Inaugurated as president on Jan. 20, 1989, Bush brought an informal atmosphere to the White House. The Bushes greeted tourists on his first full day as president.
In June 1990 Bush abandoned his “Read my lips. No new taxes” campaign pledge and acknowledged that new or increased taxes were necessary. Many Republican conservatives were critical of this shift, and his popularity ratings fell immediately. The House, with many Republicans in opposition killed a compromise deficit-reduction plan. As a result, the government was almost forced to shut down for lack of money while a new budget proposal was drafted.
In the final days of the 101st Congress the president and Congress reached a compromise on a budget package that increased the marginal tax rate and phased out exemptions for high-income taxpayers. Despite his repeated demands for a reduction in the capital gains tax, Bush had to surrender on this issue as well. This agreement with the Democratic leadership in Congress was a turning point in the Bush presidency. His popularity among Republicans never fully recovered, and the compromise plan reduced the size of the deficit only marginally, despite Bush’s claim that it was the toughest deficit reduction package ever approved.
As the unemployment rate edged upward in 1991, Bush signed a bill providing additional benefits for unemployed workers. He aggressively sought to create new jobs through increases in exports, and to that end he visited Australia, Singapore, South Korea, and Japan in January 1992. Despite hopes for a major agreement with Japan, he obtained only modest Japanese concessions to purchase American products.
Bush’s 1992 State of the Union address offered a plan for economic growth that called for a moratorium on new government regulations on business, a cut in the capital gains tax, and the elimination of numerous domestic programs he deemed undeserving of federal funding. He also endorsed a health-insurance tax credit for poor families and a tax credit for first-time homebuyers. Congress adopted some of his proposals, but Bush vetoed the final bill because it raised taxes on the wealthy. By late 1992 he had cast 35 vetoes, none of which was overridden. The streak ended in October 1992 when Congress, urged on by consumers, overrode his veto of a bill that reversed portions of a law barring local governments from regulating cable-television fees.
In 1992 interest rates and the inflation rate were the lowest in years, but by midyear the unemployment rate reached 7.8%, the highest since 1984. In September the Census Bureau reported that 14.2% of all Americans lived in poverty, the highest proportion since 1983.
As his administration seemed to drift in the face of declining economic conditions, Bush shook up his White House staff twice. His first chief of staff, John Sununu, a former governor of New Hampshire, stepped aside in 1991 and was succeeded by Samuel Skinner, the secretary of trans portation. Skinner, in turn, bowed out in 1992 and was succeeded by Secretary of State James A. Baker, 3d, who also assumed overall supervision of Bush’s reelection campaign.
In 1990, when the president had his first opportunity to fill a Supreme Court vacancy, he nominated an obscure federal judge from New Hampshire, David H. Souter, who was easily confirmed. In 1991, following the retirement of Thurgood Marshall, the only black on the Supreme Court, Bush nominated another black, Clarence Thomas, a federal court of appeals judge with strong conservative views. Some women’s and civil rights organizations opposed the nomination. Bush characteristically remained steadfast in his support, even after a former member of Thomas’s staff, law professor Anita Hill, accused the judge of sexual harassment in nationally televised hearings. Thomas was confirmed, 52-48.
