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Mr. President, Mr. Speaker,
my fellow Americans.

Again, we are here
in the sanctuary of democracy,

and once again,
our democracy has spoken.

On January 24, 1995,
President Bill Clinton

addressed Congress
and the American people.

Two years into his presidency,
and just months after suffering

the worst midterm election
defeat in modern history,

he was chastened and humble.

And now all of us,
Republicans and Democrats alike,

must say, "We hear you.

We will work together to earn
the jobs you have given us."

After the midterms,
the president, I think, felt

that he was almost a hostage
in his own White House.

He was unhappy
with the White House staff,

he was unhappy
with the policy direction,

and so he actually began
a very quiet operation

to begin to change
his administration.

Beginning in early 1995,

White House staffers
began to notice

a change in the president.

His speeches contained

unfamiliar language
and cadences.

In meetings, he'd get up
abruptly and leave the room.

Many aides felt he was
no longer listening to them.

I recall a meeting

that the president's economic
advisors

and political advisors
were having

about how he was going
to spend the next three weeks,

what themes he was going
to emphasize.

And I remember somebody
from the back of the room,

I think it was Erskine Bowles,

then the president's
chief of staff,

saying,
"This is all irrelevant."

Irrelevant?

We're the staff.

We are the people
who help the president.

Why are we irrelevant?

And he didn't exactly say.

He said there was some other
force in the White House.

And again and again
there seemed to be instances...

It was almost like in astronomy,

there's a black hole
and you can only tell it's there

because planets begin moving
into its gravitational orbit.

But you look
and there's nothing there.

That was Dick Morris.

Dick Morris was the black hole.

Dick Morris,

an abrasive political consultant
from New York,

had a history with the Clintons

that went all the way back
to Arkansas.

Other than Hillary Clinton,

he was the most important
political advisor

that Bill Clinton had had
over the course of his career.

He was there for the very first
election to governor in 1978

and had been with Bill Clinton

for most of the Arkansas
gubernatorial years.

Morris set up shop
in the White House

and began to chair
weekly strategy meetings

that were attended by most of
the president's senior staff.

Clinton typically dominates

any group or discussion
that he's in.

In the meetings on the second
floor of the residence,

which we had every week,

Clinton would literally
sit there for an hour sometimes,

hardly saying a word,
listening to Morris.

When I first started to work for
Clinton in the White House,

he had two big negatives:

a third of the country
thought he was immoral

and a third of the country
thought he was weak,

and I basically went to him
and I said,

"I can't do much
about the immoral,

but we sure can solve the weak."

And therefore we embarked
on a conscious strategy

of making sure people
saw Clinton as strong.

The heart of Morris's operation
was his polling,

which he used to diagnose
where Clinton's weaknesses lay

and how he could correct them.

Polling became
absolutely central.

How do we present ourselves as
an alternative to Newt Gingrich?

How are people
seeing the president?

What sort of policies
would make them feel better

about Bill Clinton?

They polled everything.

They polled every last word
that came out of his mouth.

They polled where he should go
on vacation.

Instead of going
to Martha's Vineyard,

that elite island
off the coast of Massachusetts,

they had him riding a horse
in Wyoming.

I think Bill Clinton's allergic
to horses.

But that's what the focus group
said would be

a more acceptable vacation.

One of the big problems

was the relationship
between Bill and Hillary.

Voters thought that it was
a zero-sum game,

that for Hillary to be strong,
Bill would have to be weak.

And, as a result, the perception
of Hillary's strength

became a perception
of Bill's weakness.

The polling made me
understand that,

and when I came back
to work for Clinton,

one of the first things I did
was to tell Hillary,

"You can be as influential
as you want to be,

"but do it in private.

"Don't sit in on the strategy
meetings,

"don't make the appointments,

"don't make everybody
be cleared with you.

"At the bedroom at night,
tell him what to do,

but don't let it be seen
in public."

Morris's advice hit home.

After the stunning defeat
in the midterm elections,

Hillary had received
a large share of the blame.

She was outspoken, she was
smart, she was hard-driving,

and some people resented her.

Remember, during the campaign,

there was two
for the price of one.

Well, people aren't electing
two for the price of one.

They're electing the president.

She had been caught out
trying to be a co-president.

That just wasn't gonna fly,

and that's when she really had
to begin to really reexamine,

again as she did
as governor's wife,

"What does the public
want from me in this role?"

