean island country of Grenada when hardline communists seized power and killed the prime minister. The administration feared for the lives of American medical students on the island and especially a possible Soviet and Cuban military presence there. Reagan also approved a policy of economic warfare against the Soviet regime, including reducing its access to Western money and technology, with the aim of bringing about its downfall.

In October 1983 U.S. and allied forces from neighboring islands invaded the Caribbean country of Grenada removing a pro-Soviet communist government and securing the safety of American medical students on the island.

After a series of aging leaders died in office in the early 1980s, a new generation took power in the Soviet Union. Mikhail Gorbachev, understanding that the collapsing Soviet economy and stagnating society were in need of reinvigoration, pursued a policy of glasnost (openness) and perestroika (economic restructuring with freer markets). He also proved open to a new relationship with the United States. Reagan and Gorbachev held summit meetings in Geneva in 1985, Reykjavik in 1986, Washington, DC, in 1987, and Moscow and New York in 1988. With Reagan pressuring the Soviet leader and the Russians unable to keep pace with western computer technology, the two agreed to make significant cuts in their nuclear arsenals.

In 1987, Reagan spoke at the Berlin Wall, which divided the city into free and communist sectors, calling on Gorbachev to “tear down this wall.” Meanwhile, in the Soviet Union, Gorbachev attempted to reform and save Soviet Communism through glasnost and perestroika, but when the peoples of the U.S.S.R. and Eastern Europe embraced those principles, they undermined the repressive Communist regime. Two years later, mostly peaceful uprisings against communism swept over the Eastern European countries, and the Berlin Wall came down. Gorbachev decided to withdraw the Soviet army from the city and not intervene to repress the people who were fighting the puppet regimes of Eastern Europe for their liberties. Two years after that, the Soviet Union itself disintegrated. These events spelled the end of the Cold War between the two superpowers that had lasted since 1945. (See the Ronald Reagan, “Tear Down this Wall” Speech, June 12, 1987 Primary Source) (See the “Tear Down This Wall”: Ronald Reagan and the End of the Cold War Decision Point.)

By that time, George H. W. Bush had been elected as Reagan’s successor. Bush focused largely on foreign affairs, especially managing the last stages of the fall of communism and dealing with a crisis in the Middle East. This began when Iraq’s dictator Saddam Hussein invaded and occupied neighboring Kuwait. Bush put together an international coalition that decisively defeated Saddam’s army and drove him from Kuwait in Operation Desert Storm.

Although the Reagan-Bush years produced some significant foreign policy successes, there were failures as well. A peacekeeping mission in Beirut, Lebanon, went awry when terrorists bombed a barracks, killing 241 U.S. Marines. Reagan was also entangled in the Iran-Contra scandal when it became known in late 1986 that National Security Adviser John Poindexter and Col. Oliver North had headed a secret operation that sold weapons to Iran, including 1,000 powerful anti-tank TOW missiles, for the release of hostages. Reagan denied knowledge of the operation in a televised address and news conference, which he recanted after it was discovered that he had approved it.

In October 1983 terrorists drove a truck full of explosives into a barrack of U.S. Marines in Beirut killing 241 of them.

The press soon made public that Poindexter and North had also funneled the proceeds of the arms sales to the Contras in Nicaragua during a period when Congress had legally banned military aid with the Boland Amendment. (The Boland Amendment had subsequently been reversed by congressional approval of military aid to the Contras in 1985.) Poindexter resigned, and Reagan fired North, but not before North shredded documents to obstruct the investigation. Reagan appointed the Tower Commission, which faulted the president for serious lapses in managing his administration. Reagan took responsibility for the scandal, and Congress launched an investigation. A defiant North testified at hearings during the summer of 1987 and won popular support. However, the Iran-Contra Affair contributed to growing distrust of government that originated in Lyndon Johnson’s credibility gap over the Vietnam War and the Watergate scandal and Richard Nixon’s resignation. (See The Iran-Contra Affair Narrative) (See the Herblock, Cartoons of Ronald Reagan, 1984–1987 Primary Source.)

The 1980s Economy and Society

In the 1980s, the economy returned to rates of growth that had been common before the oil shock of 1973. The digital revolution in computers began, and the process of deindustrialization—the transition in employment from industry to the service sector—continued. Partly because many American industrial jobs went overseas to countries with cheaper labor, the proportion of American workers in labor unions declined significantly, changing the dynamics of labor-management relations. Moreover, many industrial towns across the United States were hit hard by widespread unemployment. At the same time, women joined the workforce in rapidly increasing numbers and entered new fields. A new and much-satirized archetype emerged, the “yuppie” (young urban professional), as the symbol of what critics saw as a new era of greed. Others saw the era differently, as a rebirth of freedom and opportunity. (See the Tech Giants: Steve Jobs and Bill Gates Narrative.)

