Historic Documents of 1998

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Edited by: CQ Press

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    Preface

    For almost all of 1998, Americans were inundated with news about a sex-and-lies scandal that led to the impeachment of President Bill Clinton. The rest of the world was more concerned about a flood of economic news—most of it bad—stemming from the financial crisis that had gripped much of Asia beginning the year before. These two matters had little direct influence on one another, except to the extent that Washington's focus on scandal distracted the attention of politicians and policymakers from a worldwide economic downturn that had the potential to reach the United States.

    The worst American political scandal in a generation began in January with allegations that President Clinton had lied under oath to cover up his extramarital affair with Monica S. Lewinsky, a former White House intern who was only a few years older than Clinton's daughter. In December the House of Representatives impeached Clinton in nearly straight party-line votes, charging him with four counts of perjury and obstruction of justice. In the intervening months, the American public watched in a mixture of fascination and revulsion as intimate and graphic details of the president's personal life were made public. They were also subjected to the wrenching experience of hearing the leader of the world's most powerful nation admit that he had deliberately misled his family, his aides, and the American people. Throughout his ordeal, however, Clinton maintained that he had not committed perjury or obstructed justice.

    The Senate was not expected to convict Clinton when it took up the impeachment early in 1999. Clinton's job ratings remained high throughout the year, and the Republicans were unlikely to muster the two-thirds majority vote needed for conviction. But the events leading up to the impeachment had already taken a toll. Clinton's place in history would forever be marred by his becoming only the second American president to be impeached. The impeachment debate itself had heightened the mistrust between the two political parties to its highest point in decades, and the American people grew even more cynical about their elected representatives in Washington.

    Ironically, the Republicans who pursued impeachment sustained more immediate political damage than did Clinton. Despite clear signals that the majority of Americans did not want Clinton impeached, House leaders could not resist the opportunity to go after the man many considered their political nemesis. The price was high: a loss of five House seats in the November elections and the resignation of two top House leaders, Speaker Newt Gingrich of Georgia and his designated successor, Rep. Robert S. Livingston, R-La.

    Aside from further souring the American public on Washington politics and creating endless opportunities for racy coverage in the news media, the partisan bickering over the Lewinsky scandal seemed to have little impact on the nation as a whole. The American economy continued to produce its best performance in a generation with high rates of job creation, low rates of unemployment, and no sign of inflation on the horizon.

    The nation's growth enabled the federal government to claim in October that the budget for the 1998 fiscal year had shown a surplus for the first time in nearly thirty years. That claim was somewhat exaggerated—deficit in government's actual operating budget was masked by a large surplus in the Social Security program. Even so, the news was encouraging because the trend was away from deficit spending, and it dramatically altered the shape of the debate in Washington on budget issues. For nearly a generation, Republicans and Democrats had argued over what to do about recurring deficits; starting in 1998 leaders of the two parties began disputing what to do with multibillion-dollar surpluses that were expected in the succeeding years. Clinton was the first to seize the high ground. In his State of the Union speech he offered a simple phrase—"save Social Security first"—that undercut plans by Republicans to use most of the budget surplus to pay for tax cuts. From that moment forward, politicians in Washington competed for ways to claim credit for ensuring that the Social Security system would remain solvent in the second and third decades of the twenty-first century, when the tens of millions of Americans in the post-World War II "baby boom" generation would reach retirement age.

    A variety of reports issued during the year by government and private agencies painted a picture of a nation in transition at the close of the twentieth century. The 1996 welfare reform law—coupled with continued economic growth—appeared to be sharply reducing the nation's welfare rolls. At the same time, the Department of Housing and Urban Development reported that economic prosperity was still eluding many of the nation's cities. Nearly all the growth in employment during the 1990s was taking place in suburban areas ringing the cities, leaving inner-city residents with the choice of taking low-pay service jobs or trying to commute to the suburbs.

    Americans did not have much company when it came to celebrating good economic news during 1998. Most other countries were either still struggling to escape the worldwide recession that had peaked at the beginning of the 1990s, or they were suffering the "contagion" effect from the Asian financial crisis. The Asian crisis was to have a much broader impact than anyone envisioned in the months after July 1997, when the collapse of the currency in Thailand set off financial turbulence throughout Asia. By the beginning of 1998, the Japanese economy—the world's second largest, after the United States—had fallen into a deep recession. Most other east Asian nations already had fallen into recession during late 1997 or were experiencing sharply reduced growth.