And to take on gradually

a little bit more of the
traditional role of first lady.

Well, welcome to the White House

and to the beginning
of the Christmas season here.

Unsatisfied by her ceremonial
role as first lady,

Hillary began working on issues
important to her,

but not alarming to the public.

She began writing
a book about children

and traveled abroad with Chelsea
to advocate for women's rights.

She wrote a weekly
syndicated column,

and even consulted a psychic
in the White House.

But it wasn't enough.

She felt, for one of the rare
times in her life,

completely depressed.

She said everything that she was
doing wasn't working.

She just didn't know
what to do anymore,

because she really wanted
to be in there

right at Bill Clinton's side,

fighting all the political
battles that he was doing.

The president wants to defend
Washington bureaucracy,

Washington red tape
and Washington spending,

and higher taxes to pay
for less out of Washington.

While the Clintons struggled
to find their way back

from the political wilderness,

their rival, Republican Speaker
of the House Newt Gingrich,

was dominating politics
in Washington.

I think Newt felt like
he had led

a great revolution
and led the House...

And the Senate that for matter...
To victory,

and that he could...
we could be the, you know,

the driving force in this city,
and that he was, in effect,

comparable or equal
to the president.

Gingrich and his
newly elected army

of Republican representatives
quickly passed bill after bill

from their
"Contract with America."

Sensing his strength, Gingrich
was intent on drawing Clinton

into a political showdown

that would determine, once and
for all, who was in charge.

In the spring of 1995, Gingrich
picked his battleground.

I think the central issue

that we challenged
the Clinton administration on

was on the budget.

We wanted to balance the budget.

We thought that was the most
important domestic policy issue

that existed in the country,

and it was gonna be ugly, as all
deficit fights inevitably are.

What you currently have is

a system designed to be
a centralized bureaucracy.

In May, Gingrich unveiled a plan

to eliminate the federal budget
deficit in seven years

through huge cuts
in government spending.

Most of the cuts
would be concentrated

in two government
health insurance programs:

Medicare and Medicaid.

Gingrich had managed

to shift the focus of power
and media attention

from Clinton to himself.

With Gingrich in the spotlight,

Clinton seemed
increasingly peripheral.

April 18, 1995.

Bill Clinton gives
a press conference,

and we're all over him
about his lack of power.

Newt's running the town!

Newt's in control!

Yes, Jean.

President Clinton,

Republicans have dominated
political debate in this country

since they took over Congress
in January,

and even tonight, two of the
major television networks

declined to broadcast
this event live.

Do you worry about making sure
your voice is heard

in the coming months?

Clinton is forced to say

that the president
is still relevant here.

The Constitution
gives me relevance,

the power of our ideas
gives me relevance,

the record we have built up
over the last two years

and the things we are trying
to do to implement it

give it relevance.

The president is relevant here.

It was awful.

You know, "The president
is still relevant."

Just the fact that he felt
compelled to say those words

says everything.

I am willing to work
with the Republicans.

The question is,
what happens now?

About a third of the building
has been blown away.

The next day, on April 19, the
bomb went off at Oklahoma City.

It was the largest
domestic terrorist event

in American history.

That changed everything.

The bombing in Oklahoma City was
an attack on innocent children

and defenseless citizens.

It was an act of cowardice
and it was evil.

The United States
will not tolerate it,

and I will not allow
the people of this country

to be intimidated
by evil cowards.

Within 48 hours of the incident,

the FBI arrested 26-year-old
Timothy McVeigh,

a former soldier with a burning
hatred for the government.

His massive truck bomb,

detonated outside
the Murrah Federal Building,

killed 149 workers,
along with 19 children.

Four days after the bombing,

Clinton traveled to Oklahoma
City to console the mourners.

I went with him

down to Oklahoma City
for that Sunday morning.

On the flight, we worked
on the speech some more.

He was very focused
on what to say.

I remember we went into what I
think they call the Cow Palace,

and I've never been in a setting

that was as eerily silent
as that one was

except for the sound of sobbing.

ROBERT McNEELY:
He stood there for hours

and met with every single person
and talked to everybody.

It's kind of a throwaway line
now, "I feel your pain,"

but he literally could.

I mean he could take people
and just hug them

and connect to them in a way
and really listen to them.

You have lost too much,

but you have not lost
everything.

And you have certainly
not lost America,

for we will stand with you.

