5. Heroes and Villains of the Globalization Era: Clinton, the Republican Revolution, and Battle Over Government

My Name is Alice Rivlin: Making Government Work

I spent much of my life asking a question that sounds simple but rarely is: How can government make better decisions? I was an economist, but numbers were never merely numbers to me. A federal budget represents choices—about taxes, defense, health care, education, assistance to families, and the obligations one generation leaves to the next. My career took me from academic research to Congress, the White House, the Federal Reserve, and some of the most difficult budget debates in modern American government.

Finding My Place in Economics

I graduated from Bryn Mawr College in 1952 and later earned a doctorate in economics from Radcliffe College. Entering economics as a woman in those years was not easy. Harvard's school of public administration had rejected my application partly because officials considered a young woman who might marry a poor investment. I chose economics instead. In 1957, I joined the Brookings Institution, beginning an association that would continue, with interruptions for government service, for more than sixty years.

Government Should Measure What Works

During the Johnson administration, I worked at the Department of Health, Education and Welfare. We were trying to bring more systematic analysis into government: define a problem, examine alternatives, estimate costs, and determine whether a program actually accomplished its purpose. Experience taught me that economists did not possess all the answers. Career officials often understood problems that could not be captured neatly in a statistical model. Good policymaking required evidence, experience, and a willingness to reconsider your assumptions.

Building the Congressional Budget Office

In 1975, I became the founding director of the Congressional Budget Office. Congress needed its own independent source of budget and economic analysis rather than depending entirely on information produced by the executive branch. We built an organization intended to serve Congress regardless of which party held power. That meant our work sometimes displeased Democrats and sometimes displeased Republicans. That was not a defect. An analytical institution loses much of its usefulness if its conclusions change according to who happens to be asking the question.

Into the Clinton White House

In 1993, I joined President Bill Clinton's administration as deputy director of the Office of Management and Budget and became OMB director in 1994. The federal deficit was a major concern, and the administration was attempting to combine deficit reduction with its economic priorities. OMB sat at the center of that process. Every proposal had consequences, and every promise eventually encountered arithmetic. My responsibility was not simply to say that programs were desirable or undesirable. We had to ask what they cost, whether they worked, and how they fit within the government's larger responsibilities.

The Battle Over Government

After Republicans captured Congress in the 1994 elections, disagreements over federal spending and the role of government intensified. Those arguments contributed to the government shutdowns of 1995 and 1996. From OMB, I was directly involved in dealing with that confrontation. Budgets may appear to be columns of figures, but a shutdown demonstrates what those figures represent: federal employees, public services, agencies, contracts, and responsibilities that cannot simply disappear because political leaders have reached an impasse.

A Career Beyond the White House

In 1996, I left OMB and became vice chair of the Federal Reserve Board, serving until 1999. I later helped oversee efforts to restore Washington, D.C.'s financial stability and continued working on federal debt, health care, fiscal policy, and bipartisan budget reform. Again and again, I returned to the same principle: serious public problems require serious analysis. Political disagreement is inevitable, but disagreement should not prevent people from examining evidence or searching for workable solutions.

Clinton's First Battles Over the Size of Government — 1993–1994 - Told by Rivlin

When Bill Clinton entered the White House in January 1993, Americans were not simply arguing about how much the federal government spent. They were arguing about what Washington should do in the first place and how much power it should wield over individual citizens. The Republicans wanted less power over the individuals while the Democrats wanted more power to regulate and control the effects of government functions.

I joined the administration as deputy director of the Office of Management and Budget, where those philosophical arguments quickly became numbers on my desk. Clinton had promised investment in America's future, but he also inherited a federal budget deficit of roughly $290 billion from fiscal year 1992. Every new proposal therefore raised the same uncomfortable question: if we wanted government to accomplish something, how were we going to pay for it?

A Democrat Promising to Change Government

People sometimes remember the early Clinton administration simply as an effort to expand federal programs. That misses an important part of the story. Clinton believed government could play a constructive role in areas such as education, infrastructure, health care, and economic opportunity, but he also campaigned on making government more efficient. I had been thinking about similar questions myself. Before joining the administration, I had argued that responsibilities should be reconsidered between Washington and state governments. The real question was not simply "big government or small government?" It was which level of government should do which jobs—and whether it could do them effectively.

The Deficit Could Not Be Ignored

The first great test came in 1993. Clinton's economic program attempted to reduce projected deficits while preserving room for selected investments. It combined spending restraint with increased revenues, including higher income-tax rates on upper-income taxpayers. The resulting budget legislation passed without Republican support and by extremely narrow margins in Congress. Years later, when I was asked what accomplishment from my Clinton years made me proudest, my answer was the 1993 deficit-reduction package. It was politically difficult, but we believed that continuing to borrow at the existing rate would eventually limit everything else government hoped to accomplish.

Send in Al Gore—and Reinvent Government

Reducing the deficit was only half the argument. In March 1993, Clinton asked Vice President Al Gore to lead what became the National Performance Review. The mission was ambitious: examine the federal government, eliminate unnecessary bureaucracy, simplify procedures, improve service, and find ways to accomplish more with fewer resources. Its September 1993 recommendations included reducing the federal civilian non-postal workforce by 252,000 positions by 1999; Congress subsequently raised the workforce-reduction target to 272,900. This was not an argument that government had no responsibilities. It was an argument that taxpayers should expect government to perform those responsibilities efficiently.

Cutting Government While Asking It to Do More

Here was the contradiction we wrestled with every day. Americans wanted lower deficits and less bureaucracy, but they also wanted effective federal action on crime, education, the economy, health care, environmental protection, Social Security, Medicare, and many other concerns. Eliminating an organization on an organizational chart was easy compared with deciding which public responsibilities should disappear with it. By the end of 1994, Clinton reported that the federal workforce had already fallen by almost 100,000 positions since he took office, with further reductions planned. Yet he continued arguing that savings from bureaucracy could be redirected toward priorities he considered more valuable.

Then the Political Ground Shifted

By 1994, Republicans were presenting a much more aggressive challenge to Clinton's approach. Many argued that Washington taxed too much, spent too much, regulated too much, and had accumulated responsibilities better left to individuals, markets, states, or local governments. Democrats countered that reducing federal power could weaken programs and protections they considered important. Beneath the campaign slogans was a serious disagreement that Americans had been having for generations: when does government become too large, and when does cutting government prevent it from doing necessary work?

The Argument Was About to Become a Battle

From my perspective as a budget official, there was no magic wand. Government could be made smaller and more efficient, but choices had consequences. By the close of 1994, the Clinton administration had begun reducing the federal workforce and had enacted a major deficit-reduction program, but voters had just handed Republicans control of both houses of Congress. The debate was about to change dramatically. The question would no longer be whether Clinton could reinvent government on his own terms. Beginning in January 1995, a Republican Congress would arrive in Washington determined to offer its own answer to what government should cost, what it should control, and how large it should be.

My Name is Henry Hyde: A Life in Congress

For most of my public life I believed that politics mattered because ideas have consequences. Government possesses enormous power—the power to tax, spend, regulate, punish, protect, and even wage war. The Constitution places boundaries around that power, and I believed those boundaries deserved defending. I was a Republican and a conservative, certainly, but before any party came the obligation of a representative to argue his convictions openly and then cast his vote.

