According to politico.com:
Former President Bill Clinton described the ongoing tea party protests against the Democratic agenda as a sign their party was making progress.
Whitehouse quoted Clinton arguing: "The reason the tea-baggers are so inflamed is because we are winning."
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According to urbandictionary.com:
A Tea-bagger: Someone who rests their testicles on another persons face, while they are asleep/passed out.
this disgusting definition has over the last few months morphed into this:
Tea-Bagger: A derogatory term used by libtards and Obots to describe conservatives that are tired of paying higher taxes to subsidize people who are too lazy to pay their own way.
Bill Clinton, who would know, used the term "tea bagger" to disparage conservatives who are tired of supporting deadbeats. A protest against wasteful government spending and/or high taxes.
Tea Parties: Tea parties emerged in early 2009 by conservatives who got tired of high government spending and high taxes. The name "tea party" is a reference to the Boston Tea Party. The Boston Tea Party was a protest which occurred while America was a British colony. The protest was against high taxes and the colonists protested by dressing as Native Americans, running onto a ship and throwing tea overboard.
The people at the tea party were worried that more government spending would lead to a deficit that the government couldn't pay off.
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Most tea-partiers don't even know the true definition of a tea-bagger or realize what an insult the former president and many others have called us just because we are tired of big government, their intrusion into our lives, and because are willing to take a stand against them.
http://www.politico.com/politico44/perm/1109/clinton_we_are_winning_c3243bd1-33d6-42a7-ab70-5bae329fdc6e.html