Cleveland had been styled as an honest candidate, nicknamed Grover the Good because of the reforms he had championed while Governor of New York. When he took office, Cleveland was faced with the task of filling all the government jobs for which the president had the power of appointment. These jobs were typically filled under the spoils system, and for the last twenty years they were filled by Republicans. Many Democrats expected that it would be payback time and these Republican office holders would be unceremoniously shown the door. But Cleveland announced that he would not fire any Republican who was doing his job well. He also said that he would not appoint anyone solely on the basis of party service. He did get rid of some Republicans indirectly by reducing the number of federal employees. Many departments had become bloated with Republicans who had been give political rewards and Cleveland was able to prune many of these positions. This put him at odds with many in his party, as his fellow Democrats were miffed at being excluded from the spoils. Later on, Cleveland did respond to some of this pressure by replacing more of the partisan Republican officeholders with Democrats, especially in policy making positions.
Cleveland was the first Democratic President to be subject to the Tenure of Office Act which originated had been passed in 1867 by a Republican controlled congress as a means of trying to control Andrew Johnson. The act required the Senate to approve the dismissal of any presidential appointee who was originally subject to its advice and consent. Cleveland believed the act was both wrong in principle and unconstitutional. He refused to abide by it, and this led to its ultimate repeal in 1887.
Cleveland faced a Republican Senate and was forced to resort to using his veto powers. Often this was used to veto hundreds of private pension bills for American Civil War veterans. Cleveland believed that if their pensions requests had already been rejected by the Pension Bureau, Congress should not attempt to override that decision. Later in his term, in 1887, Congress, pressured by the Grand Army of the Republic, passed a bill granting pensions for disabilities not caused by military service. Cleveland also vetoed that bill.
One of the most volatile issues of the 1880s was whether the currency should be backed by gold and silver, or by gold alone. The issue crossed party lines. Western Republicans and southern Democrats joined together in the call for the free coinage of silver, while those from both parties in the east wanted to keep the gold standard. Because silver was worth less than its legal equivalent in gold, taxpayers paid their government bills in silver, while international creditors demanded payment in gold, resulting in a depletion of the nation's gold supply. For this reason Cleveland and his Treasury Secretary Daniel Manning stood firmly on the side of the gold standard. They wanted to reduce the amount of silver that the government was required to coin. The Bland-Allison Act was passed in 1878 and Cleveland unsuccessfully appealed to Congress to repeal this law before he was inaugurated. A year into Cleveland's first term, one of the foremost silverites, Richard P. Bland, introduced a bill in 1886 that would require the government to coin unlimited amounts of silver. Bland's bill was defeated, but so was a bill the administration favored that would repeal any silver coinage requirement. The result was a draw and a retention of the status quo. It postponed resolution of the Free Silver issue until the presidency of William McKinley.
When it came to foreign affairs, Cleveland was a committed non-interventionist. He had campaigned against expansion and imperialism. As president he refused to promote the previous administration's Nicaragua canal treaty. Cleveland's Secretary of State, Thomas F. Bayard, began negotiations with the United Kingdom over fishing rights in the waters off Canada, and a treaty was later concluded, despite the opposition of New England's Republican Senators.
Cleveland's military policy called for modernization of the armed forces. In 1885 Cleveland appointed the Board of Fortifications under Secretary of War William C. Endicott to recommend a new coastal fortification system for the United States. No improvements to US coastal defenses had been made since the late 1870s. The following year, the Board produced a report which recommended a massive $127 million construction program at 29 harbors and river estuaries, to include new breech-loading rifled guns, mortars, and naval minefields. Most of the Board's recommendations were later implemented.
Cleveland saw Reconstruction as a failed experiment. He did not use federal power to enforce the 15th Amendment of the Constitution (which guaranteed voting rights to African Americans). He did not appoint any African-Americans to patronage jobs, though he allowed Frederick Douglass to continue in his post as recorder of deeds in Washington, D.C.
Cleveland viewed Native Americans as wards of the state. In his first inaugural address he said that "this guardianship involves, on our part, efforts for the improvement of their condition and enforcement of their rights." He believed in cultural assimilation, pushing for the passage of the Dawes Act, which provided for distribution of Indian lands to individual members of tribes, rather than having them continued to be held in trust for the tribes by the federal government. The majority of Native Americans disapproved of it plan. Cleveland believed the Dawes Act would lift Native Americans out of poverty and encourage their assimilation into white society, but in fact it weakened the tribal governments and allowed individuals to sell their land to white speculators with no benefit to the community.
In the month before Cleveland's 1885 inauguration, President Chester Alan Arthur had opened four million acres of Winnebago and Crow Creek Indian lands in the Dakota Territory to white settlement by executive order. Cleveland believed Arthur's order to be in violation of treaties with the tribes, and he rescinded it on April 17, 1885. He ordered the settlers out of the territory and sent in eighteen companies of Army troops to enforce the treaties.
Cleveland lost his bid for re-election in 1888. It is said that his young wife Frances told White House staff that they would be back in four years, and it turns out that she was correct, making Cleveland the only president to serve non-consecutive terms in office.