He really found a way
to embrace the country

to help them channel
their grief, their confusion.

It gets him out of the mode
of reacting to Congress

and into the mode of being
a national leader,

the person that the country
can look to for assurance

and reliance and strength.

To all my fellow Americans
beyond this hall, I say,

one thing we owe those
who have sacrificed

is the duty to purge ourselves

of the dark forces which gave
rise to this evil.

He spoke to the country as
a unifying, a healing figure.

But, very subtly
and appropriately,

he also drew attention
to the fact that

the rhetoric Timothy McVeigh was
using was not all that different

from the rhetoric that the talk
show hosts and the militias

and even some of the members
of Congress were using.

Let us teach our children
that the God of comfort

is also the God
of righteousness.

Those who trouble their own
house will inherit the wind.

Here was a president
who had been, by many people,

deemed not to be strong,

who suddenly was being viewed
as both sensitive and strong,

which was a great
and very powerful combination.

At that moment,
perhaps for the first moment,

he inhabited the presidency.

Bill Clinton had begun
to find his voice at home,

but he commanded little respect
on the international stage.

For two years, Clinton had
stumbled through a series

of foreign policy mishaps.

An ill-considered action
in Somalia

had cost the lives
of 18 U.S. soldiers

and deterred the president

from asserting American military
power around the world.

Without strong U.S. leadership,

the world's problems were
reaching a critical state.

In Central Europe,

Bosnian Serbs
had begun wiping out

the largely Muslim population
in their own country.

In 1995, the massacres in Bosnia
were in full swing.

Daily rivers of blood.

Really, it was appalling.

After two years
of this kind of savagery,

Bill Clinton had a disaster
on his hands.

This was genocide in Europe.

Since becoming president,

Clinton had deferred
to European countries

with soldiers in Bosnia

as part of the United Nations
peacekeeping operation.

One has to understand

that when you are in
a peacekeeping operation,

which is an international
effort,

one president cannot
call the shots.

One president cannot
take the decision.

Particularly when
the president's country

has no troops on the ground.

Clinton's reluctance to send
American soldiers to Bosnia

collided with growing calls
for U.S. intervention.

Mr. President, I cannot
not tell you something.

I have been in the former
Yugoslavia.

We must do something to stop
the bloodshed in that country.

The ongoing scenes of this
horrific genocidal slaughter

going on by the Serbs
against the Muslims

was just undermining Clinton's
image day after day.

Clinton would complain,

"The media's trying to force me
into a war and I don't want it.

I'm not going to go
into my own Vietnam."

And every night, these images
came on the screen.

The violence in Bosnia reached
a climax in the summer of 1995.

A new set of European leaders
implored Clinton to act.

"The position of leader
of the free world,"

complained French president
Jacques Chirac, "is vacant."

Privately, Clinton had begun
to rethink his policy.

Haunted by his failure

to stop a genocide in Rwanda
the previous year,

he could no longer
stand idly by.

Finally the president
set up a trip wire

where if the Bosnian Serbs
attacked,

it would trigger a massive
NATO military response.

On July 11, 1995,

Bosnian Serb soldiers overran
the city of Srebrenica

and murdered more than 8,000
defenseless men and boys.

That was a real shock

for everyone.

And for that to happen
in Europe,

many decades after World War II,

was something that nobody
could sit back and swallow.

For Clinton, the wire
had been tripped.

On August 30, fighter planes
from NATO bases across Europe,

acting on the president's
go-ahead,

launched a massive attack
against Serbs in Bosnia called

"Operation Deliberate
Force."

He didn't blink.

And there wasn't tension on him,
there wasn't pressure on him,

he wasn't sweating
and worrying about,

"Did I do the right thing?"

We knew then, we knew that day,

that we had a commander-in-chief

who was rational and comfortable
with the use of force.

For the next two weeks,
NATO pilots flew 3,500 sorties,

as millions around the world

watched the air war
unfold on television.

The NATO action began
early this morning,

the harsh light of fires
and explosions

coloring the night sky.

Some people watched the
bombardment from their houses,

but after more than
10,000 deaths here

in the last three years,

most Sarajevans
had given up any hope

of outside intervention.

Last night it came on a scale

which could yet change
the course of this war.

On September 14, Serbian guns
ringing Sarajevo fell silent.

Two months later,

Clinton convened the warring
parties in Dayton, Ohio,

to negotiate an end
to hostilities.

