The Domestic Mission

Section Summary

When George W. Bush took office in January 2001, he was committed to a Republican agenda. He cut tax rates for the rich and tried to limit the role of government in people’s lives, in part by providing students with vouchers to attend charter and private schools, and encouraging religious organizations to provide social services instead of the government. While his tax cuts pushed the United States into a chronically large federal deficit, many of his supply-side economic reforms stalled during his second term. In 2005, Hurricane Katrina underscored the limited capacities of the federal government under Bush to assure homeland security. In combination with increasing discontent over the Iraq War, these events handed Democrats a majority in both houses in 2006. Largely as a result of a deregulated bond market and dubious innovations in home mortgages, the nation reached the pinnacle of a real estate boom in 2007. The threatened collapse of the nations’ banks and investment houses required the administration to extend aid to the financial sector. Many resented this bailout of the rich, as ordinary citizens lost jobs and homes in the Great Recession of 2008.