George H. W. Bush

==== Economy and fiscal issues ====
The U.S. economy had generally performed well since emerging from [[Early 1980s recession in the United States|recession in late 1982]], but it slipped into a mild [[Early 1990s recession in the United States|recession in 1990]]. The unemployment rate rose from 5.9 percent in 1989 to a high of 7.8 percent in mid-1991.<ref name="Accepting the Harsh Truth Of a Blue-Collar Recession, New York Times, Dec. 25, 1991">{{Cite news|last=Lohr|first=Steve|date=December 25, 1991|title=Accepting the Harsh Truth Of a Blue-Collar Recession|newspaper=The New York Times|url=https://www.nytimes.com/1991/12/25/business/accepting-the-harsh-truth-of-a-blue-collar-recession.html|access-date=January 5, 2022|issn=0362-4331}}</ref><ref name="Blue-collar Towns Have Highest Jobless Numbers, Hartford Courant, Sept. 1, 1991">[http://articles.courant.com/1991-09-01/business/0000212544_1_white-collar-unemployment-aetna-life Blue-collar Towns Have Highest Jobless Numbers] {{Webarchive|url=https://web.archive.org/web/20180717215054/http://articles.courant.com/1991-09-01/business/0000212544_1_white-collar-unemployment-aetna-life |date=July 17, 2018 }}, ''Hartford Courant'' [Connecticut], W. Joseph Campbell, September 1, 1991.</ref> Large [[United States public debt|federal deficits]], spawned during the Reagan years, rose from $152.1&nbsp;billion in 1989<ref>{{cite news| last=Redburn| first=Tom| title=Budget Deficit for 1989 Is Put at $152.1 Billion : Spending: Congress and the White House remain locked in a stalemate over a capital gains tax cut| date=October 28, 1989| url=https://articles.latimes.com/1989-10-28/news/mn-697_1_capital-gains-tax-cut| work=[[Los Angeles Times]]| access-date=June 7, 2018}}</ref> to $220&nbsp;billion for 1990;<ref name=NYT10-27-90>{{cite news| last=Uchitelle| first=Louis| title=The Struggle in Congress; U.S. Deficit for 1990 Surged to Near-Record $220.4 Billion, but How Bad Is That?| date=October 27, 1990| url=https://www.nytimes.com/1990/10/27/us/struggle-congress-us-deficit-for-1990-surged-near-record-220.4-billion-but-bad.html| work=[[The New York Times]]| access-date=June 7, 2018}}</ref> the $220&nbsp;billion deficit represented a threefold increase since 1980.{{sfn|Greene|2015|pp=72–73}} As the public became increasingly concerned about the economy and other domestic affairs, Bush's well-received handling of foreign affairs became less of an issue for most voters.{{sfn|Waterman|1996|pp=340–341}} Bush's top domestic priority was to end federal budget deficits, which he saw as a liability for the country's long-term economic health and standing in the world.{{sfn|Meacham|2015|pp=360–361}} As he was opposed to major defense spending cuts{{sfn|Patterson|2005|pp=228–229}} and had pledged not to raise taxes, the president had major difficulties in balancing the budget.<ref name="millercenterdomesticaffairs">{{cite web|url=http://millercenter.org/president/biography/bush-domestic-affairs|title=George H. W. Bush: Domestic Affairs|publisher=Miller Center of Public Affairs, University of Virginia|access-date=January 18, 2017|date=October 4, 2016}}</ref>

Bush and congressional leaders agreed to avoid major changes to the budget for [[fiscal year#United States|fiscal year]] 1990, which began in October 1989. However, both sides knew spending cuts or new taxes would be necessary for the following year's budget to avoid the draconian automatic domestic spending cuts required by the [[Gramm–Rudman–Hollings Balanced Budget Act]] of 1987.{{sfn|Greene|2015|pp=95–97}} Bush and other leaders also wanted to cut deficits because Federal Reserve Chair [[Alan Greenspan]] refused to lower interest rates and thus stimulate economic growth unless the federal budget deficit was reduced.{{sfn|Meacham|2015|pp=409–410}} In a statement released in late June 1990, Bush said that he would be open to a deficit reduction program which included spending cuts, incentives for economic growth, budget process reform, as well as tax increases.<ref>{{cite news| last1=Balz| first1=Dan| last2=Yang| first2=John E.| title=Bush Abandons Campaign Pledge, Calls for New Taxes| date=June 27, 1990| newspaper=The Washington Post| url=https://www.washingtonpost.com/archive/politics/1990/06/27/bush-abandons-campaign-pledge-calls-for-new-taxes/a7ea302f-cecb-43b0-8d8e-5009bc294ee3/?noredirect=on| access-date=June 7, 2018}}</ref> To [[Fiscal conservatism|fiscal conservatives]] in the Republican Party, Bush's statement represented a betrayal, and they heavily criticized him for compromising so early in the negotiations.<ref>{{cite book |last=Heclo |first=Hugh |editor1-last=Nelson |editor1-first=Michael |editor2-last=Perry |editor2-first=Barbara A. |title=41: Inside the Presidency of George H. W. Bush |publisher=Cornell University Press |date=2014 |pages=[https://archive.org/details/41insidepresiden00unse/page/68 68–69] |chapter=Chapter 2: George Bush and American Conservatism |isbn=978-0-8014-7927-4 |chapter-url=https://books.google.com/books?id=eR35AgAAQBAJ&q=%22Conservatives+began+to+smell+betrayal+in+the+Washington+air%22&pg=PA68 |url=https://archive.org/details/41insidepresiden00unse/page/68 }}</ref>

In September 1990, Bush and congressional Democrats announced a compromise to cut mandatory and discretionary programs funding while raising revenue, partly through a higher gas tax. The compromise additionally included a [[PAYGO|"pay as you go"]] provision that required that new programs be paid for at the time of implementation.{{sfn|Greene|2015|pp=100–104}} House Minority Whip [[Newt Gingrich]] led the conservative opposition to the bill, strongly opposing any form of tax increase.{{sfn|Meacham|2015|pp=446–447}} Some liberals also criticized the budget cuts in the compromise, and in October, the House rejected the deal, resulting in a brief government shutdown. Without the strong backing of the Republican Party, Bush agreed to another compromise bill, this one more favorable to Democrats. The [[Omnibus Budget Reconciliation Act of 1990]] (OBRA-90), enacted on October 27, 1990, dropped much of the gasoline tax increase in favor of higher income taxes on top earners. It included cuts to domestic spending, but the cuts were not as deep as those proposed in the original compromise. Bush's decision to sign the bill damaged his standing with conservatives and the general public, but it also laid the groundwork for the budget surpluses of the late 1990s.{{sfn|Greene|2015|pp=104–106}}