In the late 1980s, the United States faced a series of international crises. The Cold War came to an end in Europe, but events in the Middle East soon led the United States into its first major war since Vietnam.

The Soviet Union Collapses

How did Gorbachev’s attempts to revive the Soviet Union’s economy lead to a revolution?

When Ronald Reagan left office, many Americans wanted his domestic policies to be continued. In 1988 Republicans nominated George H. W. Bush, who reassured Americans that he would do just that:

"My opponent won’t rule out raising taxes. But I will. And the Congress will push me to raise taxes and I’ll say ‘no.’ And they’ll push, and I’ll say ‘no,’ and they’ll push again, and I’ll say to them: ‘Read my lips: no new taxes.’"

—from his acceptance address at the Republican National Convention, August 18, 1988

The Democrats hoped to regain the White House in 1988 by promising to help minorities as well as working-class and poor Americans. Civil rights leader Jesse Jackson tried to create a “rainbow coalition” of those groups, and although unsuccessful, he became the first African American to make a serious run for the presidential nomination. The Democrats nominated Michael Dukakis, who was the governor of Massachusetts, but with Reagan’s endorsement and a strong economy, Bush easily won the general election. Though voters had focused on domestic issues during the election campaign, President Bush had to focus on foreign policy soon after taking office.

Revolution in Eastern Europe

As president, Bush continued Reagan’s policy of cooperation with Soviet leader Mikhail Gorbachev. By the late 1980s, the Soviet economy was suffering from years of inefficient central planning and huge expenditures on the arms race. To save the economy, Gorbachev instituted perestroika, or “restructuring,” which allowed some private enterprise and profit making.

Gorbachev also established glasnost, or “openness,” to allow more freedom of religion and speech. Glasnost spread to Eastern Europe, and in 1989 revolutions replaced Communist rulers with democratic governments in Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. At midnight on November 9, 1989, guards at the Berlin Wall opened the gates. Soon, bulldozers began leveling the symbol of Communist repression. East Germany and West Germany soon reunited.

The End of the Soviet Union

As Eastern Europe abandoned communism, Gorbachev faced mounting criticism at home. In August 1991, a group of Communist Party officials and army officers tried to stage a coup. They arrested Gorbachev and sent troops into Moscow. In Moscow, Russian president Boris Yeltsin defied the coup leaders from his offices in the Russian Parliament. President Bush telephoned Yeltsin to express U.S. support. The coup soon collapsed and Gorbachev returned to Moscow. All 15 Soviet republics declared their independence from the Soviet Union. In late December 1991, Gorbachev announced the end of the Soviet Union. Most of the former Soviet republics joined in a federation called the Commonwealth of Independent States (CIS). Although member states remained independent, they formed a common economic zone in 1993.

A New World Order


How did the end of the Cold War lead to more global U.S. military conflicts?

After the Cold War, President Bush noted that a “new world order” was emerging. As he told Congress in a speech, “We stand today at a unique and extraordinary moment. . . . Out of these troubled times . . . a new world order . . . can emerge: a new era—freer from the threat of terror, stronger in the pursuit of justice, and more secure in the quest for peace.” The new world order introduced new military challenges around the globe. For example, U.S. troops led Operation Restore Hope, providing humanitarian assistance and famine relief to refugees in Somalia. Western aid had supported that country during the 1980s due to its strategic location near Middle Eastern oil fields, but with the end of the Cold War, its importance—and U.S. aid—had waned.

Tiananmen Square

Despite the collapse of communism elsewhere, China’s Communist leaders were determined to stay in power. China’s government had relaxed controls on the economy, but continued to repress political speech. In April and May 1989, Chinese students and workers held pro-democracy demonstrations at Tiananmen Square in Beijing, China’s capital. In early June, government tanks and soldiers crushed the protests. Many people were killed. Hundreds of pro-democracy activists were arrested and later sentenced to death. Shocked, the United States and several European countries halted arms sales and reduced diplomatic contacts with China. The World Bank suspended loans. Bush resisted harsher sanctions. He thought that trade and diplomacy would change China’s behavior.


In 1978 the United States had agreed to give Panama control over the Panama Canal by the year 2000. Because of the canal’s importance, American officials wanted to make sure Panama’s government was both stable and pro–United States. But by 1989, Panama’s dictator, General Manuel Noriega, was aiding drug traffickers and harassing American military personnel defending the canal. In December 1989, Bush ordered U.S. troops to invade Panama. The troops seized Noriega, who was sent to the United States to stand trial on drug charges. The troops then helped the Panamanians hold elections and organize a new government.

