It's 1972, and several possible members of Nixon re-election campaign broke into the Democratic National Committee headquarters at the Washington, D.C.Watergate Office Building. After the five perpetrators were arrested, the press and the U.S. Justice Department connected the cash found on them at the time to the Nixon re-election campaign commitee. The House and Senate began several more investigations, and soon the House began impeachment proceedings. Nixon was impeached in August 20, 1974 and was removed from office in early September. The result of the whole fiasco, was a sharp fall in the public's perception and trust of the government, which would later play to the Republicans defeat in the 1976 Elections.
Yet things wouldn't be better, or even go back to normal. The next president, Jimmy Carter, was more of a humble honest peanut farmer than a great leader. And this played into the government's perceived incompetence, as they failed to return hostages taken by the Iranian government from the U.S. Embassy in Tehran, which lead to several of them being killed. This combined with increasing partisanship, and a recession in 1979 resulted in the democratic defeat in 1980.
The new president, Ronald Reagan, was responsible for a recession in 1981, due to Reagan's economic policies. This combined with the First Iraq-gate scandal which broke in 1981, resulted in continued loss of faith in the government. This was exacerbated by the assassination or Ronald Reagan by John Hinckley Jr. in March 30, 1981. Which lead to vice president George H.W. Bush becoming president.
George H.W. Bush was a moderate in the party, and this lead to him replacing several of Reagan's economic policies, which he called "Voodoo Economic Policy". He also saw more relaxed tensions with the Soviet Union, and under him the economy began to recover, though quite slowly. But Bush's moderate reputation, lead to many considering him to be a counterfeit conservative, which resulted in a bitter primary fight in 1984. Which wasn't seen since the 1976 in the Republican party. Bush won the primaries (Against Paul Buchanan in 1984), and was elected to a full term in 1985. During his term as president, he was embroiled in the Second Iraq-gate scandal, which broke in 1986, which alongside the Iran-Contra affair resulted in the increase of distrust of the government, which had been low since Watergate.