From Chicago to the Navy

I was born in Chicago on April 18, 1924. My generation came of age during depression and world war, and I served in the United States Navy from 1944 to 1946, remaining in the Naval Reserve until 1968. I graduated from Georgetown University in 1947 and earned my law degree from Loyola University Chicago in 1949. The law fascinated me because free government depends upon something stronger than temporary political power: rules that bind those who govern as well as those who are governed.

Entering the Political Arena

My political career began in Illinois. I served in the Illinois House of Representatives from 1967 through 1974 and became majority leader. Politics quickly taught me that conviction and compromise are not necessarily enemies. Legislators disagree—sometimes bitterly—but eventually someone must gather enough votes to govern. In 1974, the voters sent me to the United States House of Representatives, where I would remain for sixteen terms, from January 1975 until January 2007.

Fighting for Conservative Principles

Washington provided no shortage of arguments. I became particularly associated with opposition to abortion, and in 1976 I sponsored the provision that became known as the Hyde Amendment, restricting the use of certain federal funds for abortions. I also became involved in debates over constitutional law, criminal justice, property rights, family policy, and the proper limits of federal authority. My positions generated fierce opposition, but political office is of little value if the fear of criticism prevents you from saying what you believe.

The Republican Revolution

When Republicans won control of the House in the 1994 elections, Washington changed dramatically. After decades largely spent in the minority, Republicans suddenly possessed the responsibility of governing the House. I became chairman of the Judiciary Committee in 1995. The Contract with America brought numerous proposals before Congress, and the larger struggle concerned something Americans had debated since the country's founding: how much power should Washington possess, how much should it spend, and what responsibilities properly belong to the federal government?

The Judiciary and the Rule of Law

Chairing Judiciary eventually placed me at the center of one of the most contentious episodes of my career: the impeachment proceedings against President Bill Clinton. In 1998, I became one of the House managers responsible for presenting the House's case. The country was deeply divided over whether Clinton's conduct justified impeachment. My position was that the controversy concerned the rule of law and whether high office placed someone beyond accountability; Clinton and his defenders strongly disputed the case for removal. The House approved articles of impeachment, but the Senate subsequently acquitted the president.

Looking Beyond America's Shores

After leaving the Judiciary chairmanship, I chaired the House International Relations Committee from 2001 through 2006. Foreign affairs reminded me that constitutional government cannot be taken for granted. Around the world, people struggled with dictatorship, war, poverty, terrorism, and political instability. America's responsibilities abroad could be debated—and they certainly were—but questions of democracy, security, diplomacy, and human freedom demanded serious attention from Congress.

Republicans Prepare a National Congressional Campaign - Told by Henry Hyde

By 1994, I had served nearly twenty years in the House of Representatives, and I knew what it meant to belong to the minority. Democrats had controlled the House continuously since the 1954 elections. Republicans could win the presidency—we had demonstrated that repeatedly—but capturing the House seemed considerably more difficult. Yet as President Bill Clinton entered his second year, Republican leaders increasingly believed that the approaching midterm elections might provide an opportunity to do something we had not accomplished in four decades: build a Republican majority in the people's House.

Turning Local Races into a National Contest

Congressional campaigns had traditionally centered heavily on local candidates and district concerns. In 1994, Republican organizers increasingly connected individual House races to a common national message. Candidates talked about taxes, federal spending, crime, welfare, regulation, congressional practices, and the power of Washington. Republican candidates such as Sue Kelly of New York appeared with candidates from around the country and aligned their campaigns with the party's national effort. The objective was straightforward: give voters not merely hundreds of separate Republican candidacies, but a recognizable national agenda.

An Opposition Party Finds Its Message

President Clinton's first two years gave Republicans plenty to campaign against. His 1993 budget legislation had passed Congress without Republican votes, while his administration's health-care reform effort became another major source of partisan conflict. Republicans argued that the federal government taxed, spent, and regulated too much and that greater responsibility should be returned to individuals, families, communities, and states. Democrats disputed much of that argument, contending that federal action remained necessary to address economic and social problems. The election was therefore developing into something larger than a contest over personalities: it was becoming another chapter in America's long argument over the responsibilities of government.

The Contract Takes Shape

The most memorable element of the Republican strategy became the Contract with America. Developed under Republican leaders including Newt Gingrich and Dick Armey, it offered voters a specific set of promises about what a Republican House would bring to votes if Republicans won control. Its proposals covered congressional reforms as well as issues involving taxes, crime, welfare, government spending, regulation, and other federal policies. The strategy was unusual in its coordination: Republican candidates across many districts could campaign on a common set of national commitments.

September 27: Republicans Gather at the Capitol

On September 27, 1994, Republican House members and candidates assembled outside the United States Capitol to promote the Contract with America. Candidates from across the country signed onto the program and promised action if voters gave Republicans control of the House. That mattered politically because we were putting commitments in writing before the election. Critics challenged both the proposals and their likely consequences, but voters could at least see a defined Republican legislative program rather than simply an argument against President Clinton.

Something Was Changing

As Election Day approached, Republican campaigns continued pressing their national message while Democrats defended their records and warned about the consequences of the Republican agenda. Nobody had repealed the basic rule of elections: every district would still choose its own representative. But collectively those hundreds of local decisions could transform Congress. The question was whether dissatisfaction with Washington, combined with Republican organization and a national agenda, would be sufficient to overturn forty years of Democratic control of the House.

November Was Coming

We did not yet know what Election Day would bring. We knew only that Republicans had attempted something ambitious: turn a midterm congressional election into a national argument over the direction of government. On November 8, Americans would decide hundreds of individual races. When those ballots were counted, Republicans gained 54 House seats, producing a 230–204 Republican advantage with one independent, while Republicans also captured control of the Senate. For the first time in forty years, Republicans would control both chambers of Congress. The campaign was finished. The much harder task—turning campaign promises into legislation—was about to begin.

The Contract with America — September 1994 - Told by Henry Hyde

By September 1994, Republicans had spent forty years trying to regain control of the House of Representatives. I had served there since 1975, so I knew the frustration of being in the minority. But this election felt different. Instead of asking voters simply to elect individual Republican candidates, our party was preparing to tell Americans what a Republican House intended to do if given control. The result became one of the most recognizable political documents of the decade: the Contract with America.

Putting Our Promises on Paper

The Contract was closely associated with Republican leaders Newt Gingrich and Dick Armey, but it was designed as a national congressional agenda. More than 300 Republican House incumbents and candidates signed it. Rather than promising that every proposal would automatically become law—something the House alone could not guarantee—we pledged that a Republican-controlled House would bring specified measures to the floor for debate and votes during its first 100 days. That distinction mattered. We were asking voters to judge us on whether we would actually put our proposals before Congress.

September 27, 1994

On September 27, Republican representatives and candidates gathered on the steps of the United States Capitol. It was deliberately theatrical, but politics has always involved presenting choices publicly. Candidates had traveled from across the country to associate themselves with a common program. Republican congressional candidates such as Sue Kelly of New York incorporated the Contract into their individual campaigns, demonstrating how local House races were being connected to a national Republican strategy.