Like the nation’s foreign policy, its growing economy during the decade was tempered by shortcomings. These included rising income inequality (a trend that had begun in the early 1970s), a crisis in the savings and loan industry that required an expensive government bailout, and a steep, though short-lived, stock market decline in late 1987. The federal debt also grew significantly during the decade, with a number of factors contributing. Defense spending increased, as did automatic entitlement spending on social programs. Tax cuts slowed the growth of government tax revenue, and the recession of 1981–1982 reduced revenue as well. The annual deficit then fell with the booming economy and spending restraint, though the federal debt continued to grow. After a new spurt in the early 1990s, the federal deficit shrank throughout the decade after several deficit-reduction packages were adopted during the Bush and Clinton administrations, aided by a stock market and economic boom fueled by growing technology companies and low interest rates.

Demographic trends also changed the United States. In keeping with economic deindustrialization, the nation saw a continued shift of population from the Rust Belt states of the Northeast and Midwest to the Sun Belt states of the South and West as people moved in search of jobs and opportunity. There was also a new burst of immigration, this time from Latin America and Asia. The Immigration Reform and Control Act of 1986 was a compromise reform that gave amnesty to illegal immigrants then in the United States and imposed penalties on businesses for hiring illegal immigrants in the future. A few years later, the Immigration Act of 1990 attempted to connect immigration more closely to job skills by easing the way into the country for more highly educated workers.

The ongoing “culture war” between liberals and conservatives over social values was multifaceted. The debate over abortion continued, with two Supreme Court decisions, Missouri v. Webster (1989) and Planned Parenthood v. Casey (1992), narrowing but not overturning Roe v. Wade (1973), which had legalized abortion. A debate over family structure and single motherhood erupted when Vice President Dan Quayle criticized the television show Murphy Brown for featuring a single mother. The emergence of AIDS in the 1980s brought to the forefront questions about society’s acceptance of homosexuality. College campuses became ground zero in battles over diversity, multiculturalism, the teaching of western civilization courses, and affirmative action, which had been an object of controversy even before the Supreme Court’s Regents of the University of California v. Bakke decision in 1978.

Access BRI’s Homework Help video: Roe v. Wade to learn more about this Supreme Court case.

Access BRI’s Homework Help video: Regents of UC v. Bakke to learn more about affirmative action during this time and the Supreme Court.

Affirmative action and quotas in employment also returned as an issue due to a 1989 Supreme Court decision and subsequent passage of the Civil Rights Act of 1991, which was criticized as promoting quotas. The plight of people with disabilities seeking to use public services was addressed when Congress passed the Americans with Disabilities Act (ADA) in 1990. The act banned discrimination against people with disabilities, required employers to make reasonable accommodations, and mandated accessibility for public accommodations. Religion remained part of the “culture war,” as the “religious right” continued to organize to influence the Republican Party and the Democratic Party became increasingly secularized. (See the Is Affirmative Action Justified? Point-Counterpoint.)

President George H. W. Bush signing the 1990 Americans with Disabilities Act which prevents discrimination on the basis of disability.

The Presidency of Bill Clinton

The string of consecutive Republican presidential victories ended in 1992 when Arkansas Governor Bill Clinton, running on a moderate platform as a “New Democrat,” defeated George H. W. Bush’s bid for reelection. Bush was hurt by a short recession, by a tax increase that broke a 1988 campaign pledge, and, ironically, by the successful end of the Cold War, which reduced the importance of foreign policy, his strong suit. Ready for a change, some voters looked for a populist outsider who seemed to represent the people more closely than either political party. As a result, they gave nearly one in five votes to independent candidate H. Ross Perot, a billionaire Texan who was a populist outsider. Whether Perot drew more votes from Bush or Clinton remains a matter for debate, but Clinton, who projected empathy and optimism, won the election with 43 percent of the popular vote. (See The 1992 Presidential Election and the Rise of Democratic Populism Narrative.)

In his first two years in the White House, Clinton gained enactment of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, which created a free-trade zone on January 1, 1994, by immediately eliminating tariffs between the nations or gradually phasing them out. Otherwise, he governed from the left, working with the Democratic Congress to pass another large tax increase. Clinton also issued an order allowing gay people to serve openly in the military, but he soon backtracked due to congressional opposition and settled for a “don’t ask, don’t tell” policy. He put First Lady Hillary Clinton in charge of a task force that proposed a major overhaul of the health care system. Opponents labeled it “Clintoncare” and argued it was too expensive, too bureaucratic, and too likely to disrupt the health care system. It was never brought up for a vote and died in committee.

