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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.