Changing Congress Itself

Our first promises concerned the institution we hoped to control. Republicans proposed changes to House procedures, including requiring Congress to live under laws that applied to the rest of the country, changing committee practices, and seeking greater accountability in congressional operations. The larger message was that Republicans were not merely proposing different federal policies; we were arguing that Congress itself needed reform.

Ten Major Legislative Promises

Then came the policy agenda. The Contract called for votes on ten major measures during the first 100 days of a Republican House. These proposals addressed issues including a balanced-budget constitutional amendment, crime, welfare reform, family and tax policies, national defense, federal regulation and litigation, and congressional term limits. The proposals reflected Republican arguments for reducing federal spending and changing the relationship between Washington and individual citizens, businesses, families, and state governments. Subsequent legislation implementing parts of the Contract included proposals for tax relief.

Democrats Read the Fine Print

Democrats certainly did not accept our description of what these proposals would accomplish. Before the Contract was even formally signed, Democratic representatives attacked its mathematics and priorities. Some argued that Republicans were promising tax reductions, greater defense spending, and a balanced budget without adequately identifying the spending reductions necessary to make those goals compatible. Others objected to Republican candidates committing themselves to a national program rather than concentrating on the particular interests of their districts. Those criticisms became an important part of the 1994 campaign.

A Contract Is Tested After It Is Signed

The Contract did not determine the election by itself, nor did every voter support its proposals. But it gave the Republican campaign a specific national agenda at an important moment. On November 8, Republicans captured 230 House seats to the Democrats' 204, with one independent, ending forty years of Democratic control of the chamber. Republicans also captured the Senate.

Now the language of campaigning would collide with the realities of governing. We had told the country what we intended to bring before the House. Beginning in January 1995, Republicans would possess the majority needed to try. President Clinton would still hold the veto pen, Democrats would still fight us on the floor, and even Republicans would not agree on everything. Signing the Contract had been the easy part. Governing would reveal just how difficult our promised revolution was going to be.

My Name is Robert Dole: Soldier, Senator, and Republican Leader

Most people called me Bob. I came from Russell, Kansas, and if you had told me as a boy that I would someday lead Republicans in the United States Senate and run for president, I probably would have wondered what you had been drinking. My life did not follow the course I expected. War changed it first. Politics changed it again. Along the way, I learned that public service requires convictions strong enough to fight for and enough common sense to know when it is time to make a deal.

A Kansas Boy Goes to War

I was born in Russell on July 22, 1923. I attended the University of Kansas and played football and basketball and ran track before World War II interrupted those plans. I joined the Army and became an infantry officer with the 10th Mountain Division. In April 1945, while fighting in Italy, I was critically wounded. I lost much of the use of my right arm and spent years recovering. At the hospital I met other wounded veterans, including Daniel Inouye and Philip Hart, who, remarkably enough, would later serve beside me in the Senate.

Learning to Begin Again

Recovery was not quick, and there was no guarantee that I would regain enough strength to live independently. But the people of Russell raised money to help with my medical expenses, and I never forgot it. Eventually, I completed my education, earned a law degree, practiced law, and entered public service. I served in the Kansas legislature and as Russell County attorney before being elected to the United States House of Representatives in 1960. Eight years later, Kansas elected me to the Senate.

Learning How Washington Works

Politics is a contact sport, and I was never particularly famous for avoiding contact. I could be sharp in debate, and I was a Republican who believed in fiscal discipline, limited government, and a strong national defense. But legislation requires votes. I worked with Democrat George McGovern on food assistance and helped negotiate a bipartisan agreement strengthening Social Security. As chairman of the Senate Finance Committee, I discovered that principles mattered, but arithmetic mattered too. If you wanted something accomplished, eventually you had to count the votes and start negotiating.

Leading Senate Republicans

In 1985, my Republican colleagues elected me their Senate leader. Sometimes we were the majority; sometimes we were the minority. Either way, the job remained difficult. The Senate was built to slow things down, encourage debate, and force people who disagreed to work with one another. I fought Democrats plenty of times, but I also worked with them. Compromise did not require abandoning your principles. Sometimes it meant recognizing that getting seventy percent of what you wanted was better than giving speeches and getting nothing.

The Republican Revolution

The 1994 elections returned Republicans to control of both houses of Congress. I became Senate Majority Leader again in 1995, just as President Bill Clinton faced a newly empowered Republican Congress. We disagreed sharply over spending, taxes, welfare, and how quickly the federal budget should be brought toward balance. Those disagreements helped produce the government shutdown confrontations of 1995 and 1996. It was partisan politics, certainly, but it was also a genuine argument over what Americans expected their federal government to do and how they intended to pay for it.

One Last Campaign

In 1996, I decided to seek the presidency. I had run before, and I knew something about losing elections by then. I resigned from the Senate that June and accepted the Republican presidential nomination. President Clinton defeated me in November. Losing was never enjoyable, but democracy requires somebody to lose, shake the winner's hand, and go home. The country is more important than any candidate's disappointment.

My Final Chapter

After leaving politics, I continued working for veterans and helped champion the National World War II Memorial. I received the Presidential Medal of Freedom in 1997 and the Congressional Gold Medal decades later. I died in 2021 at ninety-eight. Looking back, I know my sharp tongue sometimes wounded people, and there were political judgments I might have handled differently with the benefit of time. For those moments, I am sorry. But I never lost faith in the idea that Americans can disagree fiercely and still work together. You fight for your principles, count the votes, accept defeat when it comes, and get back to work. That is politics. More importantly, that is democracy.

The Republican Revolution: The 1994 Midterm Elections - Told by Robert Dole

I had been around politics long enough to know that election nights can make experts look foolish. By November 1994, I was the Republican leader in the Senate, but Democrats controlled the chamber and had controlled the House for forty years. Republicans believed voters were dissatisfied with President Bill Clinton's first two years and with Democratic control of Congress. We campaigned on reducing federal spending, changing welfare, cutting taxes and regulation, addressing crime, and reforming Congress. Then came November 8. By the time the returns were clear, Washington had been turned upside down.

Why 1994 Was Different

Midterm elections often hurt the president's party, but several forces made 1994 especially significant. Clinton's 1993 budget had passed without Republican support, his health-care initiative had encountered intense opposition, and Republicans were running a coordinated national campaign. In the House, the Contract with America gave many Republican candidates a shared legislative program. Democrats defended their policies and argued that Republican proposals would weaken federal programs and protections. Voters therefore encountered a genuine argument about taxes, spending, regulation, social programs, and the proper responsibilities of Washington.

Election Night Becomes a Republican Wave

The results went far beyond a few competitive districts. Republicans gained 54 House seats, leaving the incoming House with 230 Republicans, 204 Democrats, and one independent. That ended the Democratic House majority that had existed continuously since the 1954 elections. Republicans also captured the Senate majority. When the 104th Congress assembled in January 1995, Republicans controlled both chambers simultaneously for the first time in forty years.

The Senate Changes Hands

The Senate result changed my job overnight. I had led Senate Republicans since 1985—first as majority leader and, after Democrats captured the Senate in 1986, as minority leader. Now Republicans were returning to power after eight years in the minority. The new Congress initially contained 52 Republican and 48 Democratic senators; after Alabama Senator Richard Shelby changed his affiliation from Democratic to Republican immediately after the election, the division became 53–47. I would return to the majority leader's office.