In the 1994 midterm elections, Republicans won a majority in both the House and the Senate for the first time since 1952. The Republican victory was framed by the “Contract with America,” a promise by House Republican candidates, engineered by House Minority Whip and soon-to-be Speaker Newt Gingrich, that they would bring to a vote a number of conservative reforms and policy departures, including a new push for a balanced budget.

President Bill Clinton (bottom front) and House Speaker Newt Gingrich (upper right) fought over policies but eventually reached agreements to balance the federal budget and reform welfare. Vice President Al Gore is at the left.

There were major struggles between Congress and the Clinton administration, but two important policy changes emerged. First, a welfare reform bill was enacted that gave states broad authority to design their own programs and impose work requirements and time limits on recipients of cash welfare. Second, after the 1996 elections, Clinton and Republicans reached an agreement leading to a balanced federal budget in 1998 for the first time since 1969. However, scandals starting with the Whitewater land deal and continuing with allegations of sexual misconduct that led to Clinton’s impeachment by the House on the grounds that he committed perjury and obstruction of justice. In December 1998, Clinton joined Andrew Johnson to become only the second sitting president to be impeached. However, like Andrew Johnson and Donald J. Trump, who would be impeached more than 20 years later, he was not removed from office by the Senate.

The economy picked up speed as the 1990s wore on, and the nation enjoyed another long expansion, driven largely by technology. This growth was further accelerated by decreased federal spending during the Clinton administration, especially after the 1994 elections, as well as lower interest rates set by the Federal Reserve, which contributed to the tech boom and a rapidly growing stock market. Moreover, NAFTA encouraged trade with Canada and Mexico, though some industrial jobs and factories may have moved to Mexico as a result.

At the end of the decade, the “dot-com bubble” in the stock market burst as overpriced technology company shares collapsed in value, but the influence of technology on the economy did not abate. The internet and cell phones, nearly invisible in 1990, were ubiquitous in 2000 and remained so. Consumers rapidly purchased goods and services online over the next few decades as e-commerce dramatically increased, having a significant impact on brick-and-mortar stores and shopping malls.

After Operation Desert Storm, U.S. foreign policy in the 1990s entered a period of relative calm for America. Some analysts argued that that Americans were witnessing the “end of history,” the final victory of liberal democracy, and had largely lost interest in foreign affairs. Nevertheless, the United States was still engaged in world affairs and wars around the world. The Clinton administration intervened abroad to support democracy and to solve humanitarian crises in Haiti, Somalia, and the Balkans. Clinton withdrew U.S. forces from Somalia after they were attacked in Mogadishu and suffered approximately 100 casualties in urban fighting, but he backed NATO bombing campaigns to stop ethnic cleansing (i.e., genocide) in Bosnia and Kosovo. (See the Has Francis Fukuyama’s “End of History” Thesis Been Proven Correct? Point-Counterpoint.) (See the Francis Fukuyama, “The End of History?”, 1989 Primary Source.) (See the U.S. Foreign Policy in Somalia and Rwanda Decision Point.) (See the George H. W. Bush, Address to the United Nations General Assembly, September 23, 1991 Primary Source.)

Saddam Hussein remained an adversary in the Middle East; Clinton ordered an extensive bombing campaign against Iraq in 1998 when Saddam expelled U.N. weapons inspectors. Meanwhile, Islamic terrorism gained new strength, most visibly in the rise of the al-Qaeda network headed by Osama bin Laden. In February 1993, Islamic fundamentalist terrorists bombed New York’s World Trade Center, and al-Qaeda attacked U.S. embassies in Kenya and Tanzania in 1998. Two years later, al-Qaeda attacked the U.S.S. Cole, a navy vessel at port in Yemen, killing 17 American sailors and wounding more than 30 others. Clinton responded with law enforcement efforts and cruise missile strikes against al-Qaeda camps.

The U.S.S. Cole was attacked by suicide bombers in October 2000 and 17 U.S. sailors were killed. Here the Cole is being tugged after the bombing. Note the large gash in the side of the ship.

George W. Bush and a Changing World

George W. Bush, governor of Texas and son of George H. W. Bush, ran for president in a hotly contested 2000 race against Vice President Al Gore. After two recounts and intervention by the U.S. Supreme Court in Bush v. Gore (2000), Bush was declared the winner in the decisive state of Florida, giving him the required majority in the Electoral College. Bush had run on a theme of “compassionate conservatism.” As president, he combined traditionally liberal and conservative domestic policies, including a large tax cut, a major expansion of federal involvement in elementary and secondary education through the No Child Left Behind Act, and an expansion of Medicare to include prescription drug coverage. He also defended traditional marriage and made an unsuccessful proposal to privatize Social Security by establishing personal accounts for workers.

