Well I found that I my system, suse8.1, gcc3.2 that the static option had to be entered in a different spot with LIBS

LD = $(CC)
DEFINES = -DPERL_CORE -DPERL_MICRO
OPTIMIZE = -O3
CFLAGS = $(DEFINES) $(OPTIMIZE)
LIBS = -static -lm
_O = .o

The interesting news out of this is that my static microperl, which has been packed with upx , is only 540k.

3684060  microperl-staticO3
1173816  microperl-staticO3-stripped
538938  microperl.upx