3% for a Life’s Savings Is a Bitter Harvest : Interest rates: The latest cut means another drop in income for seniors and more bad news for Bush.

Last week’s woeful statistics on unemployment may not be the worst news for President Bush’s reelection hopes. The worst news was actually good news for the President--the announcement of the Federal Reserve’s lowering of interest rates. The cut in lenders’ interest rates was just what Bush wanted, but it will hurt, not help, him keep another four-year lease on 1600 Pennsylvania Ave.

Cheaper rates on borrowed money will not lure consumers to spend money. Indeed, prior cuts haven’t achieved that goal because consumers have lost confidence in the President and probably won’t make a concerted decision to spend until after the election.

To be sure, Bush has been fervently supported by the over-65 age group that is more likely to be GOP-bound and consistent holder of the record for highest voter turnout at election time. But these supporters, including 33 million members of the American Assn. of Retired Persons, have been deserting the President for some months, and the recent cut in interest rates may be the last straw for them.

Conservative as investors, these citizens have seen their incomes cut significantly since Bush became President. Lower interest rates for borrowers means lower interest rates for these senior savers, especially investors in federally insured certificates of deposit and money market funds. These elderly Americans aren’t concerned about a cut in the capital gains tax, which Bush has supported, but they know that they are more the victims in the current recession than the 10 million unemployed.

They have saved their money, expected decent returns to supplement their pensions and gotten not one penny of tax relief on the increasingly meager savings account interest they have received. Within the next few weeks, interest rates for these savers will be below 3%, the lowest in three decades.

To add insult to injury is the continued extension of jobless benefits, the most recent effected last week, with the White House and Capitol Hill ignoring the adverse effect of lower interest rates on Americans whose only fault is their fiscal-mindedness.

Having spent the last 10 days in South Florida, one major haven of card-carrying members of the AARP, I can attest to the bitterness of seniors over George Herbert (as in Hoover, some say) Walker Bush. And what a difference from 1988, when candidate Bush’s “no new taxes” pledge delighted Florida audiences.

Indeed, Bush has only himself to blame for this untoward scenario: Perhaps the only recent President to have majored in economics as an undergraduate, he has appeared singularly inept in gauging money matters. He ignored the recession in 1990, hastily acknowledged it a year later and only this year has it become a matter of common conversation when he talks with the news media. Bush’s widely touted Christmas shopping spree last December (he bought some white socks and other incidentals) was an unmitigated PR disaster.

Each time extension of unemployment benefits became a Capitol Hill agenda item, Bush’s White House talked about narrowing the addition. Subsequently, the President signed a package not radically different from that originally proposed on the Hill.

No matter that each cut in interest rates has done little, if anything, to boost consumer spending, Bush has trudged on that yellow brick road as if some Wizard of Oz could lead the economy back to the Kansas standard.

Of course, the President’s own assets are resting in a blind trust, but surely he hasn’t been blind on the matter of that trust’s performance in the last year, giving him some inkling of the woes of prudent investors like senior citizens.

Bush is achieving a rarity in modern political history, alienating just about every economic group--the consumer, the jobless, the poor, the rich and the middle class. And he may be learning some new math that should boggle his mind: A 3% interest rate on savings, any way you cut it, really stinks.