However, most of Bush’s presidency was consumed by the War on Terror, the United States’ response to al-Qaeda’s attack on the World Trade Center and the Pentagon on September 11, 2001. Bush’s external response initially focused on attacking al-Qaeda and its Taliban allies in Afghanistan, which the terrorist group had used as safe haven. The Taliban regime was toppled in short order and al-Qaeda was driven into hiding, but fighting continued. In 2003, fearing that Saddam Hussein retained a large stockpile of weapons of mass destruction (WMDs) and was friendly with terrorists, Bush received authorization from Congress to invade Iraq. Saddam’s dictatorship there was quickly toppled, but U.S. forces did not find the WMDs they expected. The Bush administration then shifted the primary rationale for the invasion to spreading democracy and peace in the Middle East. After the successful overthrow of the regime, U.S. forces encountered an insurgency from supporters of Saddam as well as al-Qaeda in Iraq. Facing a deteriorating situation with heavy U.S. casualties from improvised explosive devices (IEDs), Bush ordered a surge of additional troops that turned the tide of battle in 2007. (See the U.S. Military Intervention in Afghanistan Decision Point.) (See the Was the Invasion of Iraq Justified? Point-Counterpoint.)

On September 11 2001 terrorists hijacked commercial airplanes and flew them into the World Trade Center and the Pentagon killing nearly 3 000 people and igniting the War on Terror. This photograph shows the damage done to the Trade Center’s Twin Towers which collapsed shortly after the planes’ impact.

After the initial success, the Iraq War became increasingly controversial among Americans, as did the Bush Administration’s policies for dealing with detained terrorists or “enemy combatants.” One controversy was over the indefinite holding of detainees at a U.S. prison at Guantanamo Bay, Cuba. Moreover, the administration used “enhanced interrogation” techniques that many Americans saw as torture. In several Supreme Court cases, including Hamdi v. Rumsfeld, Rasul v. Bush, Hamdan v. Rumsfeld, and Boumediene v. Bush, the Supreme Court placed limits on the president’s executive discretion and insisted that enemy combatants had certain habeas corpus rights.

At home, the War on Terror led to increased efforts to investigate and stop terrorism through new government agencies such as the Transportation Safety Administration and the Department of Homeland Security. The National Security Administration (NSA) conducted a controversial telephone surveillance program of American citizens that some thought was a violation of individual civil liberties. In 2001, Congress passed the USA PATRIOT Act, which gave law enforcement stronger tools to fight terrorism through “roving wiretaps” on multiple devices in a single authorization and “sneak and peak” warrants that allowed searches and seizures in homes and businesses without the authorization or consent of the owner. These provisions led to concerns that civil liberties related to privacy and the Fourth Amendment were being compromised. Congress renewed the act several times during the Bush and Obama administrations. (See The USA PATRIOT Act Narrative.) (See the Does the Threat of Terrorism Justify Increased Surveillance? Point-Counterpoint.)

A severe financial crisis erupted in fall 2008, connected to the bursting of a “bubble” in the housing market. The Bush administration met the crisis in several ways. The federal government lent money to struggling investment bank Bear Stearns and insurance company AIG and took over the mortgage companies Fannie Mae and Freddie Mac. Congress then passed the Troubled Asset Relief Program (TARP), which authorized $700 billion and ultimately provided $431 billion to struggling financial institutions to keep them open (this money was later repaid to the government). TARP helped stabilize the financial system, but these efforts could not avert what came to be called the Great Recession, a steep economic decline that was followed by a long period of sluggish growth.

The Great Recession and the Presidency of Barack Obama

Democrats regained control of Congress in the 2006 midterm elections, and in 2008, U.S. Senator Barack Obama of Illinois was elected the first African American president. Obama won the election because of the growing unpopularity of the war in Iraq and the early suffering caused by the recession. Although he withdrew U.S. forces from Iraq as promised during the campaign, Obama returned U.S. military forces there when a new terrorist threat, the Islamic State in Iraq and Syria (ISIS), swept toward Baghdad in 2014.

In Afghanistan, Obama sought to prevent the return of the Taliban to power and end the haven it provided for al-Qaeda, authorizing a surge of 33,000 troops to that country. Starting in 2011, he gradually began to draw down forces in Afghanistan. During the election, he had also promised to close the prison at Guantanamo Bay. However, Congress kept Guantanamo Bay open. Obama’s greatest success in the ongoing War on Terror came when he authorized a U.S. special forces raid that killed Osama bin Laden in 2011 in Pakistan.

The situation in the Middle East continued to evolve rapidly. In early 2011, protesters seeking greater liberties and an end to corruption and brutality forced the resignation of Egyptian president Hosni Mubarak. The movement, called the Arab Spring, quickly spread to Libya, where the United States launched air strikes to support the popular uprisings that led to the overthrow of dictator, Muammar el-Qaddafi. However, a large mob attacked the U.S. diplomatic compound in Benghazi, and four Americans were slain. Although initially unsure about supporting groups rebelling against Syrian dictator, Bashar al-Assad, who used chemical weapons against the rebels, Obama later ordered air strikes (on the basis of the congressional authorization from the War on Terror in 2001) when ISIS established a greater presence in Syria.

