Greenspan Didn't Endorse Clinton Plan, but Helped It
Despite charges that he compromised the Federal ReserveÛªs vaunted independence by sitting next to Hillary Rodham Clinton when her husband delivered the State of the Union address, Chairman Alan Greenspan would do it again, in similar circumstances.</br></br>Many think Greenspan made a tactical error in accepting Clinton's invitation to sit in her box on Feb. 17. Greenspan doesn't agree.</br></br>There is little doubt that GreenspanÛªs presence, and his positive words in congressional testimony two days later on ClintonÛªs proposals for deficit reduction, gave the presidentÛªs program a cachet of immediate respectability. The Clinton White House was overjoyed with GreenspanÛªs remarks, which helped trigger a rally in the bond market, bringing long-term interest rates down.</br></br>But Greenspan revealed on March 24 before the Senate Finance Committee his frustration over the continued perception that he earlier had given the Clinton program an outright endorsement.</br></br>In his testimony Feb. 19 before the Senate Banking Committee, Greenspan was explicit in refusing to endorse the specifics of the Clinton program. He was enthusiastic over the prospect, for the first time in more than a decade, that a serious attack on the budget deficit had been proposed,