George H. W. Bush: Address to Congress on the Persian Gulf Crisis

Context

Iraq's invasion of Kuwait on August 2, 1990, brought about a major international crisis. The invasion came as a surprise to most world leaders. Saddam Hussein, the president of Iraq, ordered military action for several reasons. Iraq had severe financial problems because of a long, costly war that it had fought with Iran from 1980 to 1988. Although Iraq was a major oil producer, falling petroleum prices in the late 1980s undermined Iraqi efforts to pay off its war debts. Although many oil-producing nations agreed to limit production to increase prices, Kuwait refused to do so. Finally, there had been border disputes ever since Kuwait achieved its independence from Great Britain in 1961. Hussein maintained that Kuwaiti territory that contained rich oil deposits really belonged to Iraq.

The United States had provided aid to Iraq during its war with Iran. U.S. officials were keenly aware that Hussein, who had become president in 1979, had started the war and commonly treated Iraqi citizens with brutality. But in the aftermath of the Iran hostage crisis of 1979 to 1981, when fifty-two Americans were held captive for 444 days after Iranian students seized the U.S. embassy in Tehran, any enemy of Iran had a common interest with the United States. The Bush administration continued to provide agricultural credits to Iraq. The president later explained that U.S. policy was to “work with Saddam Hussein and … bring him along into the family of nations” (Parmet, p. 446).

Once Iraqi forces invaded, however, Bush was outraged. He denounced the move into Kuwait as a violation of international law, and he quickly telephoned other world leaders to enlist their support. Concerned that Iraqi troops might move next into Saudi Arabia, one of the world's largest oil producers, Bush urged King Fahd to allow U.S. troops to help defend his country. On August 8, Bush spoke to the American people on national television and announced the beginning of Operation Desert Shield, the dispatch of U.S. forces to deter an attack against Saudi Arabia. Yet even before he made that announcement, the president said that U.S. objectives in the Persian Gulf went beyond preventing another Iraqi invasion. On August 5 he told reporters, “This will not stand, this aggression against Kuwait” (Parmet, p. 458). The next day, the United Nations Security Council approved economic sanctions to force Iraq to withdraw from Kuwait. Bush said he would give sanctions time to work, but in case they did not, U.S. military leaders made plans for war in the Persian Gulf.

The president also faced major economic problems as he dealt with this international crisis. During the 1980s the federal budget deficit had grown to record levels. Congress passed legislation in 1985, modified two years later, known as the Gramm-Rudman-Hollings Act, which set annual targets for the deficit in an effort to reduce it over several years. If the deficit exceeded the target, an automatic cut, known as a “sequester,” would occur in most government programs.

In early 1990 the projected deficit for the fiscal year, which would begin on October 1, was greater than the annual target. The president quietly met with congressional leaders about reducing the deficit. Democrats controlled both houses of Congress, and their leaders asked the president if he would be willing to consider tax increases as part of the solution to the deficit problem. Less than two years earlier, when he accepted the Republican nomination for president, Bush had pledged that he would not yield to pressure, no matter how great, to raise taxes. He said his response would be “Read my lips: no new taxes” (Greene, p. 37). Yet Bush knew that it would be all but impossible to control the deficit without raising taxes. The economy was slowing in 1990 and heading toward recession.

In addition, severe problems with financial institutions called savings and loans (S&Ls) added to the federal deficit. Because of changes in government regulations in the 1980s, S&Ls had more freedom to make investments to earn money for their depositors. When many of those investments went bad and the S&Ls, in large numbers, went bankrupt, the federal government was left with a huge bill, about $150 billion, to reimburse depositors who had lost their savings. When the White House announced that budget negotiations were taking place without preconditions—that is, the president had not ruled out a tax increase—there was a storm of criticism that Bush had violated a promise to the American people. Bush continued to meet with congressional negotiators, but their talks made no progress. “I must say I hate dealing with Congress and these budget matters,” the president wrote in his diary. “I much prefer foreign affairs” (Parmet, p. 430).