Obama hoped to transform American politics and end the era begun by the “Reagan Revolution” in 1980. To that end, he won approval of the American Recovery and Reinvestment Act (ARRA), a New Deal–style stimulus spending program to fight the recession that was initially authorized at $787 billion and eventually spent a total of $840 billion. Components of the ARRA included tax cuts, infrastructure spending, aid to state and local governments, and subsidies to green energy companies. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress passed several regulations on the financial sector, including Wall Street, banks, and insurance companies, to decrease the likelihood of a similar financial meltdown.

In 2010, Congress passed the Patient Protection and Affordable Care Act (ACA), a government program that expanded health care coverage to millions of uninsured Americans, creating health care exchanges, providing the uninsured with subsidies to purchase insurance, expanding Medicaid, and requiring that insurance companies cover individuals’ preexisting conditions. The program sought to lower costs by mandating that all individuals carry health insurance and thereby ensure that a sufficient number of healthy people were part of the system. This individual mandate imposed a penalty in the form of a fine or a tax to those who did not have coverage. Critics nicknamed the program “Obamacare” and feared expanded government regulation in health care and escalated federal spending. Those concerns, and voters’ reaction against weak economic growth, led to major Democratic losses in Congress in the midterms. Energized by the right-leaning Tea Party movement, which called for reduced spending, taxes, and debt and a return to constitutionalism, Republicans won a House majority in 2010 and a Senate majority in 2014.

Barack Obama hoped to lead a resurgence of liberalism in the United States but the Tea Party movement opposed his policies and helped Republicans gain control of the House in 2010. Here Tea Party members march in Washington DC to oppose increased taxation.

The Republican House stalled Obama’s legislative program and forced him to accept significant spending cuts in 2011, but his reelection in 2012 guaranteed survival of the ACA through at least 2016. Faced with an impasse in Congress, Obama turned increasingly to executive orders and regulatory actions on issues such as immigration and climate change to institute his policies. He also advanced his agenda through the courts, which upheld ACA (though with limits) and ruled in Obergefell v. Hodges (2015) that same-sex marriage was a constitutional right. (See the Fossil Fuels, Foreign Policy, and Climate Change Narrative.)

Social tensions and polarization increased as the Occupy Wall Street movement called for action against the wealthiest “1 percent” and the Black Lives Matter movement protested incidents of police racism and excessive force against African Americans. In the August 2014 incident that launched the Black Lives Matter movement, an unarmed black teenager named Michael Brown was shot and killed by a police officer in Ferguson, Missouri. Riots ensued, and Missouri governor Jay Nixon called in the National Guard. In November, a grand jury decided not to indict the police officer, and a subsequent March 2015 report by the Obama Justice Department concluded that Brown had assaulted the officer before the shooting and that the officer did not use unreasonable force while shooting and killing Brown. However, the Justice Department severely criticized racial bias in the department’s policing methods. By the end of Obama’s presidency, most Americans said race relations had continued to deteriorate.

Abroad, Obama opened diplomatic ties with Cuba for the first time since 1961. He also supported some opposition forces in the Syrian civil war and proclaimed a “red line” against chemical weapon use by the Syrian regime; but Syrian dictator Bashir Assad used such weapons on his own people anyway. Obama signed a deal with Iran that relieved economic sanctions in exchange for an Iranian promise to suspend its nuclear weapons program. Obama also announced a reset of relations with Russia soon after taking office, but he found himself at odds with Russian President Vladimir Putin over Russia’s annexation of Crimea, proxy war in eastern Ukraine, and support of Syria’s Assad. Overall, Obama sought to pursue a foreign policy that de-emphasized unilateral use of American power and that sought reconciliation with many traditional adversaries of the United States, a challenging task for any president.

President Obama (second from left) and Russian President Vladimir Putin (third from left) clashed on foreign policy issues numerous times during Obama’s presidency.

The 2016 election saw Donald Trump win the presidency on the basis of a wave of populism in the United States and abroad embraced by millions who felt left behind by globalism and the information economy and betrayed by successful elites. The long-term impact on politics, economics, and culture remains to be seen.