The parties have agreed
to put down their arms

and roll up their sleeves
and work for peace.

Finally, when you got tough and
you said, "Enough already,

"we don't accept genocide at
the end of the 20th century

in our backyard," they got
serious and it stopped.

And then the United States...
Not the Europeans...

Led the Dayton peace process.

And to this day, imperfect
as it may be, it has held.

The Dayton Peace Accords

were a triumph for Clinton's
foreign policy

and restored his standing
as leader of the free world.

The same month,

he visited the troubled country
of Northern Ireland,

where crowds hailed him
as a peacemaker.

The young people...
Catholic and Protestant alike...

Made it clear to me
not only with their words,

but by the expressions on their
faces that they want peace.

After three years as president,

he had developed a new vision
of America's interests abroad.

It would come to be known
as the "Clinton Doctrine."

It's easy to say that we
really have no interests

in who lives in this
or that valley in Bosnia,

or who owns a strip of brush
land in the Horn of Africa,

or some piece of parched
earth by the Jordan River.

But the true measure
of our interests

lies not in how small
or distant these places are,

or in whether we have trouble
pronouncing their names.

The question we must ask is,

what are the consequences
to our security

of letting conflicts
fester and spread?

We cannot, indeed,
we should not,

do everything or be everywhere.

But where our values
and our interests are at stake,

and where we can
make a difference,

we must be prepared to do so.

There was a Clinton Doctrine,

but it wasn't purely
a military doctrine.

It was a national
security doctrine.

President Clinton thought

the United States is
an indispensable nation.

You can't do things
without the United States.

It may not be only
the United States,

and it's certainly not
doing it alone,

but it's the United States
that brings the decisive edge

in being able
to get things done.

And that where you can make
a difference, you should.

In the latest poll I saw,

86% of the American people said,
"Balance the budget now.

Don't wait, don't postpone,
don't give us promises."

Even as Clinton brought peace
to Europe,

the ideological war at home
was heating up.

Speaker Newt Gingrich
was standing by

his balanced budget proposal,
daring the president to veto it.

Once again, Clinton hoped to use
his powers of persuasion

to end the impasse.

He was thinking,

"What I'm gonna do is
I'm gonna capture these guys.

"Because A,
I'm smarter than they are,

"and B, that's my whole life's
learning,

"is how to capture people.

"And I'm gonna do it through
sheer force of personality.

"I can sit down
with Newt Gingrich,

I can sit down with the devil
himself, and I can cut a deal."

Gingrich would not yield
to Clinton's charms.

Unless the president
agreed to huge cuts

in Medicare and Medicaid,

Congress would refuse
to appropriate money

for the federal government,
shutting it down.

The one thing that the House
of Representatives has

is the power of the purse.

They can deny money.

It is the only thing

that the House of
Representatives alone can do,

can refuse to vote
an appropriation.

So, inevitably, whatever
the fight was going to be,

it was going to come down to us
denying the White House money.

Clinton seemed caught between
two toxic political choices.

If he opposed Gingrich's
balanced budget plan,

he would be portrayed

as a defender
of big government deficits;

if he gave in,

he would effectively cede
control of the government

to Gingrich and the Republicans.

But there was a third option.

Dick Morris had been polling

the Republicans'
proposed budget cuts

and believed
he had found an opening.

I did a poll for Clinton

where I tested each
of those cuts and its impact.

And I said to him,

"Do you want
the four-hour briefing

or the one-word briefing?"

And he said start
with the one word.

I said "Medicare."

I said, "None of the other cuts
are nearly as important

as the cut they're proposing
in Medicare."

The public supported a balanced
budget, Morris argued,

but not at the expense of their
most cherished federal program.

I said that what's important

is that you take away
from the Republicans

the balanced budget issue.

If you can show how you can
balance the budget

without cutting Medicare
but by cutting everything else,

then you can call their bluff.

And then all of a sudden it
becomes a question of,

"What do we cut?"
not "Do we cut?"

Morris called his strategy
"triangulation."

Clinton seized on it as a way
to regain the initiative

from the Republicans.

In June, over the strong
objections of liberals

on his staff, he announced his
own balanced budget plan,

protecting Medicare
and Medicaid.

There is an alternative,
a way to balance this budget.

It's not that we shouldn't
balance the budget.

We should balance the budget.

I strongly support it;
we ought to do that.

I believe we're going
to do that.