Winning Is Easier Than Governing

Election night celebrations do not pass legislation. Republicans now controlled Congress, but Bill Clinton was still president, and he possessed the veto. The House could move rapidly because a majority controls much of its agenda. The Senate was another matter. Its rules and traditions frequently required broader agreement, and Republicans did not possess enough seats simply to ignore Democratic opposition. I knew that speeches about revolution would eventually encounter Senate procedure, competing Republican viewpoints, presidential vetoes, and the arithmetic of getting enough votes.

What Did the Election Mean?

Republicans described the result as a mandate for changing Washington, while Democrats disputed how broadly the results should be interpreted. What could be stated without argument was that the electorate had dramatically changed the balance of power. Republicans now had the opportunity to bring their proposals on budgets, welfare, taxes, regulation, and congressional reform to the floor. Whether those proposals would become law was another question entirely. Control of Congress gave us power, but it did not give us unlimited power.

The Revolution Comes to Washington

When the 104th Congress opened in January 1995, the campaign slogans had to become bills, budgets, amendments, negotiations, and votes. I was once again Senate Majority Leader, and Republicans suddenly had the responsibility we had spent years asking voters to give us. The next struggle would be with President Clinton over what government should do and how much it should spend. Before long, those disagreements would become so severe that parts of the federal government would actually shut down. The Republican Revolution had won an election. Now we were going to discover what happened when revolutionaries had to govern.

January 1995: A Different Washington Takes Power - Told by Henry Hyde

On January 4, 1995, I walked into the House chamber knowing that something fundamental had changed. I had entered Congress twenty years earlier, and during every one of those years Republicans had been the minority party in the House. Now there were 230 Republicans, 204 Democrats, and one independent. Republicans controlled both houses of Congress for the first time in forty years, while Democrat Bill Clinton remained in the White House. Washington had entered an era of divided government, and nobody could be certain where it would lead.

A New Speaker Takes the Gavel

One of the clearest symbols of change came immediately. On the opening day, the House elected Newt Gingrich of Georgia Speaker by a vote of 228 to 202, with four members voting present. Republicans who had spent years criticizing Democratic control of the institution were suddenly responsible for running it. Gingrich and the new leadership intended to move quickly on the Contract with America. We had spent the campaign telling voters what we wanted to do. Now the voters had given us the opportunity—and the burden of proving that those promises meant something.

Changing the House on Day One

We did not wait long. The first legislative day stretched for more than fourteen hours, finally ending after two o'clock the following morning. Republicans pushed through changes to the rules of the House, including reducing committee staffs, limiting most committees to five subcommittees, changing congressional procedures, and requiring greater accountability within the institution. The House also overwhelmingly approved legislation applying workplace and civil-rights laws to Congress. Before trying to change the federal government, Republicans wanted to demonstrate that Congress itself would operate differently.

For Me, a New Responsibility

My own position changed as well. I became chairman of the House Judiciary Committee, an institution concerned with constitutional amendments, criminal law, civil liberties, the federal courts, and many of the most contentious legal questions Congress could confront. One of the Contract's promises, for example, was a House vote on congressional term limits, and Judiciary considered that proposal in February. For years I had argued from the minority side of committee rooms. Now Republicans controlled the hearings, schedules, and legislation. Authority has a way of making political philosophy considerably more complicated.

The First 100 Days Begin

The new majority had deliberately set itself a deadline. During the first 100 days, the House would vote on the major items promised in the Contract with America. The agenda included a balanced-budget amendment, welfare changes, tax proposals, crime legislation, regulatory changes, national-defense issues, and term limits. The schedule was punishing. Members who had spent years complaining that Congress moved too slowly suddenly found themselves racing from committees to debates to votes as Republican leaders tried to demonstrate that the election had produced more than a change in office assignments.

Across Pennsylvania Avenue Stood Bill Clinton

There was, however, an important fact no Republican could ignore: we had captured Congress, not the presidency. Clinton could negotiate with us, oppose us, or veto legislation that reached his desk. Democrats still possessed substantial numbers in both chambers, and the Senate's procedures made passing legislation more complicated than simply counting Republican seats. Republicans viewed the election as authorization to pursue substantial changes; Democrats challenged both our policies and our interpretation of the voters' message. Divided government meant neither side could simply command Washington.

The Battle Over Government Begins

That January, the atmosphere was energetic, confrontational, and uncertain. Republicans wanted to reduce spending, change welfare, restrain federal regulation, lower some taxes, and move toward a balanced budget. Clinton and congressional Democrats disagreed with significant portions of that program and defended federal responsibilities Republicans wanted to restructure or reduce. Those disagreements would soon move beyond speeches and committee hearings. Clinton would veto Republican spending and tax legislation, and the struggle over the budget would eventually contribute to two government shutdowns. But in January 1995, all of that still lay ahead. For the first time in forty years, Republicans had Congress. The question was no longer whether we could win power. It was what we would do with it.

The First 100 Days and the Attempt to Rewrite Government - Told by Henry Hyde

When Republicans took control of the House in January 1995, we did not intend to spend our first months admiring the new seating arrangement. The Contract with America had promised votes on a series of proposals within the first 100 days, and the clock began running the moment the 104th Congress assembled. After forty years without a Republican House majority, there was tremendous pressure to demonstrate that the election had consequences. We wanted to change Congress itself, but we also wanted to reconsider the relationship between citizens and their federal government. Whether Americans regarded that as reform or retrenchment depended considerably on which side of the aisle they occupied.

Start by Changing Congress

We began with ourselves. The new House adopted rules reducing committee staffs, eliminating several committees and subcommittees, ending proxy voting in committees, imposing term limits on committee chairmen and the Speaker, requiring an audit of House finances, and changing other congressional procedures. Congress also passed the Congressional Accountability Act, applying specified workplace and civil-rights laws to the legislative branch. Republicans argued that Congress should not impose rules on the country while exempting itself from them. These institutional reforms were important because our argument about limited and accountable government would have sounded rather hollow if we refused to apply it to our own institution.

Then Came the Legislative Sprint

The pace became extraordinary. The Contract called for House votes on ten major areas, including a balanced-budget constitutional amendment, welfare reform, tax changes, crime legislation, national security, regulatory and legal reform, and congressional term limits. One proposal after another moved through committees and onto the House floor. Republicans ultimately brought all ten promised areas to votes within 100 days. Nine of the ten major Contract measures passed the House in some form; the exception was the proposed constitutional amendment imposing congressional term limits, which failed to receive the required two-thirds majority.

My Committee Enters the Fight

As chairman of the Judiciary Committee, I found myself directly involved in several of these battles. Our committee handled proposals involving crime, legal reform, and term limits. On February 28, for example, Judiciary acted on a proposed constitutional amendment that would have limited House and Senate service to twelve consecutive years. Term limits were popular with many Republicans who argued that Congress needed more turnover, while opponents—including members of both parties—argued that voters themselves should decide how long representatives remained in office. On March 29, the House considered several term-limit proposals, but none reached the two-thirds threshold required for a constitutional amendment.

What Does Washington Really Need to Do?

Behind these individual bills stood a much larger argument. Republicans generally sought to restrain federal spending, return greater authority to states and individuals, change welfare incentives, reduce regulation, and balance the federal budget. Democrats argued that portions of the Republican program threatened programs and protections upon which Americans depended. John Lewis and other Democratic members warned that the proposed restructuring would fall particularly hard on poorer Americans. Those were not trivial disagreements. We were arguing about where Washington's responsibilities should end and where those of states, communities, families, and individuals should begin.