The Persian Gulf War

President Bush faced perhaps his most serious crisis in the Middle East. In August 1990, Iraqi dictator Saddam Hussein sent his army to invade oil-rich Kuwait. U.S. officials feared that the invasion might be only the first step and that Iraq’s ultimate goal was to capture Saudi Arabia and its vast oil reserves. President Bush persuaded other United Nations member countries from Europe, the Middle East, and Canada to join a coalition to stop Iraq. The United Nations set a deadline for Iraqi withdrawal from Kuwait, after which the coalition would use force to remove them. Congress voted to authorize the use of force if Iraq did not withdraw.

On October 31, 1990, General Colin Powell, chairman of the Joint Chiefs of Staff, Secretary of Defense Dick Cheney, and other high-ranking officials met with President Bush. It was clear that Iraq would not obey the UN deadline. Powell presented the plan for attacking Iraq. “Mr. President,” Powell began, “[w]e’ve gotta take the initiative out of the enemy’s hands if we’re going to go to war.” Cheney later recalled that Bush “never hesitated.” He looked up from the plans and simply said, “Do it.”

On January 16, 1991, coalition forces launched Operation Desert Storm. Cruise missiles and laser-guided bombs fell on Iraq, destroying its air defenses, bridges, artillery, and other military targets. After about six weeks, the coalition launched a massive ground attack. Thousands of Iraqi soldiers died. Fewer than 300 coalition troops were killed. Just 100 hours after the ground war began, Bush declared Kuwait to be liberated. Iraq accepted the cease-fire terms, and American troops returned home to cheering crowds.

Domestic Challenges


Why did President George H. W. Bush lose his bid for reelection in 1992?

President Bush spent much of his time dealing with foreign policy, but he could not ignore domestic issues. He inherited a growing deficit and a slowing economy. With the Persian Gulf crisis, the economy plunged into a recession and unemployment rose.

The Economy Slows

The recession that began in 1990 was partly caused by the end of the Cold War. As the Soviet threat faded, the nation cut back on military spending. Soldiers and defense industry workers were laid off. Other companies also began downsizing, or laying off workers to become more efficient. The nation’s high level of debt made the recession worse.

The huge deficit forced the government to borrow money to pay for its programs, keeping money from being available to businesses. The government also had to pay interest on its debt, using money that might otherwise have helped fund programs or boost the economy.

As you listen to the language spoken in the classroom to explain the end of the Cold War and the problems of the 1990s, make a list of the words you do not know. Use a dictionary to look them up after the lesson. Write down what the words mean to make sure you remember them.

Many savings and loan institutions had collapsed, making the deficit worse. After President Reagan allowed them to be deregulated, many had made risky or even dishonest investments. When these investments failed, depositors collected from federal programs that insured deposits. The cost to the public may have reached $500 billion.

Gridlock in the Government

President Bush tried to improve the economy. He called for a cut in the capital gains tax—the tax paid by businesses and investors when they sell stocks or real estate for a profit. Bush believed that the tax cut would encourage businesses to expand. Calling the idea a tax break for the rich, Democrats in Congress defeated it.

Aware that the growing federal deficit was hurting the economy, Bush broke his “no new taxes” campaign pledge. After meeting with congressional leaders, he agreed to a tax increase in exchange for cuts in spending. This decision turned many voters against Bush.

The 1992 Election

Although the recession had hurt his popularity, Bush won the Republican nomination. Bush promised to address voters’ economic concerns. He blamed congressional Democrats for the government’s gridlock.

The Democrats nominated Arkansas governor William Jefferson Clinton, despite stories that questioned his character and his evasion of military service. Calling himself a “New Democrat,” Clinton promised to cut middle-class taxes, reduce government spending, and reform the nation’s health care and welfare programs. His campaign repeatedly blamed Bush for the recession.

An independent candidate, billionaire Texas businessman H. Ross Perot, also made a strong challenge. He stressed the need to end deficit spending. His no-nonsense style appealed to many Americans, and a grassroots movement—groups of people organizing at the local level—put Perot on the ballot in all 50 states.

Clinton won the election with 43 percent of the popular vote and 370 electoral votes. Bush won 37 percent of the popular vote, and Perot 19 percent. The Democrats also retained control of Congress.

The 46-year-old Clinton was the first person from the baby boomer generation to occupy the White House. It was his task to revive the economy and guide the United States in a rapidly changing world.

Reviewing Vocabulary

TEKS: 2D, 11A

TEKS: 2D, 11A


Using Your Notes

TEKS: 2D, 11A

Answering the Guiding Questions


TEKS: 2D, 11A


Writing Activity