Consistent with the pragmatic remaking of his liberal image that had followed defeat in the 1980 Arkansas gubernatorial race, Clinton had begun a rightward shift immediately following the 1994 congressional debacle. In his 1995 State of the Union address, he uttered the words "The era of big government is over," and the following year signed welfare-reform legislation that severely limited the decades-old Democratic liberal commitment to making Washington a major source of assistance. He kept on course toward a balanced federal budget, and renewed his endorsement of the tight-money, anti-inflationary fiscal policies of Alan Greenspan, whom he reappointed as chairman of the Board of Governors of the Federal Reserve System. While this dismayed his liberal advisers, the 1996 election results showed that it had not cost him the support of the Democratic party's traditional working-class and minority base. He had won 60 percent of the vote of "labor-affiliated" Americans and 80 percent of the nonwhite vote.
In his second inaugural address in January 1997, therefore, Clinton felt free to advocate "a new government for a new century—humble enough not to try to solve all our problems for us, but strong enough to give us the tools to solve our problems for ourselves; a government that is smaller, lives within its means, and does more with less." Yet on the other hand, he promised, this limited and more frugal government would lead the nation into a triumphant twenty-first century, in which "schools will have the highest standards in the world... and the doors of higher education will be opened to all," where "the knowledge and power of the Information Age will be within reach... of every classroom, every library, and every child," where crime-free streets would "echo again with the laughter of our children," and "new miracles of medicine at last will reach not only those who can claim care now but the children and hardworking families too long denied." Of course, the United States would also maintain a strong defense, promote peace and freedom, and as "the world's greatest democracy [would] lead a whole world of democracies." Likewise, it would be "a nation that fortifies the world's most productive economy even as it protects the great natural bounty of our water, air, and majestic land." Finally, this "land of new promise" would reform its politics "so that the voice of the people will always speak louder than the din of narrow interests."
So there it was—ambitious promises to strengthen education and health care, clean up the environment and politics and the crime-ridden streets—somehow without enlarging the presence and spending of the government. The move to the center was confirmed by Clinton's own choice of a second-term team. This time there would be no nominees with hidden liabilities such as Zoë Baird, Clinton's first-term choice for attorney general, ultimately withdrawn; no controversial choices such as that of law professor Lani Guinier to head the Civil Rights division of the Justice Department, who became such a target for conservative ire that Clinton withdrew her name even before hearings began. The most senior department, State, got a new chief and its first female head in the person of Madeleine Albright, a longtime insider who proposed no particularly radical changes in the nation's foreign policy. Janet Reno continued as attorney general. Andrew M. Cuomo, son of the liberal Democratic former governor of New York, Mario M. Cuomo, gave a liberal tint to the Department of Housing and Urban Development as its new secretary. The new secretaries of Labor and Transportation were African Americans; the new ambassador to the United Nations, Hispanic, and Clinton even included a Republican, the former U.S. senator William Cohen, as his new secretary of defense. Positions at the Treasury and Commerce Departments were filled by appointees respected in investment and banking circles. All were presumably competent; none would rock the boat.
Clinton caught a break early in his second term when House Speaker Newt Gingrich, who had orchestrated the Republican takeover of Congress in Clinton's first term, was found guilty in 1997 by his congressional colleagues of misapplying tax-exempt donations to his educational foundations, and was fined and reprimanded. Though Gingrich continued to serve as Speaker, his rebuke suggested a weakening in the power of the cadre of right-wing revolutionaries that he had helped bring into office in 1994. Given Clinton's step toward center-right, and this possible movement of the Republicans toward the same position, it seemed as if Clinton could realize one of the final promises of his second inaugural speech, a truce to partisanship. Noting that the voters had chosen a president and Congress of different parties, he declared that they surely "did not do this to advance the politics of petty bickering and extreme partisanship.... They call on us instead to be repairers of the breach, and to move on with America's mission." The statement was vintage Clinton—a touch of evangelical zeal and a carefully calibrated set of nods and bows to both right and left, calculated to appease.
Continued prosperity also seemed to promise concord. The economy continued to show growth, low inflation, and low unemployment. Though millions of families still lacked health insurance and job security, and struggled to make ends meet by juggling family commitments with multiple jobs, the managerial and professional workers who were the backbone of the new middle class found the United States a goodly dwelling place, and wanted no political wrangling to disturb the idyll.
But the new Era of Good Feelings was not to be. In 1997 the 105th Congress made no headway in dealing with major issues such as rising medical costs and the codification of standards pertaining to patients' rights; environmental degradation and toxic waste cleanup; campaign finance reform; and the increasing concentration of ownership and wealth by a relatively small segment of the American populace. Proposals on these issues, and on measures such as giving the president fast-track authority to conclude trade agreements, were stymied, not only by partisanship but by the conflicting pressures of lobbying groups that neutralized each others' influence. Under a 1996 law, Clinton had new budgetary authority to exercise the "line-item veto" over individual parts of appropriations bills. (This was declared unconstitutional by the Supreme Court in 1998.) But he could only deny expenditures, not restore cuts, and 1997 ended with another budget standoff. The president refused to sign pared-down appropriations bills unless a few of his favored programs, such as more money for teacher training and modest boosts in the number of subsidized housing units, were reinserted. Yet given his own embrace of budget balancing (which, along with a surplus, was achieved in the spring of 1998), the debate was not so much about which initiatives should be robustly nourished as it was over parceling out what was left in balanced budgets after defense and other priorities had been met.
Nor did the president's apparent move to attach himself to such "Republican" issues as fiscal responsibility silence the steady drumbeat of attacks from the more ardent wing of the opposition. Accusations of improper fund-raising during the 1996 campaign dogged the White House. Clinton was denounced for "selling" audiences with himself and overnight invitations to the White House for campaign cash. The vice president was charged with making illegal calls from the Executive Office in search of contributions. Money from foreign sources—strictly forbidden—had also supposedly flowed into Democratic coffers through intermediaries. One donor country was China, which wanted to encourage Clinton's efforts to bring it into the international trading community despite public outcry over its human rights abuses. Meantime, the Whitewater probe ground on, producing more file cabinets full of depositions and securing convictions of some of the Clintons' Arkansas associates.
And then in January 1998 the name of Monica Lewinsky first appeared in newscasts; the unfolding story would, throughout the entire year, transfix the nation and imperil the Clinton presidency.