From 1980 to the present, American society experienced a burst of technological change, hurtling into the digital age. Women became more fully integrated into the nation’s workforce, many industrial jobs moved overseas, and mass immigration changed the nation’s demography, increasing the proportion of racial and ethnic minorities in the population. A series of ongoing debates dominated American politics. Was the federal government too powerful, or should it do more at home? Was America better served by moral traditionalism or by the ethos of the 1960s counterculture? Should America act forcefully abroad in defense of freedom, democracy, and its national interests, or should it be more cautious? These questions touched upon the perennial questions that Americans faced since the founding of the country. They would continue to face difficult questions and debate solutions to them. (See the Is It in the Interest of the United States to Maintain Its International Obligations? Point-Counterpoint.)

The twenty-first century began like any other in U.S. history with challenges and opportunities both at home and abroad. (credit “2004”: modification of “Mark Zuckerberg” by Elaine and Priscilla Chan CC BY 2.5; credit “2013”: modification of “2013 Boston Marathon aftermath people” by Aaron Tang CC BY 2.0; credit “2001”: modification of “Marines Afghan Soldiers Battle Taliban in Marjah” by “DVIDSHUB”/Flickr CC BY 2.0)

Additional Chapter Resources

• The Space Shuttle Program and the Challenger Disaster Narrative
• Rodney King and the Los Angeles Race Riots Narrative
• The 1992 Presidential Election and the Rise of Democratic Populism Narrative
• Timothy McVeigh and the Oklahoma City Bombing Narrative
• Ronald Reagan Address to the Nation on the Challenger Disaster January 28 1986 Primary Source
• AIDS Memorial Quilt 1987 Primary Source
• Maya Angelou “On the Pulse of the Morning” January 20 1993 Primary Source
• Republican House Representatives “Republican Contract with America” 1994 Primary Source
• Barack Obama Keynote Address at the Democratic National Convention July 27 2004 Primary Source
• New Yorker Covers 2001-2011 (Reflections on 9/11) Primary Source
• Continuity and Change: Immigration in the United States Lesson
• Security Liberty and the USA PATRIOT Act Lesson
• George Washington’s Foreign Policy: Comparisons across U.S. History Lesson
• Executive Powers in Times of Crisis Lesson
• Cold War DBQ (1947-1989) Lesson
• Unit 8 Civic Connection Lesson

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Review Questions

1. Which of the following was not a part of President Ronald Reagan’s economic program?

1. Reducing the rate of growth of federal spending
2. Increasing federal regulation
3. Cutting income taxes
4. Reducing the federal bureaucracy

2. Which of the following did not occur during the Clinton presidency?

1. A balanced federal budget
2. Welfare reform
3. Intervention in Bosnia and Kosovo
4. Passage of the Americans with Disabilities Act

3. Which action was adopted as part of the “War on Terror”?

1. The USA PATRIOT Act
2. The invasion of Grenada
3. Detention of enemy combatants in offshore prisons
4. The war against drugs

4. Which key economic and social development did not occur during the 1980s and 1990s?

1. Deindustrialization
2. Decline in number of women in the workforce
3. New wave of immigration from Latin America and Asia
4. Advances in computer technology

5. The politics of the 1980s were dominated by

1. Republican control of the presidency and the U.S. Senate
2. economic malaise
3. the War on Terror
4. growing power of the Democratic Party

6. Ronald Reagan’s core political beliefs can best be described as

1. liberal
2. Democratic
3. libertarian
4. conservative

7. The Reagan-era Democratic coalition included all the following except

1. Catholics
2. the working class
3. middle-class suburbanites
4. black evangelicals

8. Regarding taxes the Reagan administration succeeded in

1. eliminating federal income taxes for the lowest 10 percent of wage earners
2. passing an across-the-board tax cut
3. raising corporate tax rates
4. expanding regulations on tax policy

9. President Reagan’s views on public-employee unions were most clearly seen when he

1. simplified the tax code
2. fired striking members of the Professional Air Traffic Controllers
3. decreased discretionary federal spending
4. proposed a “peace through strength” policy

10. The Reagan Doctrine can best be described as

1. rejection of the post World War II European boundaries
2. active effort to end the Cold War through international peacekeeping organizations
3. active support of anti-communist guerilla forces in multiple countries
4. pursuit of a foreign policy of peaceful coexistence with the Soviet Union and China

11. The Reagan Doctrine is illustrated in all the following actions except

1. the United States’ invasion of Grenada
2. U.S. support of Afghanistan’s mujahideen
3. use of U.S. resources to aid Nicaraguan Contra rebels
4. the toppling of Saddam Hussein’s regime in Iraq

12. An immediate outcome of the summit meeting of Ronald Reagan and Mikhail Gorbachev in Reykjavik was

1. increased tensions and a lack of an agreement between the two leaders
2. the unification of Germany
3. the end of the Cold War
4. a nuclear de-escalation treaty

13. The U.S. economy of the 1980s featured all the following except

1. widening income inequality
2. government bailout to deal with the savings and loan crisis
3. increase in the rate of labor union membership
4. increase in the federal deficit