But we don't have to do it
in a draconian way

that hurts the American people.

You know, whether or not
to balance the budget,

we can't win that fight.

We're going to lose.

Once you accept that we're going
to balance the budget,

now let's have a fight about
what we're going to cut

and what we're going to protect.

That's a fight we can win.

Are you going
to protect Medicare?

Are you going to protect
Social Security?

You want to shut down
the government over that?

Let's go.

In mid-November,

with the issue of Medicare cuts
still dividing the two sides,

the federal government ran out
of money and shut down.

Nearly a million
federal employees

were instantly furloughed;
government offices closed;

all but the most essential
services ground to a halt.

The Washington Passport Agency
is closed for lack of funding.

Due to the shutdown of
the federal government...

Social Security...
Library of Congress...

the National Park Service...
is closed indefinitely.

If it ends soon,

the shutdown will have been
a temporary inconvenience.

But if prolonged, it could cost
the country a lot of anguish

and many millions of dollars.

Clinton took a gamble,

the biggest gamble of his
presidency to that point,

in saying, "No, I'm going
to let the government shut down

rather than accept the cuts
that you're proposing here."

Day three and nobody moves,

least of all the 800,000 federal
workers forced to stay home.

The American people should not
be held hostage anymore

to the Republican
budget priorities.

Work, work, put the government
back to work.

Through a first shutdown
in November

and then a longer one
in December,

neither Clinton nor Gingrich
blinked.

It was high-stakes poker.

Whichever side was blamed
for the shutdown

would probably lose
the next presidential election.

Our conviction was,

ultimately, a president is held
responsible for his government.

And that if we didn't blink, at
some point the public would say,

"The president needs to get
this government functioning."

The pressure on the president
was enormous.

Every day, the political
damage mounted.

Almost a billion dollars
in lost wages,

new Medicare and Social Security
claims going unprocessed;

the federal government
unable to discharge

even its most basic functions.

And the confrontation played out
on television every night.

Day 13 of the federal
budget crisis

and the shutdown that's brought
parts of the government

to a dead stop.

The major players were all
assembled in Washington today,

and they were talking,
but not to each other.

Now, one of the major problems
we have in America

is we have a president
who doesn't mind playing,

he doesn't mind talking,
but he seems to hate working.

We're working.

This was all sui generis,
this was completely new.

Nobody knew the temperament
of the country,

how it was going to play out.

And it was literally hour
by hour, certainly day by day.

There was a fear
by many Democrats,

even some within the
White House, who just thought,

"You know, he's not going
to be able to say 'no' to them.

"He wants to get along
with them.

He thinks that's the way
to save his presidency."

With the government closed,

Clinton prowled the empty halls
of the White House,

deprived of the human contact
he craved.

Among the few people
permitted to come to work

were the White House interns,

including a 22-year-old
named Monica Lewinsky.

The daughter of a Beverly Hills
doctor and his socialite wife,

Lewinsky was a graduate

of Oregon's
Lewis & Clark College.

She had an air of confidence,
even boldness,

that set her apart
from her fellow interns.

On November 15, the second day
of the shutdown,

Clinton and Lewinsky
struck up a conversation

in which Lewinsky confessed,
"I have a huge crush on you."

There were almost these sparks
flying between them

from that first moment
when they saw each other,

and as Monica said, "He gave me
the full Bill Clinton

and undressed me
with his eyes."

Hours later, the two had
their first sexual encounter.

It's almost as though there was
a part of Bill Clinton

that he had no control over.

That whenever it had the
opportunity to come out,

it was gonna come out.

And with no forethought,
with no calculation,

with no sense
of the consequences,

it was simply gonna happen.

And that's terrifying.

At this hour,
U.S. president Bill Clinton

is meeting with top
Congressional leaders

in another attempt to resolve
their budget standoff.

As Clinton recklessly pursued
his affair with Lewinsky,

he and Gingrich were locked
in their own high-wire embrace.

The president offered compromise
after compromise,

but Gingrich would not budge.

Unless Clinton agreed to his
formula of budget and tax cuts,

he would keep
the government closed.

They believed that he was soft,
that he could be pushed around,

and that they could have
their way.

They believed that he lacked the
confidence to stand up to them.

They believed they understood
his psychology,

and they thought that they had
the political upper hand.

But Clinton sensed
that his political enemies

had overreached and were out of
step with the American people.