Fraud and Abuse Were Not Imaginary Problems

There was documented evidence behind some demands for reform. In February 1995, the nonpartisan Government Accountability Office told Congress that federal means-tested programs had become extraordinarily complex, with numerous federal, state, and local agencies administering overlapping programs. GAO concluded that many were inherently vulnerable to fraud, waste, and abuse because of their size and complexity and that government often lacked adequate information for judging whether programs achieved their objectives. Food stamps provided a concrete example: GAO had documented trafficking, counterfeiting, and theft involving the old paper-coupon system and was examining electronic benefit cards as a way of reducing those abuses. Medicare presented another serious problem. In March 1995, GAO reported that unscrupulous providers were exploiting Medicare and Medicaid through practices such as overbilling and excessive services while weak controls made questionable claims difficult to detect. These findings did not mean that most recipients or providers were cheating the government. They did demonstrate that large federal programs contained real vulnerabilities that demanded attention.

Waste Extended Far Beyond Welfare

The problem was also much broader than assistance to poor families. In February 1995, GAO identified eighteen federal areas at “high risk” because of vulnerability to waste, fraud, abuse, or mismanagement. The list included Medicare claims, Defense Department contracting and inventory management, IRS receivables, student financial aid, farm loans, HUD, NASA and Energy Department contract management, federal transit grants, and Superfund. Medicare had already been on GAO's high-risk list since 1990, and investigators reported inadequate oversight of claims and opportunities for substantial savings from correcting reimbursement and payment practices. That evidence strengthened the argument that reform should not simply mean taking benefits away from poor people. The larger challenge was making an enormous federal government account for the money it collected and spent. Republicans and Democrats could disagree sharply over how much government should do, but documented weaknesses gave Congress legitimate reasons to examine whether programs were being administered efficiently and whether taxpayers' money was reaching its intended purposes.

Passing the House Was Only the Beginning

There was one problem with calling this a revolution: the Constitution does not allow one chamber of Congress to rewrite the government by itself. The Senate could change or reject our bills. President Clinton could veto legislation. Constitutional amendments required supermajorities and state ratification. Even within the Republican Party, disagreements existed over particular proposals. The first 100 days therefore demonstrated both the power and the limits of an election victory. We could force debates and pass legislation through the House, but transforming those measures into national policy required something harder—agreement beyond our own majority.

The Revolution Meets the Constitution

By April 1995, Republicans could say that we had fulfilled the Contract's central procedural promise: the House had debated and voted on the promised agenda. But voting was not governing. The Republican House, Republican Senate, and Democratic president now had to determine which ideas would become law. Clinton would eventually veto major Republican spending and tax measures, and disagreement over the federal budget would help produce two government shutdowns. The first 100 days had shown how quickly a determined majority could move. The months ahead would demonstrate something equally important: in American government, winning enough power to begin changing Washington is very different from possessing enough power to change it alone.

My Name is John Lewis: Making Good Trouble

I grew up believing that when you see something that is not right, not fair, and not just, you have a responsibility to do something about it. I was born on February 21, 1940, outside Troy, Alabama, one of ten children in a farming family. I grew up in the segregated South, where the color of your skin could determine where you went to school, where you sat, and whether your voice was heard. As a boy, I wanted to become a preacher. I practiced by preaching to the chickens on our farm. But before long, I discovered that faith could not simply be something I spoke about. It had to be something I lived.

Learning the Power of Nonviolence

When I went to school in Nashville, I studied the teachings of Jesus, Gandhi, and Dr. Martin Luther King Jr. I learned that nonviolence was not weakness. It required discipline—the ability to face hatred without becoming consumed by hatred yourself. As a college student, I participated in sit-ins challenging segregated lunch counters. In 1961, I joined the Freedom Rides challenging segregation in interstate transportation. We were arrested and beaten, but we kept moving. Between 1960 and 1966, I was arrested more than forty times while participating in the movement.

A Young Voice at the March on Washington

By 1963, I was chairman of the Student Nonviolent Coordinating Committee. I was only twenty-three years old when I stood at the Lincoln Memorial during the March on Washington alongside leaders such as Dr. King and A. Philip Randolph. I called for continued action against segregation and racial discrimination. We knew that speeches alone would not change America. Ordinary people had to organize, march, register voters, challenge unjust laws, and force the nation to confront the contradiction between its democratic ideals and the reality experienced by millions of its citizens.

Bloody Sunday

On March 7, 1965, Hosea Williams and I led hundreds of peaceful marchers across the Edmund Pettus Bridge in Selma, Alabama. We were marching for voting rights. State troopers ordered us to turn around and then attacked. I was struck in the head and suffered a fractured skull. For a moment, I thought I might die on that bridge. But Americans saw what happened. Photographs and television coverage spread across the country, Congress moved toward voting-rights legislation, and President Lyndon Johnson signed the Voting Rights Act that August. Our blood had been shed, but we had not answered violence with violence.

From Protest to Congress

I never stopped believing in protest, but eventually my journey carried me inside the government I had spent years petitioning to act. After years of community work and service on the Atlanta City Council, I was elected to the United States House of Representatives in 1986. Beginning in January 1987, I represented Georgia in Congress. The young man who once marched outside government buildings now walked through the halls of the Capitol and cast votes inside them.

The Battles of the 1990s

During the Clinton years, I watched another great argument about the purpose of government unfold. After Republicans took control of Congress in 1995, we debated welfare, federal spending, poverty programs, taxes, and the proper reach of Washington. I was a Democrat, and I opposed many Republican proposals when I believed they placed too great a burden on struggling Americans. But my experiences in the civil rights movement had taught me something larger than party loyalty: democracy requires citizens to speak, organize, protest, vote, and sometimes make what I called “good trouble” when conscience demands it.

Democratic Counterattack: What Should Government Protect? - Told by Lewis

When Republicans took control of Congress in January 1995, they said the American people had demanded change. On one point, I could agree: government could be improved. Waste should be eliminated. Fraud should be prosecuted. Programs that failed should be repaired. But I believed there was another question that could not be answered by looking only at a balance sheet: What responsibilities did we have to one another and how much should government play a part in enforcing that? I had spent my youth fighting for a federal government strong enough to enforce voting rights and challenge segregation when state and local authorities would not. So when Congress began talking about returning power to the states and dramatically restructuring federal programs, I wanted Americans to understand what might be lost as well as what might be saved.

The Battle Over Welfare

One of our fiercest confrontations came over welfare reform. Republicans argued that the existing system encouraged dependency and had failed many of the people it was supposed to help. There was bipartisan agreement that welfare needed reform, but enormous disagreement over how to accomplish it. The House Republican proposal would replace several existing programs with greater state control, impose stronger work requirements, and restrict eligibility and benefits in certain circumstances. I believed some provisions placed too much of the burden of reform on poor families and children. During the March 1995 debate, my language became extraordinarily severe when I compared the Republican approach to historical persecution including the Nazi Germany and “the reign of the Nazis”. Heck, I even said that the Republicans were “worse than Hitler”—remarks that angered Republicans and illustrated just how bitter the welfare debate had become.