14. Major demographic changes in the United States in the 1980s included

1. widespread return to Rust Belt states because of dissatisfaction with the quality of life in Sun Belt states
2. more immigration from Latin America and Asia
3. a baby boom in the industrial heartland rivaling that of the post World War II years
4. lower life expectancy due to the AIDS epidemic

15. The “culture wars” of the 1980s and 1990s most clearly related to

1. the battle over immigration policy
2. a focus on assimilation as a prerequisite for naturalization
3. clashes between liberals and conservatives over social issues
4. conflict between northern and western members of Congress over control of economic policy

16. Democratic President Bill Clinton’s embrace of conservative policies can best be seen in

1. the “don’t ask don’t tell” policy in the military
2. passage of a large tax increase
3. his abandonment of the North American Free Trade Agreement
4. passage of a welfare reform bill that gave states increased power over recipients’ qualifications

17. During the 1990s U.S. foreign policy was dominated by

1. the end of the Cold War
2. humanitarian crises in several countries
3. growing Soviet presence in Latin America
4. the invasion of Afghanistan

18. President George W. Bush’s presidency was dominated by

1. the United States’ response to the attacks on 9/11
2. efforts to diminish income inequality
3. the securing of electoral reform
4. expansion of Social Security and other entitlement programs

19. The 2008 election of Barack Obama occurred in the midst of

1. the removal of al-Qaeda as a global threat
2. an increase in the United States’ manufacturing strength
3. a widespread economic recession
4. broad support for traditional conservative economic policies

20. The ascendency of Mikhail Gorbachev in the Soviet Union during the 1980s led to

1. an increase in Cold War tensions
2. an opportunity for greater dialogue between the United States and the U.S.S.R.
3. escalation of the arms race
4. an increase in the power of the United Nations

21. President Reagan’s Strategic Defense Initiative (SDI) was primarily intended too

1. end the global war on terror
2. cause the collapse of the Soviet Union
3. develop a defense against nuclear missiles
4. accelerate the arms race

Free Response Questions

1. Explain the factors that led Ronald Reagan a Washington outsider to win the presidency in 1980.
2. Evaluate the role of Ronald Reagan and U.S. foreign policy in the collapse of the Soviet Union.
3. Explain how the U.S. workforce changed in the 1980s.
4. Explain how the 1980s “culture wars” between conservatives and liberals reflected changing social values.
5. Explain why the end of the Cold War did not bring a long-term peace dividend to the United States.
6. Explain the impact of the War on Terror on civil liberties within the United States.

AP Practice Questions

This chart shows the U.S. population and the labor force in 1950 and 2000 by age and gender. (credit: “U.S. Population and Labor Force 1950 and 2000” by Bill of Rights Institute/Flickr CC BY 4.0)

Refer to the charts provided.

1. What historical phenomenon most directly caused the trends seen in the charts?

1. Changing gender roles
2. Expanding number of jobs in defense-related industries
3. Increased immigration from Latin America and Asia
4. Technological innovation

2. Which was a direct result of the trends demonstrated in the charts?

1. Energy independence fueled job growth in the second half of the twentieth century.
2. Affordable childcare ceased to be a political issue.
3. Pay equality was achieved by 2000.
4. Challenges arose to the continued funding of the welfare programs.

3. The trends illustrated in the charts most directly reflect the growing belief that

1. automation would replace most menial labor
2. women would become the primary earners within family units
3. for many workers the age of retirement would increase
4. rising unemployment rates would hurt economic growth

“It’s morning again in America. Today more men and women will go to work than ever before in our country’s history. With interest rates at about half the record highs of 1980 nearly two thousand families today will buy new homes more than at any time in the past four years. This afternoon 6 500 young men and women will be married and with inflation at less than half of what it was just four years ago they can look forward with confidence to the future. It’s morning again in America and under the leadership of President Reagan our country is prouder and stronger and better. Why would we ever want to return to where we were less than four short years ago?”

“Prouder Strong Better” or “Morning in America – A Political Advertisement Broadcast” during the 1984 Presidential Campaign in Support of Ronald Reagan

Refer to the excerpt provided.