As long as they insist
on plunging ahead

with a budget that violates
our values,

in a process that is
characterized more by pressure

than constitutional practice,
I will fight it.

I am fighting it today,
I will fight it tomorrow.

I will fight it next week
and next month.

I will fight it
until we get a budget

that is fair to all Americans.

There is a moment I will never
forget in the Oval Office.

We had been going through
negotiations on the budget.

And there were some of us
that were nervous

that President Clinton
might go too far,

that he might want to go
so far in compromising

that he might hurt himself
politically.

And so we kept putting
different offers on the table,

and they kept coming back
and saying,

"Not good enough,
not good enough."

And we finally reached a day

where he wanted to do one more
compromise, one more step.

Newt Gingrich said, "No."

And Bill Clinton basically
looked at them and said,

"You know, Newt, I can't do
what you want me to do.

"I don't believe it's right
for the country.

And it may cost me the election,
but I can't do it."

And my first reaction was

he's drawn a line
that he had to draw.

He understood that he would have
to take a risk of not winning,

and winning was what
he was always about.

From that moment, I think,
in many ways,

it became a renewal of Bill
Clinton in terms of who he was,

both within himself
and with the American people.

- We want to work!
- We want to work!

As of last night, the public
appeared to be more sympathetic

to Mr. Clinton's position.

46% blamed the Republicans,
27% Mr. Clinton.

Many traditional Americans,
including some Republicans,

were outraged that
a speaker of the house

would shut down the government.

You know, Newt Gingrich
is not the president.

He shouldn't be acting like
he's the president.

Suddenly, Bill Clinton
became the embodiment

of traditional America.

He's the president
of the United States.

Whether you agree with him
or not,

no one has the right
to shut down the government

when he's the president.

Finally, Senator Bob Dole,

worried that the shutdown would
hurt his presidential campaign,

corralled the necessary votes
in the Senate

to reopen the government.

Clinton had won.

In the weeks that followed,

Clinton staked out a middle
ground between the two parties

with a vision of government that
was neither enemy nor savior.

The era of big government
is over.

But we cannot go back
to the time

when our citizens were left
to fend for themselves.

It was a real change in
his vision of how the presidency

could work.

He had started with this heroic
notion of the presidency...

Passing big laws,
doing grand things...

And then the public
just rejected it.

It hit a brick wall of what the
public thought of government.

And he realized that he had
to change how he was president,

and he had to rebuild that
public trust in government.

Capitalizing on his momentum,

Clinton announced
a stream of initiatives

designed to show middle-class
Americans that he understood,

and could improve, their lives.

After the government shutdown,

we adopted a political strategy
based on one word... values.

And our concept was

that we would help you
raise your child better.

We have worked very hard
to help communities fight crime.

"I'll provide you with drug-free
school zones,

school uniforms, medical
leave for your children."

Reduce teen smoking by raising
the price of cigarettes,

putting into place tough
restrictions on advertising...

I'll give you
all of these weapons

to raise better children.

This is a V-chip,

and it will be required to be
put in all new television sets.

Not even the Republicans
could stand in Clinton's way.

After trying to move
heaven and earth,

big swaths
in his first two years,

he started feeding us up
small pieces of bills.

And he'd get into our knickers
with ideas

that we really
could not vote against:

a hundred thousand cops
on the street.

A Republican gonna vote against
more law enforcement officers?

It was a politics
of the possible,

not the things
he dreamed of doing,

but the things he could do.

He crafted a whole new view
in American politics,

literally a third way,
a moderate way,

and achieved the results
the American people wanted.

Three years into his first term,

Clinton had pulled one of
the greatest Houdini acts

in presidential history.

With approval ratings
on the rise,

he could once again call himself
the Comeback Kid.

But as with nearly every
Bill Clinton comeback,

it was soon followed
by yet another scandal.

Yesterday, a trove of documents
from Mrs. Clinton's old law firm

that various investigators
issued subpoenas for months ago

were suddenly discovered
in the office

of one of the Clintons' aides.

In January 1996, a sheaf
of Hillary's old billing records

was discovered in the private
residence of the White House.

The documents showed
that she had done legal work

for her old friend Jim McDougal

while he was engaged in
fraudulent real estate deals

in Arkansas.

The Whitewater inquiry,

which had receded
from the front pages,

suddenly came roaring back.

There's the issue of why
it took the White House so long

to turn up the billing records.

