Bill Clinton's Domestic Policy: the Economy, Healthcare, Welfare & Social Policies

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  • 0:07 Economic Reform
  • 2:45 Welfare Reform
  • 3:37 Healthcare Reform
  • 5:13 Social Reform
  • 7:44 Lesson Summary
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Lesson Transcript
Instructor: Alexandra Lutz

Alexandra has taught students at every age level from pre-school through adult. She has a BSEd in English Education.

During the 1990s, President Bill Clinton met many of his domestic policy goals, including stimulating the economy, reforming welfare, and advocating for social change. He did not successfully achieve a national healthcare system.

Economic Reform

President Bill Clinton's campaign platform in the 1992 election had promised 'New Democrat' leadership. This involved a move to the political center, borrowing both liberal and conservative ideas. We can see this concept in President Clinton's domestic policy agenda. Let's talk first about his economic plan, commonly dubbed 'Clintonomics.'

Immediately after his first election, President Bill Clinton promised to quote 'focus like a laser beam' on the economy. By the end of his first year in office, he had signed a budget that included higher taxes and decreased spending in order to lower the federal budget deficit. In 1993, President Clinton also signed the controversial North American Free Trade Agreement (known as NAFTA), which was negotiated by the previous administration, to reduce tariffs across the continent.

In his 1996 State of the Union speech, President Clinton announced, 'The era of big government is over.' He then endorsed an even more conservative economic plan in cooperation with a Republican Congress. While keeping government spending at very low levels, the new budget reduced many taxes, including benefits for small businesses and a sharp decrease in the capital gains tax.

As a result of these policies and other economic factors, President Clinton's second term oversaw one of the nation's strongest periods of economic growth. Within a year, the federal government had a budget surplus, and the national debt was paid down from 66% of Gross Domestic Product (GDP) to 56%. For the sake of comparison, debt to GDP in the last quarter of 2013 was nearly 99%.

President Clinton supported the deregulation of the telecommunications, agriculture and broadcasting industries. He also signed several pieces of deregulatory banking legislation. The intent was to streamline and update a system that had been in place since the Great Depression, as well as loosen credit to encourage investment. But many critics suggest that this program, including provisions that encouraged banks to give mortgages to higher-risk borrowers, created an environment that led to the financial meltdown of 2008.

Welfare Reform

Bill Clinton's second term also saw the implementation of sweeping welfare reform, fulfilling a campaign promise 'to end welfare as we know it.' He signed into law a conservative policy to move many welfare recipients into the workforce and impose more limits on benefits, such as residency requirements. The new welfare program replaced most direct federal handouts with a system of block grants administered at the state level.

Yet it increased funding for food stamps, job training and child care. Related programs promoted 2-parent families and created a registry to enforce child support payments. Although the proposals were opposed by members of his own party, the program successfully reduced government dependency over its 6-year lifespan.

Healthcare Reform

One area where President Clinton was not so successful was in his effort to establish a national healthcare system. He set up a task force in 1993 to create a government-run, single payer system, which was assumed to be more efficient than the free market network of providers and insurers. His wife, Hillary Clinton, was the chairman. After months of secret planning, the committee submitted a lengthy, complicated plan to Congress. Ultimately, there were too many problems with the program itself, and too much political, economic and social opposition; the proposal died in Congress without ever going to a vote.

However, some of President Clinton's other healthcare goals were made law. For example:

  • S-CHIP, a federally supported, state-administered Children's Health Insurance Program provides medical coverage to all children whose families earn too much to qualify for Medicaid, but too little to afford private health insurance.
  • The Family and Medical Leave Act (FMLA) grants employees up to 12 weeks leave per year to seek medical treatment or to care for a newborn or other family member. While the leave doesn't have to be paid, it does guarantee the employee's job will still be there when he or she is ready to return to work.
  • President Clinton also loosened abortion restrictions and approved medical research using fetal tissue, while banning federal funding for human cloning research.

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