    Countries where democracy had taken root, including the Philippines, South Korea, and Thailand, managed to weather the economic turbulence with little social unrest. But the economic crisis demonstrated the fragility of one of the world's longest-reigning dictatorships. President Suharto, who had ruled Indonesia with an iron hand since 1967, was toppled from power with amazing ease in May following a series of mass demonstrations by university students. The Indonesian economy was the hardest hit in Asia; according to one estimate by the World Bank, nearly 75 percent of the nation's businesses went bankrupt during the year, throwing millions of people out of work. The impact of the overall Asian financial crisis was worsened by a severe drought. The International Monetary Fund (IMF) offered Indonesia a $40 billion rescue package but imposed tough conditions, including the dismantling of monopolies controlled by Suharto and his family members.

    Japan, with a much stronger economy and a more open political system than Indonesia, nevertheless suffered an economic downturn that severely undermined national confidence. The Japanese economy had been sluggish ever since the worldwide recession at the beginning of the decade, and by early 1998 that sluggishness had turned into a full-scale recession. As happened elsewhere in Asia, the plunge exposed inherent weaknesses in the Japanese economic system, most importantly the government's failure to monitor lending by Japanese banks. By late 1998 most experts estimated that Japanese banks were holding upwards of $1 trillion worth of bad loans. The government of Prime Minister Ryutaro Hashimoto offered several economic rescue plans in 1997 and early 1998, none of which had any dramatic impact. Voters in parliamentary elections in July rebuffed Hashimoto's Liberal Democratic Party, forcing the prime minister from office. Party leaders selected Foreign Minister Keizo Obuchi as Hashimoto's successor, despite Obuchi's lack of experience in economic matters. Obuchi put forward a modest economic stimulus plan in August and then a more substantial plan in November, including proposals to help banks deal with their bad loans. By year's end the IMF was estimating that the Japanese economy would come close to reaching positive growth in 1999.

    Another major victim of the Asian financial crisis was Russia, which in 1998 was still trying to overcome economic and political instability resulting from its transition from communism. After a few heady years of Wild West-style capitalism in the mid-1990s, Russia by 1998 was faced with the reality of dealing with its communist legacy, including antiquated factories, unskilled workers, and a lack of political consensus about the nation's direction. American and European investors, who had poured billions of dollars into speculative schemes in Russia, began pulling back in 1998, partly in response to the Asian economic crisis and partly in response to continuing uncertainty in Russia. President Boris Yeltsin in March dramatically fired his longtime prime minister, Viktor S. Chernomyrdin, and replaced him with a team pledged to radical economic reform. But the nation's economic slide continued despite a pledge of $17 billion in aid from the IMF. In mid-August the Russian government took steps that had the effect of devaluing the ruble and defaulting on short-term loans. That action set off panic alarms all over the world and caused a sudden drop in financial markets, including Wall Street. Yeltsin tried to bring Chernomyrdin back as prime minister, but was blocked by parliament. In September he finally succeeded in getting parliament to approve foreign minister Yevgeny M. Primakov as prime minister. Primakov cobbled together a budget and won approval for it in parliament but was unable to develop a coherent long-term plan for the nation's economic future. By the end of the year Russia was forced into the humiliating position of appealing to the United States and European governments for food aid.

    China, which was also making a transition from a purely communist system to a melding of communism and capitalism, escaped the worst of the year's economic turmoil. The country's economic growth rate, which had been averaging nearly 10 percent a year for more than a decade, fell to about 7 percent for 1998—still a remarkable performance given the economic free fall in the rest of Asia. But the Chinese communist leaders faced the most intense international scrutiny of their leadership in years. Visiting China in June, President Clinton offered some words of praise for the leaders in Beijing but lectured them on the virtues of democracy. Weeks after Clinton's visit, the government launched a sustained crackdown, imprisoning several dissidents who were trying to form an opposition party.

