When George H. W. Bush was sworn in as President on January 20, 1989, he took over from the very popular Ronald Reagan. In his inaugural address, Bush spoke about the plight of homelessness, crime, and drug addiction. He advocated volunteerism and community involvement, pledging to support "a thousand points of light, of all the community organizations that are spread like stars throughout the Nation, doing good." He talked about working with the Democratic Congress and tackling tough issues such as the budget. He pledged to begin a new chapter with "unity, diversity, and generosity." Despite his initial promise to work with Congress, however, President Bush often depended on the veto power (he vetoed forty-four bills during his tenure, and Congress only overrode one), and he occasionally used the threat of a veto to shape legislation. The President would go on to have a particularly acrimonious relationship with Senate Majority Leader George Mitchell, whom he viewed as excessively partisan.

Bush began to assemble his administration by turning to old friends. He appointed James Baker as secretary of state and Lee Atwater as the chairman of the Republican National Committee. He kept on some of President Reagan's staffers, including Marlin Fitzwater as his press secretary, and he hired John Sununu, former governor of New Hampshire who helped orchestrate Bush's primary win there, as chief of staff. Brent Scowcroft became national security adviser. Bush initially nominated John Tower as his secretary of defense but the Senate voted against his confirmation due to charges of inappropriate behavior, including excessive drinking and "womanizing". Bush loyally stuck with Tower's nomination through to the end; he then turned to Dick Cheney to serve as defense secretary.

Federal Budget

When Bush took office in 1989, the federal budget debt stood at $2.8 trillion, three times larger than it had been in 1980. This financial situation severely limited the President's ability to enact major domestic programs. The federal government did not have the revenues for any large, new domestic ventures, nor did the political climate lend itself to enacting them. To compensate for these constraints, Bush stressed "a limited agenda," that included volunteerism, education reform, and anti-drug efforts. President Bush did not come into office promising to preside over an era of great change; he won the presidency basically vowing to maintain the status quo and preserve the legacy of his predecessor.

Having pledged during the campaign not to raise taxes, the President found himself in the difficult position of trying to balance the budget and reduce the deficit without imposing additional taxes on the American people. He also faced a Congress controlled by the Democrats. Although Republicans thought that the government should approach the budget deficit by drastically cutting domestic spending, the Democrats wanted to raise taxes on the richest Americans.

Budget negotiations for the 1991 fiscal year proved especially contentious and problematic. Bush had no choice but to compromise with Congress, and his administration entered into lengthy talks with congressional leaders. The President had Chief of Staff John Sununu, Director of the Office of Management and Budget Richard Darman, and Secretary of the Treasury Nicholas Brady lead the discussions. In June 1990, Bush issued a written statement to the press, reneging on his "no taxes" pledge made during the campaign, noting that tax increases might be necessary to solve the deficit problem. In October, after a brief government shutdown that occurred when Bush vetoed the budget Congress delivered to him, the President and Congress reached a compromise with the Omnibus Budget Reconciliation Act of 1990. The budget included measures to reduce the deficit by cutting government expenditures and raising taxes. Many conservative Republicans felt betrayed when Bush agreed to raise taxes, or to include "revenue increases" as he called them in his statement after signing the bill.

On top of the budget crisis, Bush started his presidential tenure as the Savings and Loans industry was collapsing. The federal and state governments had deregulated the industry in the late 1970s and early 1980s, and the S&L industry ventured into riskier investments that destabilized it. In February 1989, with many S&Ls failing, Bush proposed a plan to help bail out the industry. The President reached a compromise with Congress that ended up costing taxpayers more than $100 billion. The collapse of the Savings and Loans and the subsequent government bailout only added to the difficult financial environment that Bush confronted during his presidency.

The Americans with Disabilities Act

President Bush signed two significant pieces of domestic legislation during his tenure. The first was the Americans with Disabilities Act of 1990, which forbade discrimination based on disability in employment, public accommodations, and transportation. For several years, Congress had been working on a bill for disabled Americans based on the 1964 Civil Rights Act, and Bush indicated in his acceptance speech at the Republican Convention that he supported such a bill, stating, "I am going to do whatever it takes to make sure the disabled are included in the mainstream."

The bill made it illegal for employers to discriminate against the disabled, guaranteed the disabled adequate access to places of business and public venues, expanded access to transportation, and provided for equivalent access to telecommunications. The President saw the bill as allowing people with disabilities more independence. When conservatives complained about the intrusion of the federal government into the private sector, the Bush administration countered that the ADA made it possible for disabled people to be less dependent on the government by giving them the chance to hold jobs and leave welfare rolls. The bill was a bipartisan effort with Democrats and Republicans joining together in Congress to pass it. Bush signed the ADA on July 26, 1990, to great fanfare. Although critics of the bill thought it was too expensive, supporters generally point to it as one of Bush's major domestic accomplishments. To this day, however, conservatives cite the ADA as an example of Bush's "betrayal" of the Reagan Revolution.

Clean Air Act

Bush took the lead with the other significant piece of domestic legislation he signed while in office: the Clean Air Act Amendments of 1990. Ironically, an environmental disaster aided his efforts; in March 1989, the Exxon Valdez oil tanker ran aground, and more than 10 million gallons of oil spilled into Prince William Sound in Alaska. The Exxon Valdez disaster made the public more receptive to the need for environmental protection. Bush also showed his support for the environment by appointing the first professional environmentalist to lead the Environmental Protection Agency (EPA) when he chose William Reilly as its head in 1989. The Clean Air Act Amendments of 1990 built on the first bill passed in 1963 and subsequent bills in 1970 and 1977. The 1990 amendments focused on three aspects of clean air: reducing urban smog, curbing acid rain, and eliminating industrial emissions of toxic chemicals. Although critics were concerned about the cost of the act and its effect on an already weakened economy, President Bush was deeply committed to environmental issues and claimed that by working with the business community to find innovative ways to improve the environment, the economy and the American people could both benefit. Congress passed the bill with significant support, and on November 15, 1990, President Bush signed the act.