4. What group would support the point of view expressed in the excerpt?

1. Supporters of government deregulation
2. Proponents of welfare programs
3. Critics of the Cold War
4. Democrats from industrial states

5. This excerpt most directly resulted from what earlier movement?

1. The civil rights movement
2. Feminism
3. The counterculture
4. Resurgent conservatism

6. The sentiments expressed in this excerpt contributed most directly to which of the following?

1. An increase in immigration from Latin America and Asia
2. A decline in service-sector employment
3. Increased confidence in political institutions
4. An increase in fossil-fuel dependence

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Primary Sources

“Approved Articles of Impeachment.” The Washington Post. December 20, 1998. https://www.washingtonpost.com/wp-srv/politics/special/clinton/stories/articles122098.htm

Bush George H. W. “Inaugural Address.” January 20, 1989. http://www.presidency.ucsb.edu/ws/index.php?pid=16610

Bush George H. W. “Address on Suspension of Hostilities with Iraq.” https://www.presidency.ucsb.edu/documents/address-the-nation-the-suspension-allied-offensive-combat-operations-the-persian-gulf

Bush George W. “Address on the September 11, 2001, Attacks.” https://www.presidency.ucsb.edu/documents/address-the-nation-the-terrorist-attacks

Bush George W. “Inaugural Address.” January 20, 2001. http://www.presidency.ucsb.edu/ws/index.php?pid=25853

Bush George W. “Inaugural Address.” January 20, 2005. http://www.presidency.ucsb.edu/ws/index.php?pid=58745

Clinton William J. “Address before a Joint Session of Congress on Administration Goals.” http://www.presidency.ucsb.edu/ws/index.php?pid=47232

Clinton William J. “Inaugural Address.” January 20, 1993. http://www.presidency.ucsb.edu/ws/index.php?pid=46366

Clinton William J. “Inaugural Address.” January 20, 1997. http://www.presidency.ucsb.edu/ws/index.php?pid=54183

“Department of Justice Report Regarding the Criminal Investigation Into the Shooting Death of Michael Brown by Ferguson Missouri Police Officer Darren Wilson.” https://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/04/doj_report_on_shooting_of_michael_brown_1.pdf

Obama Barack. “Address in Cairo Egypt.” https://www.presidency.ucsb.edu/documents/remarks-cairo

Obama Barack. “Address on Proposed Health Care Reform.” https://www.presidency.ucsb.edu/documents/address-before-joint-session-the-congress-health-care-reform

Obama Barack. “Inaugural Address.” January 20, 2009. http://www.presidency.ucsb.edu/ws/index.php?pid=44

Obama Barack. “Inaugural Address.” January 21, 2013. http://www.presidency.ucsb.edu/ws/index.php?pid=102827

Reagan Ronald. “Address Before a Joint Session of the Congress on the Program for Economic Recovery.” http://www.presidency.ucsb.edu/ws/index.php?pid=43425

Reagan Ronald. “Address on Events in Lebanon and Grenada.” https://www.presidency.ucsb.edu/documents/address-the-nation-events-lebanon-and-grenada

Reagan Ronald. “Address on National Security and the Strategic Defense Initiative.” https://www.presidency.ucsb.edu/documents/address-the-nation-defense-and-national-security

Reagan Ronald. “Inaugural Address.” January 20, 1981. http://www.presidency.ucsb.edu/ws/index.php?pid=43130

Reagan Ronald. “Inaugural Address.” January 21, 1985. http://www.presidency.ucsb.edu/ws/index.php?pid=38688

“The Republican Contract with America.” https://global.oup.com/us/companion.websites/9780195385168/resources/chapter6/contract/america.pdf

Suggested Resources

Busch Andrew E. Reagan’s Victory: The 1980 Election and the Rise of the Right. Lawrence KS: University Press of Kansas 2005.

Bush George H. W. and Brent Scowcroft. A World Transformed. New York: Vintage 2011.

Bush George W. Decision Points. New York: Crown: 2010.

Campbell Colin and Rockman Bert A. The Clinton Legacy. Chatham NJ: Chatham House 1999.

Cannon Lou. President Reagan: The Role of a Lifetime. New York: Public Affairs 2000.

Clinton Bill. My Life. New York: Random House 2004.

Hayward Steven F. The Age of Reagan: The Conservative Counterrevolution 1980-89. New York: Crown Forum 2009.

Mann James. George W. Bush. New York: Macmillan 2015.

Morris Edmund. Dutch: A Memoir of Ronald Reagan. New York: Random House 2011.

Parmet Herbert S. George Bush: The Life of a Lone Star Yankee. New Brunswick NJ: Transaction Publishers 1997.

Pemberton William E. Exit with Honor: The Life and Presidency of Ronald Reagan. New York: M.E. Sharpe 1997.

Reagan Ronald. An American Life. New York: Simon & Schuster 1991.

Renshon Stanley A. Barack Obama and the Politics of Redemption. New York: Routledge 2012.

Schier Steven ed. Debating the Obama Presidency. Lanham MD: Rowman & Littlefield 2016.

Schier Steven ed. The Postmodern Presidency: Bill Clinton’s Legacy in U.S. Politics. Pittsburgh PA: University of Pittsburgh Press 2000.

Starr Ken. Contempt: A Memoir of the Clinton Investigation. New York: Sentinel 2018.