Medicare Becomes the Next Battlefield

Then came Medicare. Republicans argued that Medicare's rapid spending growth was unsustainable and pointed to the program's own trustees, who warned in 1995 that its financial condition required urgent attention. Their budget sought to slow the projected growth of Medicare spending while restructuring portions of the program. Republicans therefore objected to calling their proposal a simple "cut," because total Medicare spending would continue increasing. Democrats focused instead on how much lower future spending would be compared with existing projections and what that might mean for beneficiaries. I went to the House floor on May 9 and argued that seniors should not face higher health-care costs while Congress simultaneously considered substantial tax reductions.

Protecting More Than a Program

For me, Medicare, Medicaid, education, and assistance to struggling families were not merely entries in a federal ledger. They represented decisions Americans had made about risks they believed should be shared. Republicans responded that protecting these programs also required controlling their costs, eliminating waste, and preventing rising debt from burdening future generations. That was a legitimate argument, and the federal government did face serious fiscal pressures. Our disagreement concerned how reform should be distributed. Democrats repeatedly argued that deficit reduction should not fall disproportionately on elderly, poor, or working Americans while tax benefits were being offered elsewhere. I was even hesitant to looking at fraud and waste in the welfare system because it would slow down or eliminate assistance to the poor in the same programs where the fraud would have been found.

A Different Target: Corporate Welfare

Democrats also challenged Republicans on the definition of government waste. If Congress intended to examine assistance to poor Americans, some of us argued that it should also examine tax preferences, subsidies, and other benefits provided to businesses. Democratic members called some of these provisions "corporate welfare" and argued that deficit reduction should place those benefits on the table as well. The debate therefore became more complicated than simply Republicans demanding cuts and Democrats defending spending. Both parties claimed to be protecting taxpayers; they often disagreed profoundly about which expenditures were necessary, which were wasteful, and who should bear the sacrifices required to balance the budget.

The Meaning of Federal Power

I could not discuss these questions without remembering where I came from. During the civil rights movement, state governments had sometimes been the institutions denying Black Americans equal protection and voting rights. Federal courts, Congress, and eventually federal law became essential to breaking legalized segregation. That history did not mean Washington should administer every program forever or that every federal dollar was wisely spent. It did mean that I was cautious when politicians spoke as though transferring responsibility away from Washington was automatically an improvement. Government power can be abused, but government power can also protect people whose rights or opportunities are being denied.

Two Visions Collide

By late 1995, this disagreement had grown into a struggle over the federal budget itself. Republicans wanted a path to balance within seven years and defended substantial changes in the growth of Medicare, Medicaid, welfare, and other spending. Clinton and congressional Democrats accepted the goal of deficit reduction while opposing important parts of the Republican plan. I argued on the House floor that a balanced budget should also protect Medicare, Medicaid, education, and other priorities. Republicans answered that failing to control spending threatened those very programs and transferred debt to future generations.

That was the heart of our counterattack. We were not simply debating whether government should become larger or smaller. We were debating what government was obligated to protect, how much those promises should cost, and who should pay for them. Soon that disagreement would become so severe that parts of the federal government itself would close. The argument over America's safety net was becoming an argument over whether Washington could remain open at all.

Welfare Reform and the Fight Over Dependency, Work, and Responsibility — 1995–1996 - Told by Henry Hyde and John Lewis (Fictional Interaction)

By 1995, Washington was arguing about something larger than a government program. Republicans and Democrats increasingly agreed that America's welfare system needed reform, but agreement quickly disappeared when we began deciding what reform should mean. Aid to Families with Dependent Children, or AFDC, provided federal-state cash assistance to eligible families with children. Republicans wanted stronger work requirements, greater state authority, and limits on how long assistance could continue. Many Democrats supported moving recipients toward employment but feared that poorly designed restrictions could punish children and families unable to find adequate work. The fight became a debate over dependency, opportunity, responsibility, poverty—and what Americans owed one another.

Was the Welfare System Broken?

Henry Hyde: We Republicans did not invent dissatisfaction with welfare. President Clinton himself had campaigned in 1992 promising to "end welfare as we know it." His own 1994 proposal contemplated limiting AFDC benefits without work and requiring employment afterward. Republicans believed Washington had spent decades constructing a system that could sometimes make continued dependency easier than independence. Assistance should exist for people who genuinely needed it, but able-bodied adults should also be encouraged toward work and self-sufficiency. Welfare should be temporary help, not a permanent destination.

John Lewis: Henry, I agreed that people should have opportunities to work. The disagreement was over what happened when Washington imposed a deadline but a mother could not find a decent job, transportation, or someone to care for her children. Poverty was not simply a failure of motivation. People could work hard and remain poor. If Congress wanted recipients to move into employment, then we also had to confront child care, wages, education, transportation, discrimination, and the availability of jobs. Responsibility could not run in only one direction.

Henry Hyde: We would never write anything into law that would take a mother away from her young children. In the House Republican welfare plan, a single-parent family generally became subject to a work requirement after receiving assistance for more than 24 months. If the family's children were age 5 or older, the adult was generally required to participate in qualifying work activities or service for at least 30 hours per week. States could exempt up to 20% of these adults for reasons determined by the state. That was the law we proposed.

From Federal Entitlement to State Control

Henry Hyde: Republicans believed states needed greater freedom to experiment rather than administering a welfare structure dictated from Washington. Our proposals moved toward replacing AFDC with block grants, allowing states considerably more flexibility while establishing work requirements. Clinton himself had already granted numerous state waivers allowing experiments with welfare reform. If Wisconsin, Michigan, or another state discovered a better way to help people move from welfare to employment, why should Washington prevent it? The federal government did not possess a monopoly on wisdom.

John Lewis: And that word "states" carried a different history for me. I grew up in Alabama when state authority was used to maintain segregation and deny Black citizens the vote. That did not mean states could never administer welfare effectively, but it made me cautious about eliminating federal guarantees. On July 31, 1996, during debate over the final welfare legislation, I warned that abandoning the federal entitlement could leave poor children increasingly dependent upon where they happened to live. Other members explicitly connected my objection to my civil-rights experience: rights and protections could look very different from one state to another.

Henry Hyde: John, no one who knows your history could dismiss what you experienced in Alabama, and no one here is proposing that constitutional rights be returned to the discretion of the states. The Fourteenth and Fifteenth Amendments, the Civil Rights Act, the Voting Rights Act, and the Constitution remain the law of the land. But administering a welfare program is not the same thing as deciding whether an American possesses equal protection or the right to vote. Our argument is that governors and state legislatures are often closer to the problems of their own communities than officials in Washington and should have greater freedom to design programs that move people from dependency to work, as long as they administer them correctly and search for fraud and abuse like the federal government, if not, the federal government has the right to push back. The legislation does not simply abandon poor families: it provides federal block-grant funding, preserves Medicaid separately, provides billions for child care, establishes work requirements, and maintains federal rules and responsibilities in numerous areas. The question is not whether government should protect people in need. The question is whether protecting them requires Washington to administer one national cash-welfare entitlement indefinitely.

