WASHINGTON DESK - The Clinton administration's promise to "Save Social Security First" has come under fire again on Friday after the Social Security Administration announced what amounted to a cut in Social Security benefits starting in January. The cost-of-living increase for Social Security benefit payments will be a meager 1.3% and becomes the lowest benefit adjustment in more than a decade. The average Social Security monthly check will only rise by about $10.
Making matters worse, the Clinton administration also announced Friday that premiums for Medicare, will be eating up about 11% of the adjustment, or an additional $1.70 a month rising to $45.50 next year. And, there will also be an increase in the out of pocket deductible for inpatient hospital care. That will rise by $4 to $768.
Its no wonder the Michigan October consumer-sentiment index report took a sudden downturn at the end of last week. According to market sources who saw the report on Friday, after the Clinton administration announcement of the cuts in actual Social Security and Medicare benefits was released, the index for consumer expectations fell to 88.2 from 93.9 in September.
Investors see something worse approaching. They have been pouring their money into Treasury bonds paying ever-lower interest, while letting the securities of even some of the most proven companies go down the drain.
Bill Clinton's State of the Union speech in which he promised to "Save Social Security first!" has turned to dust and in its place a wave of fear has evolved and suddenly the President of the United States cannot lead.
Mr. Clinton's economists continue to reexamine their elaborate mathematical models as slumping exports continue to lead the way to the Clinton administration's New Recession.
A basic truth that no one in the Clinton White House wants to come face to face with is that when recession becomes undeniable, most White House economists have attributed it not to a failure of human reason, but to a White House policy lapse.
A recession is on the American horizon and approaching rapidly. Alan Greenspan has made a second move in two weeks to cut interest rates. At least, he knows where the answers cannot be found.
In a National Association of Business Economists conference a few days ago, he speculated on what he thinks is the real problem, "...It's a fear induced, psychological response."
Perhaps, Greenspan was rethinking what looked so good to Treasury deputy secretary Lawrence Summers, who said earlier in the year "The only thing we have to fear is lack of fear itself."
Since then things have become a lot more scary. The House has voted to launch a full scale impeachment inquiry of president Bill Clinton and the resulting political crisis has set most of the nation into a worsening psychological depression over the domestic and international spectacle of the continuing antics of the Clinton retinue in the White House.
The botom has fallen out of the banks and financial markets in Asia, Indonesia, Russia, and Latin America. And Mr. Clinton has
coerced republican leadership in the House and Senate to
forgo any tax cuts and to "go along to get along" by authorizing billions for Clinton's new save the world first spending spree in a very unbalanced budget.
In retrospect, the U.S.trade gap climbed to a record $16.77 billion in August, expanded by a sharp increase in imports. The exploding trade deficit with China also reached its highest point in U.S. history on Friday.