When Bush was inaugurated, he entered office at a time of significant change in the world. He would preside over the nation during a time when the Berlin Wall would come down and the Soviet Union would disintegrate into a number of smaller nations. In his Inaugural Address, Bush told the nation:
"I come before you and assume the Presidency at a moment rich with promise. We live in a peaceful, prosperous time, but we can make it better. For a new breeze is blowing, and a world refreshed by freedom seems reborn; for in man's heart, if not in fact, the day of the dictator is over. The totalitarian era is passing, its old ideas blown away like leaves from an ancient, lifeless tree. A new breeze is blowing, and a nation refreshed by freedom stands ready to push on. There is new ground to be broken, and new action to be taken."
It would become clear that Bush's strength was on the international stage. One of his first challenges was with Panamanian leader Manuel Noriega, who once had been supported by the United States government, but who was later accused of spying for Fidel Castro and using Panama to traffic drugs into the United States. In the early months of his presidency, Bush had to address the challenge of removing Noriega from power, a plan that had began during the Reagan administration, when economic sanctions were imposed on the country. These had included prohibiting American companies and government from making payments to Panama and freezing $56 million in Panamanian funds in American banks. Reagan had sent more than 2,000 American troops to Panama as well. But unlike Reagan, Bush was able to remove Noriega from power. This would not occur until late 1989 after Noriega refused to accept the results of a May 1989, democratic elections, in which Guillermo Endara was elected president. In response, Bush sent 2,000 more troops to the country. He removed an embassy and ambassador from the country, and dispatched additional troops to Panama. When a U.S. serviceman was shot by Panamanian forces in December 1989, Bush ordered 24,000 troops into the country with an objective of removing Noriega from power in what was called "Operation Just Cause". The move resulted in Noriega's arrest on charges of drug trafficking and money laundering.
On June 12, 1987, President Reagan had called on Soviet leader Mikhail Gorbachev to tear down the Berlin Wall. Bush pursued Reagan's political pressure and the wall ultimately did come down in the fall of 1989. This led to the re-unification of Germany and in the dissolution of the Soviet Union in 1991.
But it was in domestic matters that Bush faced challenges that would prevent him from winning a second term. Early in his term, Bush faced the problem of large deficits spawned by the Reagan years. The deficit had grown to three times its size since 1980. This financial situation severely limited the President's ability to enact major domestic programs. The federal government did not have the revenues for any large new domestic programs. Recognizing these constraints, Bush stressed that he would pursue "a limited agenda," that included volunteerism, education reform, and anti-drug efforts. He had pledged during the campaign not to raise taxes, and he now realized that he had put himself in the difficult position of trying to balance the budget and reduce the deficit without imposing additional taxes. He also faced a Congress controlled by the Democrats. His own party thought that he should approach the budget deficit by drastically cutting domestic spending, while the Democrats wanted to raise taxes on the richest Americans. As Budget negotiations continued, Bush found himself in a difficult position. Ultimately, for the 1991 fiscal year, Bush was left with no choice but to compromise with Congress. He was forced to renege on his 1988 "no new taxes" campaign promise. He told members of the press that he had to concede that that tax increases were probably necessary to solve the deficit problem.
With limited options for new government programs, Bush turned his attention to voluntary service as a means of solving some of America's most serious social problems. He used what he called the "thousand points of light" theme to describe the power of citizens to solve community problems. In his 1989 inaugural address, President Bush said, "I have spoken of a thousand points of light, of all the community organizations that are spread like stars throughout the Nation, doing good." This would eventually lead to his report to the nation on The Points of Light Movement. He said, "Points of Light are the soul of America. They are ordinary people who reach beyond themselves to touch the lives of those in need, bringing hope and opportunity, care and friendship. By giving so generously of themselves, these remarkable individuals show us not only what is best in our heritage but what all of us are called to become." In 1990, the Points of Light Foundation was created as a nonprofit organization in Washington to promote this spirit of volunteerism. By 2012, Points of Light had mobilized 4 million volunteers in 30 million hours of service worth $635 million.
At one point in his presidency, George H. W. Bush enjoyed an approval rating of nearly 90%. But it turned out to be soft support. In the 1992 election, Americans turned their mind to a sluggish economy and to the fact that Bush had failed to keep his "no new taxes" pledge. He was defeated in his bid for re-election. In spite of his not becoming a two-term president, today he is remembered as a man of conscience and reason, and a steady hand at a time of geopolitical instability. A 2014 survey of the members of the American Political Science Association’s Presidents and Executive Politics section ranked Bush 17th among the 43 presidents to date. He was especially praised for his willingness to compromise, in contrast to the intensely partisan era that followed his presidency.