Once in office, George Bush had to deal with problems that he inherited from his predecessor. Reagan’s economic programs and military spending had left the nation with a mounting federal budget deficit, which reached nearly $300 billion in 1992 and slowed economic growth, resulting in another recession in 1990. Unemployment reached 7 percent, and state and local governments had difficulty paying for the educational, health, and social services that the Reagan and Bush administrations had transferred to them. To reverse the downward spiral, Bush abandoned his “no new taxes” pledge. In 1990 he supported a deficit reduction package that included more than $130 billion in new taxes, which failed to solve the economic problems and angered Reagan conservatives who had never fully trusted Bush. He also departed from anti-Washington conservatives when he signed the Americans with Disabilities Act (1990), extending an assortment of protections to some 40 million Americans with physical and mental handicaps.

Bush had a mixed record on the environment. In 1989 he continued supporting oil drilling after the oil tanker Exxon Valdez struck a reef off the coast of Alaska, dumping nearly 11 million gallons of oil into Prince William Sound. By contrast, in 1990 the president signed the Clean Air Act, which reduced emissions from automobiles and power plants. Two years later, however, the president opposed international efforts to limit carbon dioxide emissions, greenhouse gases that contribute to climate change.

Bush also courted conservatives in his nomination of Clarence Thomas to fill the Supreme Court vacancy left by Justice Thurgood Marshall, the first African American justice. Thomas belonged to a rising group of conservative blacks who shared Republican views supporting private enterprise and the free market system and opposing affirmative action. As chief of the Equal Employment Opportunity Commission under Reagan, Thomas had generally weakened the agency’s enforcement of racial and gender equality in the workplace. He also opposed abortion and denounced welfare. Anita Hill’s charges of sexual harassment did not stop his advancement. Following his confirmation battle in 1991, Thomas became one of the most conservative members of the Court.

Despite Bush’s overtures to conservatives, his popularity plummeted to 34 percent in 1992 based largely on his inability to revive the sagging economy. He ran for reelection against Governor William Jefferson (Bill) Clinton of Arkansas, a candidate skilled in the art of political maneuvering. Learning from the mistakes of Michael Dukakis, Clinton ran as a centrist Democrat who promised to reduce the federal deficit by raising taxes on the wealthy and who supported conservative social policies such as the death penalty, tough measures against crime, and welfare reform. Though he did pledge to extend health care and opposed discrimination against homosexuals, Clinton relied on his mainstream southern Democratic credentials to deflect any claims that he was a liberal. Bush also faced a challenge from the independent candidate Ross Perot, a wealthy self-made businessman from Texas, whose campaign against rising government deficits won 19 percent of the popular vote, mostly at Bush’s expense. In turn, Clinton defeated the incumbent by a two-to-one electoral margin.