This is a pattern:
delay, deception, withhold.

The discovery
of the billing records

for Hillary Clinton's work

for Jim McDougal and Madison
Guaranty was explosive.

Everyone had been looking
for those billing records.

There were subpoenas all over
the place to turn those over.

And then all of a sudden,
they just show up.

Our job is to get at the truth

and the truth will speak for
itself, so thank you very much.

The Whitewater inquiry
was now in the hands

of a new independent counsel.

Kenneth Starr had been appointed

by a panel of conservative
judges to replace Robert Fiske.

Starr was a respected jurist

and former official
in the Bush Administration.

At first, his appointment

caused little consternation
in the White House.

The jury was out initially

because Starr had quite
a sterling reputation.

He was well known
in judicial circles.

He was not rabid.

He was considered
a very good conservative,

a very good court of appeals
justice, so people were hopeful.

In fact, however,
Starr would prove to be

a far more aggressive
independent counsel

than his predecessor.

Unlike Fiske, who determined
to finish his work quickly,

Starr would follow his
investigation wherever it led,

no matter the cost
in time or money.

I came to believe it was
a persecution,

not a prosecution.

It was an investigation
in search of a crime,

which is not how investigations
are supposed to work.

They were not investigating
an allegation of a crime.

They were looking for a crime.

To Starr, the sudden appearance
of Hillary's billing records

seemed anything but accidental.

The discovery
of the Rose Law Firm records

was a very significant event.

It was a significant event

because there had been
a subpoena outstanding

for those law firm records
for a long, long time.

And the Rose Law Firm said,

"We don't have them,
and they were taken away."

And there were issues as to,

well, why would law firm records
leave the law firm?

They weren't individual records,
they were law firm records.

So, why wouldn't they be there?

Where are they?

Mrs. Clinton!

Good morning, how are you all?

Mrs. Clinton,
how important is this week

in terms of turning
your image around?

Oh, I think it's important to
talk about the book I've written

about America's children,

and that's what I'm going
to try to do,

plus answer all the questions.

The discovery of her missing
billing records

undermined Hillary's efforts

to recede
from the public spotlight.

The Rose Law Firm records were
found in the living quarters

of the White House in August.

As she set out
on a national tour

to promote her book on children,

she could not escape questions
about Whitewater.

It's an important question,
Mrs. Clinton,

because Republicans on the
Senate banking committee...

She was totally under siege.

So was the president,

but he allows this kind of thing
much more easily

to roll off his back.

Hillary becomes obsessed.

She has an enemy, the enemy
is the special prosecutor,

and one or the other
is going to be killed.

In Ken Starr, though,
Hillary had met her match.

Behind his avuncular smile, he
was relentless and implacable.

On January 19,
Starr subpoenaed Hillary,

the only first lady ever
to have been forced to testify

before a grand jury.

Rather than take her testimony
in the White House,

he insisted that she come
to the federal courthouse

in downtown Washington.

I think the idea that they would
make her come to the courthouse

and to the grand jury was
intended to humiliate her.

Would you rather have been
somewhere else today?

Oh, about a million other places
today, indeed.

In the end, Hillary's
billing records proved little.

They showed that she had
represented Jim McDougal,

but didn't prove she'd known
he had used fraudulent loans

to prop up the failing
Whitewater development.

Though many urged him
to drop the investigation,

Starr redoubled his efforts.

He re-opened all the files
that Fiske had closed;

he chased down and challenged
every privilege

that had been afforded
not just to President Clinton

but to previous presidents.

He decided to re-interview
everybody,

bring 'em all back
to the grand jury.

The independent counsel focused
on finding witnesses in Arkansas

who could testify to the
Clintons' participation

in fraudulent real estate deals
15 years before.

People at the lowest level
were hurt.

People's lives were ruined.

People were left in debt that
they took years to get out of.

They broke people.

I mean, investigators invaded
high school campuses

to put the thumb screws on high
school kids for information.

In May, Starr was able
to convict Jim McDougal

of loan fraud.

Under the threat
of imprisonment,

McDougal agreed to cooperate.

Suddenly, he claimed
that Bill Clinton

had known about
his illegal loans.

After Jim McDougal is convicted,
everything changes.

Up until that point,

he never pointed the finger
at the Clintons.

He never indicated that they
were involved in wrongdoing.

But once he's convicted,

all of a sudden he begins
coming up with stories

that implicate the Clintons.