    Another abrupt reminder of the limits of American influence came August 7, when nearly simultaneous bomb explosions destroyed the U.S. embassy buildings in Nairobi, Kenya, and Dar es Salaam, Tanzania. The bombings killed more than 250 people, including twelve Americans, and wounded several thousand others, most of them civilians in Nairobi. The Clinton administration quickly identified a terrorist group headed by exiled Saudi millionaire Usama bin Laden as responsible for the bombings. On August 20 U.S. warplanes and cruise missiles attacked remote camps in Afghanistan, where bin Laden was said to have his headquarters, and a chemical factory in the Sudan, which U.S. officials said had manufactured chemical weapons for the use of terrorists. Bin Laden survived the attack in Afghanistan, but U.S. officials hoped the massive response to the bombings would convince Afghanistan to expel him.

    In December U.S. military power was called into play once again in the Middle East—this time in a place familiar to Pentagon planners: Iraq. After it lost the Persian Gulf War in 1991, Iraq was ordered by the United Nations Security Council to hand over to a UN commission all of its ballistic missiles and chemical, biological, and nuclear weapons. During its eight years of work, the UN commission managed to locate and destroy many of Iraq's weapons of mass destruction—but the Iraqi government never provided a full accounting of the vast arsenal of chemical and biological weapons it had accumulated before the Gulf War. After a series of moves by Iraq to frustrate its work, the commission suspended its operations on December 15 and reported to the Security Council that Iraq had failed to cooperate. The next day, the United States and Great Britain launched air attacks on military targets in Iraq. In a televised speech from the White House, Clinton said he had ordered the attacks because Iraqi leader Saddam Hussein was continuing to pose a military threat to other Middle East nations. The military action came just one day before the House of Representatives was scheduled to begin debating articles of impeachment against Clinton—causing some Republican leaders to charge that Clinton was using U.S. military power to stall the impeachment. Most of the Republicans later backed down on that charge, but their willingness to make it demonstrated the climate of mistrust in Washington.

    A scourge that military power could not hope to overcome was the seemingly relentless advance of the AIDS epidemic throughout much of the world. According to UN estimates, the number of people with HIV, the virus that caused the incurable disease, rose 10 percent in 1998, to 33.4 million. In parts of sub-Saharan Africa, one of every four adults had either HIV or AIDS; in nine African countries, life expectancy, which had been rising, was now expected to fall over the next ten to fifteen years. Although the disease was worst in Africa and Southeast Asia, health workers were finding evidence of it spreading through previously little-touched countries, including China, India, and several Eastern European countries. In the United States, deaths from AIDS continued to decline significantly, but the rate of new HIV infections held steady, at about 40,000 a year.

    Not all news was doom and gloom during the year. Millions of Americans watched for weeks on end as two baseball players—Mark McGwire of the St. Louis Cardinals and Sammy Sosa of the Chicago Cubs—battled each other for the honor of breaking one of the most important records in American sports: Roger Maris's total of sixty-one home runs in a single season (1961). In the end, both McGwire and Sosa broke the record, but McGwire won the overall title with seventy home runs, a figure that had seemed inconceivable before the 1998 season.

    Americans enjoyed a bit of nostalgia in October when John Glenn returned to space. In 1962 Glenn had been the first American astronaut to circle the globe; his journey in space had helped restore the confidence of Americans who were worried at that time about the cold war and the Soviet Union's lead in the space race. Glenn later served three terms as a senator from Ohio, but he always wanted another trip in space. His chance came when he persuaded the National Aeronautics and Space Administration (NASA) to take him as a crew member on the shuttle Discovery for experiments on how weightlessness in space affected the aging process. Glenn and six other astronauts spent nine days in space in late October and early November. The results of the experiments on the seventy-seven-year-old Glenn had not been made public by the end of the year, but the mission reignited public interest in manned space ventures and was an enormous public relations success for NASA.

    These are only some of the topics of national and international interest chosen by the editors for Historic Documents of 1998. This edition marks the twenty-seventh volume of a Congressional Quarterly project that began with Historic Documents of 1972. The purpose of the series is to give students, librarians, journalists, scholars, and others convenient access to documents on a wide range of topics that set forth some of the most important issues of the year. In our judgment, the official statements, news conferences, speeches, special studies, and court decisions presented here will be of lasting interest.

    Each document is preceded by an introduction that provides context and background material and, when relevant, an account of continuing developments during the year. We believe these introductions will become increasingly useful as memories of current times fade.

    John Felton and Martha Gottron

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