Clinton adulation eclipses his trial

PRESIDENT CLINTON was riding high in the country and the polls yesterday, in the wake of his triumphal State of the Union address on Tuesday night. His fortunes in the Senate impeachment trial also seemed to brighten, as the White House special council, Gregory Craig, and Deputy Counsel, Cheryl Mills, took issue point by point with the details of the perjury and obstruction of justice charges against him.

"This is not obstruction of justice," Ms Mills recited like a mantra through her two-hour presentation to the senators held spellbound by her youthful poise and passion.

But the sense of optimism and even victory that swept across the Clinton camp did not go unchallenged, as one of the key policy proposals in Mr Clinton's State of the Union address - and one particularly praised by his supporters - came under attack from no less a figure than the Chairman of the Federal Reserve Board, Alan Greenspan.

Answering questions from members of a Congressional committee yesterday morning, Mr Greenspan said he opposed any measure which would lead to funds from the US state pension scheme being invested in stock markets. Mr Clinton had suggested that a part of the massive US budget surplus be put into stocks to help to head off the system's bankruptcy as the baby-boom generation reaches retirement.

In a remarkable and swift rebuff to this idea, Mr Greenspan said he believed that investment by the government would cause big problems for the stock market.

"Because I do not believe that it is politically feasible to insulate such huge funds from a governmental direction," he said, "I'm fearful that we will use those assets in a way, which one, will create a lower rate of return for Social Security recipients, but even a greater concern, that it will create sub-optimal use of our capital resources and those assets which create our standard of living."

Mr Greenspan's remarks indicated an unusual divergence of opinion between the two who are credited with the unprecedented eight-year run of growth enjoyed by the United States. Even though the ideas in the State of the Union address are presidential intentions rather than national policy, and must be enshrined in bills or the Budget and passed by Congress, such an early rejection of a proposal from so authoritative a source is rare.

An exultant Mr Clinton meanwhile was back on the stump, "selling" his State of the Union message in the heartland of snowy Buffalo in New York State and was then due to travel to suburban Philadelphia. Accompanied by his wife, Hillary, and Vice-President Al Gore and his wife, Tipper, Mr Clinton treated a 20,000-plus crowd - one of the largest to greet him since the 1996 Democratic Convention - to a rousing rally-style address that offered a foretaste of the presidential campaign in the year 2000.

The first opinion polls following the State of the Union address showed Mr Clinton's job approval ratings put on three to five points, reaching 76 per cent in one poll. Aside from the pension scheme initiative, one of the most popular points was the announcement that the federal government would sue the big US tobacco companies.