McDougal's testimony
was confused and contradictory;

few believed him.

Unable to find
other credible evidence,

Starr felt stymied
and increasingly determined

to find something that would
stick to the president.

There's no question at all
that at this point,

the Starr prosecutors believe

that the Clintons
are hiding evidence

and lying when they deny
that they had involvement

in some of McDougal's
enterprises.

And conversely,
the White House thinks

that these Starr prosecutors
have shifted

and now all they're doing
is a president hunt.

As Starr scoured the president's
past for evidence of crimes,

Clinton's prospects
for the future

were looking brighter than ever.

By the time that he is
heading into summer,

looking toward the fall
for his reelection,

President Clinton is
a new man again.

He's no longer
the figure of ridicule,

the weak figure
he had become in 1994.

He's standing strong again
with the public.

And his opponents
are looking weak.

Clinton's Republican opponent

in the presidential election
that fall

was Kansas senator Robert Dole.

With the economy strong
and Clinton resurgent,

Dole could do little
but characterize the president

as a free-spending liberal.

The federal government
is too big

and it spends too much
of your money... your money.

To force the issue, the
Republican Congress in August

sent Clinton
a welfare reform bill

he had already vetoed twice.

Welfare reform
had been a key part

of Clinton's "New Democrat"
philosophy,

but he was aware of how much
liberals in his own party

hated the bill.

Bill Clinton authentically
believed in welfare reform.

That's welfare reform
in the abstract.

He wasn't being asked to sign
welfare reform in the abstract.

And so the question was, do you
sign it and proclaim a victory

knowing that to do so

is to leave many in your own
party's base hugely demoralized?

Or do you veto it

and accept the consequences
of vetoing popular legislation

just a few months
before the election?

It was an agonizing choice
for Bill Clinton.

In August, the president signed
the welfare reform bill.

When I ran for president
four years ago,

I pledged to end welfare
as we know it.

I have worked very hard
for four years to do just that.

Today, the Congress
will vote on legislation

that gives us a chance
to live up to that promise.

Clinton's decision was the last
straw for many on the left.

Several of his closest political
allies resigned in protest.

It made him someone
who was capable of anything.

And it no longer mattered
what party he was in.

You couldn't tell
what he would do

and what he would be willing
to go along with.

With welfare reform behind him,

Clinton solidified his grip
on the race.

Deprived of his last
best campaign issue,

Bob Dole waged an anemic race.

Clinton, meanwhile,
campaigned with gusto.

We will together build a bridge
to the 21st century

wide enough and strong enough to
take us to America's best days.

Will you do that?

He was in his element.

He was shorn
of this great burden

that had been over him in '94.

He was out making the case
in the best, most positive

and toughest way he could,
and he was loving it.

Clinton was no longer the issue.

People weren't asking
how he became president,

or, "This guy's illegitimate."

He was now looked upon
as the president.

In November,
Clinton won by a margin

that had once seemed
inconceivable,

taking 31 states and 70%
of the electoral votes.

I, William Jefferson Clinton,
do solemnly swear...

That I will faithfully execute

the office of president
of the United States.

That I will faithfully execute

the office of president
of the United States.

The reelection in 1996

is obviously one of the great
comebacks in American politics.

A president who had been written
off as roadkill

just two years earlier

managed to come back to a very
convincing reelection in 1996,

the first Democrat
to win a second term

since Franklin Roosevelt.

Clinton had survived,

some believed
by selling his soul;

others, by finding it again.

As he gave his second
inaugural address,

Bill Clinton sought
to turn the page

on the ugly partisan battles
of the last four years.

The American people
returned to office

a president of one party
and a Congress of another.

Surely they did not do this

to advance the politics
of petty bickering

and extreme partisanship
they plainly deplore.

The one part of that speech

that I think mattered more
to him than any other

was his reference
to the scriptural phrase

to be the repairer of
the breach, from Isaiah.

They call all us instead to be
repairers of the breach.

He really felt like
he had come through

this trial by fire and storm
and that the country had too,

and that now we could
repair the breach

and move forward together.

He felt, he really believed,
that he had this chance

to build this bridge
to the 21st century,

and that we had to do
certain things

that would help all people
to get there.

As Clinton strode triumphantly
down Pennsylvania Avenue

flush with victory,

there was no hint that he had
already set in motion

events that would soon divide
the country as never before

and nearly destroy
his presidency.