Work, Time Limits, and Responsibility

Henry Hyde: The central principle was that welfare and work should no longer exist in separate worlds. The legislation that finally emerged replaced AFDC with Temporary Assistance for Needy Families, or TANF. States receiving TANF funds faced escalating work-participation requirements, beginning at 25 percent of families in fiscal year 1997 and eventually reaching 50 percent. The new system also placed time limits on federally funded assistance. Republicans argued that government had responsibilities, but recipients capable of working had responsibilities as well.

John Lewis: Work could provide dignity and independence, but simply removing a welfare check did not create a paycheck. I wanted Congress to remember the children. A child had not created the family's economic circumstances and could not solve them. If reform meant helping parents obtain jobs while providing reasonable support during the transition, there was room for agreement. If reform simply reduced federal expenditures and declared victory when families disappeared from welfare rolls, I could not accept that as sufficient evidence that their lives had improved.

Clinton Says No—Twice

Henry Hyde: President Clinton rejected the first two Republican welfare bills. That demonstrated how substantial our disagreements remained. Republicans continued negotiating, however, and in 1996 Congress produced another measure. The revised legislation preserved Medicaid separately rather than restructuring it along with welfare, an important change made during the legislative process. The final bill passed both chambers with bipartisan support. Clinton now had to decide whether to veto welfare reform for a third time or sign legislation that accomplished much of the transformation he had promised as a candidate.

John Lewis: I still believed the final legislation went too far, particularly in ending the federal entitlement to cash assistance and restricting assistance for some legal immigrants. Other Democrats reached a different conclusion. President Clinton ultimately decided that the legislation was preferable to preserving the existing system, while saying there were provisions he wanted corrected later. That division among Democrats was real. Welfare reform was not simply Republicans against Democrats; it divided people who shared the goal of reducing poverty but disagreed sharply over the risks created by the new system.

August 22, 1996: Welfare Changes

Henry Hyde: Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act on August 22, 1996. AFDC, created more than sixty years earlier, was ended and replaced by TANF block grants. States received much greater flexibility, while work requirements and time limits became defining features of the new system. Congress had done something politicians had debated for years: fundamentally reorganized federal cash welfare for poor families.

John Lewis: And the argument did not end when the president's pen touched the paper. We would now have to ask harder questions. Were people leaving welfare because they had found stable employment, or because assistance was no longer available? Were their wages sufficient? What happened during recessions? Could states protect children while enforcing work requirements? In the strong economy of the late 1990s, welfare caseloads fell dramatically, but Clinton himself later acknowledged that economic growth, state experiments, and the 1996 law all contributed to the decline.

Two Ideas of Responsibility

Henry Hyde: To me, responsibility meant constructing assistance so that it helped people return to independence rather than unintentionally encouraging long-term dependency. Government could provide a safety net without making that safety net a permanent way of life.

John Lewis: To me, responsibility also meant remembering that society had obligations toward people facing circumstances they could not easily overcome. Work mattered. Personal responsibility mattered. But opportunity mattered too.

That was the welfare debate of 1995 and 1996. Americans were not merely deciding how many dollars Washington should spend. They were wrestling with a question that has never completely disappeared: when someone falls into poverty, where does individual responsibility end, where does government's responsibility begin, and how can assistance encourage independence without abandoning people who still need help?

The Budget Showdown and Government Shutdowns — 1995–1996 - Told by Robert Dole and Alice Rivlin

By 1995, Republicans controlled Congress, Bill Clinton controlled the White House, and both sides understood that the federal budget had become the battlefield on which their competing visions of government would be tested. Republicans insisted that Washington commit itself to balancing the budget within seven years. Clinton agreed that deficits should continue falling, but he initially rejected the Republican timetable and objected to the changes Republicans proposed for Medicare, Medicaid, taxes, and other programs. I, Bob Dole, led the Republican Senate. I, Alice Rivlin, directed Clinton's Office of Management and Budget. Before this struggle was over, parts of the federal government would close twice—and President Clinton would move significantly toward the balanced-budget goal Republicans had demanded.

Seven Years, Not Someday

Robert Dole: Republicans had won Congress promising to change the way Washington handled money, and we intended to make good on it. In March 1995, we came within one Senate vote of sending a balanced-budget constitutional amendment to the states. After that defeat, we pursued the goal through ordinary legislation. Our congressional budget aimed for balance within seven years. We argued that simply reducing the annual deficit was not enough. Washington needed a destination and a deadline. Clinton had already reduced deficits, but we wanted him to commit to eliminating them.

Clinton Moves Toward Balance

Alice Rivlin: The administration did not begin where congressional Republicans did. Clinton's 1993 economic program concentrated on substantial deficit reduction rather than promising that the budget would reach zero by a particular year. But Republican control of Congress changed the political environment. On June 13, 1995, Clinton announced a plan designed to balance the budget over ten years, and later that month he formally presented that approach to congressional leaders. That was an important shift: the argument was increasingly no longer whether the federal budget should eventually balance, but how quickly and through what combination of spending restraint, revenues, and economic assumptions it should happen.

Then We Hit the Wall

Robert Dole: Ten years was not seven. Republicans also insisted that the calculations use projections from the nonpartisan Congressional Budget Office rather than relying solely on the administration's Office of Management and Budget. But the dispute went much deeper than accounting. Republicans wanted slower growth in Medicare and Medicaid spending, welfare reform, tax reductions, and reductions in other federal spending. Clinton argued that portions of our plan went too far and would threaten priorities he wanted to protect. Neither side would give enough ground, and appropriations began expiring.

Washington Starts Closing

Alice Rivlin: On November 14, 1995, the consequences became real. Without agreement on funding, large portions of the federal government shut down. Hundreds of thousands of federal employees were furloughed during the first shutdown. It ended on November 19, but the budget disagreement remained unresolved. Then, on December 16, the government partially shut down again. This second shutdown lasted twenty-one days, extending into January 1996. National parks and many government offices closed or reduced operations, employees were furloughed, and ordinary administrative work was interrupted. A theoretical argument over federal spending had suddenly become visible to millions of Americans.

Clinton Accepts the Seven-Year Goal

Robert Dole: And something important happened during that confrontation. The president moved. Earlier in 1995, Clinton had proposed balancing the budget over ten years. By December and January, he was offering a plan intended to reach balance in seven years using CBO economic assumptions—the basic timetable and scoring method Republicans had been demanding. That did not mean Clinton accepted our budget. He certainly did not. We remained divided over Medicare, Medicaid, taxes, welfare, and domestic spending. But Republicans had helped move the debate. The Democratic president was now negotiating over how to balance the budget in seven years, not whether Washington should commit to balance at all. Contemporary Democrats themselves acknowledged that Clinton had accepted both the seven-year target and CBO numbers.

Agreement on the Destination, Not the Road

Alice Rivlin: That distinction matters. Clinton accepted the destination, but he did not accept the Republican route. Our proposals preserved more spending for Medicare, Medicaid, education, environmental programs, and other domestic priorities than congressional Republicans wanted, while Republicans continued advocating deeper spending changes and larger tax reductions. CBO comparisons in January 1996 showed substantial differences between the competing seven-year plans even though both sides were now constructing proposals around the goal of eventual balance. We had made remarkable progress on the central fiscal objective while remaining deeply divided over the policies needed to achieve it.

The Shutdown Ends, but the Argument Has Changed

Robert Dole: The second shutdown ended on January 6, 1996. Republicans had not forced Clinton to sign our entire budget, and Clinton had not forced Republicans to abandon the balanced-budget campaign. Politically, both sides paid costs and claimed victories. But one consequence was unmistakable: balancing the federal budget had moved from a Republican congressional objective to a goal publicly embraced by both the Republican Congress and the Democratic president. Days later, Clinton delivered his 1996 State of the Union address and famously declared that "the era of big government is over." Members of Congress immediately connected that statement with the struggle that had just taken place.

The Final Deal Was Still Ahead

Alice Rivlin: We should not rewrite history and pretend the budget was balanced in January 1996. It was not. Nor did Clinton simply surrender to the Republican program. The final bipartisan Balanced Budget Act would come in 1997 after further negotiation, and the strong economy and rising revenues would also play major roles in the eventual surpluses. But the confrontation of 1995–1996 changed the terms of the debate. Republicans had made a fixed timetable for balance the central demand of their congressional majority; Clinton moved from a ten-year proposal to accepting a seven-year goal while fighting over how it would be achieved. The shutdowns demonstrated the dangers of political stalemate, but the larger budget battle also pushed two opposing sides toward a destination neither could reach alone. That would set the stage for the next chapter: the booming economy, deficit reduction, the 1997 agreement, and ultimately the first federal budget surplus in decades.

After the Shutdown: Divided Government Learns to Govern — 1996 - Told by Robert Dole, Alice Rivlin, Henry Hyde, and John Lewis (Fictional Interaction)

The second government shutdown ended on January 6, 1996, but the struggle that caused it did not disappear. Republicans still controlled Congress. Bill Clinton was still president. We still disagreed over taxes, Medicare, Medicaid, welfare, education, regulation, and federal spending. Yet something had changed. Neither side had been able to impose its complete program on the other. If Washington was going to accomplish anything, divided government would have to become functioning government. The question of 1996 became surprisingly practical: after fighting so bitterly, what could we actually agree to do?

The Balanced-Budget Goal Survives

Alice Rivlin: The budget battle had changed the terms of the discussion. President Clinton had accepted the objective of balancing the federal budget within seven years using Congressional Budget Office assumptions, even though he continued rejecting important elements of the Republican plan. By January, Clinton was publicly saying that Republicans genuinely wanted a balanced budget and noting that the competing plans contained nearly $700 billion in savings they had identified in common. We were still fighting over Medicare, Medicaid, taxes, education, and environmental spending, but both sides had moved toward a shared fiscal destination.

Robert Dole: That mattered. Republicans had entered the 104th Congress insisting that balancing the budget could no longer be something Washington promised to accomplish someday. We wanted a timetable. Clinton had first proposed a ten-year path, but after months of confrontation he accepted the seven-year goal. We still believed his spending proposals did not go far enough, and he believed ours went too far. Nevertheless, the argument had moved. Now we were fighting largely over how to balance the budget rather than whether balancing it should be a national objective.

“The Era of Big Government Is Over”

Henry Hyde: Then came a remarkable moment. On January 23, Clinton stood before the Republican-controlled Congress for the State of the Union and declared that “the era of big government is over.” Republicans did not suddenly conclude that Clinton had become one of us. He immediately added that government still had important responsibilities and argued against leaving citizens to face major economic and social problems alone. But after the Republican victory of 1994 and the budget confrontation of 1995, a Democratic president was publicly embracing a more limited conception of federal government than Democrats had traditionally been associated with.

John Lewis: And I heard the other half of that sentence. Clinton did not say that government was over. He argued that government could not solve every problem but also warned against abandoning Americans to face problems by themselves. That distinction mattered to me. The civil-rights movement had taught my generation what federal power could accomplish when states failed to protect constitutional rights. We could make government smaller, more efficient, and more accountable without pretending that it no longer had obligations to vulnerable citizens.

Compromise Starts Producing Laws

Alice Rivlin: Gradually, legislation began emerging from the wreckage of the shutdown. In April, Clinton signed the Line Item Veto Act, which congressional Republicans had championed as another mechanism for controlling federal spending. The Supreme Court would later strike down that law as unconstitutional, but in 1996 it represented something important: Clinton and the Republican Congress could still find areas of agreement on fiscal reform.

Henry Hyde: And that was how divided government worked when it worked properly. Republicans could pass bills, but Clinton possessed the veto. Clinton could propose policies, but Republicans controlled the legislative agenda. Neither side could simply order the other to surrender. Sometimes legislation died. Sometimes the president vetoed it. Sometimes Congress changed its proposals. And occasionally we found enough common ground to put a bill on the president's desk that he was willing to sign.

Welfare Reform Breaks the Deadlock

John Lewis: Welfare demonstrated both the possibilities and the dangers of that process. Clinton had vetoed two earlier Republican welfare measures. In 1996, Congress produced another bill, and Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act on August 22. It ended Aid to Families with Dependent Children and replaced it with Temporary Assistance for Needy Families, incorporating greater state control, work requirements, and time limits. I opposed the final legislation because I believed parts of it endangered poor families and weakened important federal guarantees. Many other Democrats disagreed with me, and Clinton decided to sign it. The House's official history rightly describes welfare as one of the major areas where Congress and the White House ultimately compromised.

Robert Dole: That was a major Republican objective, but it also demonstrated that neither party owned the final law. Clinton had campaigned on ending “welfare as we know it.” Republicans supplied congressional pressure and legislation that went considerably further than many Democrats initially wanted. Clinton vetoed versions he opposed and eventually signed a revised bill. That is not as tidy as saying one side won. It is how legislation often happens: pressure, resistance, revision, another vote, and eventually a signature.

Neither Side Got Everything

Henry Hyde: By the end of 1996, the Republican Revolution had not dismantled the federal government, and Clinton had not restored the Washington that existed before the 1994 elections. Republicans had changed the agenda and forced questions about welfare, spending, regulation, and balanced budgets to the center of national politics. Clinton resisted proposals he believed went too far while adopting parts of the reform agenda himself. The result was not ideological purity. It was divided government.

John Lewis: And that was worth remembering. Compromise did not mean our disagreements had become unimportant. I still believed some Republican proposals threatened people government should protect. Republicans still believed many federal programs had become too large, expensive, or ineffective. Democracy did not require us to pretend those differences had vanished. It required us to continue governing despite them.

The Battle Changes Washington

Alice Rivlin: The fiscal story was not finished. The government had not yet reached a balanced budget, and the final bipartisan budget debate would continue into 1997. Economic growth, rising revenues, earlier deficit reduction, spending restraint, and subsequent negotiations would all contribute to what happened next. But 1996 marked an important transition. Clinton and congressional Republicans had accepted the same broad destination—a balanced federal budget—even while disagreeing intensely about the road.

Robert Dole: That may be the lasting lesson of those years. Elections matter. Opposition matters. Presidential vetoes matter. So does knowing when you do not have enough votes to get everything you want. The Republican victory of 1994 pushed Washington toward welfare reform, spending restraint, and a fixed balanced-budget goal; Clinton's resistance shaped what those policies ultimately looked like. After shutdowns demonstrated how far confrontation could go, 1996 demonstrated something else: divided government could fight, negotiate, compromise, and still govern. The next great question was whether all that fiscal pressure—combined with a rapidly growing economy—could finally turn decades of federal deficits into a balanced budget.