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Council of Economic Advisers (CEA)

Agency overview
Formed	1946; 73 years ago (1946)
Preceding agencies	Office of Price Administration (World War II)[1] Council on Wage and Price Stability (Carter era)[1][better source needed]
Headquarters	Eisenhower Executive Office Building
Employees	About 35
Agency executive	Kevin Hassett, Chairman
Parent agency	Executive Office of the President of the United States
Website	Council of Economic Advisers

The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy.^[2] The CEA provides much of the empirical research for the White House and prepares the annual Economic Report of the President.

Economic Report of the President

The report is published by the CEA in February of each year, and reviews what economic activity was of impact in the previous year, outlines the economic goals for the coming year (based on the President's economic agenda), and makes numerical projections of how the economy will perform. Criticism usually follows, sometimes attacking the importance placed or not placed on particular data, and also on the importance of particular goals presented in the Overview.

Actual data, related to or used in the report, are from the Bureau of Economic Analysis and U.S. Bureau of Labor Statistics.^{[citation needed]}

History: 1946–1978

The Truman administration established the Council of Economic Advisers via the Employment Act of 1946, to provide the presidents with objective economic analysis and advice on the development and implementation of a wide range of domestic and international economic policy issues. It was a step from an "ad hoc style of economic policy-making to a more institutionalized and focused process". In 1949 Chairman Edwin Nourse and member Leon Keyserling argued about whether the advice should be private or public and about the role of government in economic stabilization.^[3]

Nourse believed a choice had to be made between "guns or butter" but Keyserling argued for deficit spending, an expanding economy could afford large defense expenditures without sacrificing an increased standard of living. In 1949, Keyserling gained support from Truman advisors Dean Acheson and Clark Clifford. Nourse resigned as chairman, warning about the dangers of budget deficits and increased funding of "wasteful" defense costs. Keyserling succeeded to the chairmanship and influenced Truman's Fair Deal proposals and the economic sections of NSC 68 that, in April 1950, asserted that the larger armed forces America needed would not affect living standards or risk the "transformation of the free character of our economy."^[4]

During the 1953–54 recession, the CEA, headed by Arthur Burns deployed non-traditional neo-keynesian interventions, which provided results later called the "steady fifties" wherein many families stayed in the economic "middle class" with just one family wage-earner. The Eisenhower Administration supported an activist contracyclical approach that helped to establish Keynesianism as a possible bipartisan economic policy for the nation. Especially important in formulating the CEA response to the recession—accelerating public works programs, easing credit, and reducing taxes—were Arthur F. Burns and Neil H. Jacoby.^[5]

Until 1963, during its first seven years the CEA made five technical advances in policy making, including the replacement of a "cyclical model" of the economy by a "growth model," the setting of quantitative targets for the economy, use of the theories of fiscal drag and full-employment budget, recognition of the need for greater flexibility in taxation, and replacement of the notion of unemployment as a structural problem by a realization of a low aggregate demand.^[6]

The 1978 Humphrey–Hawkins Full Employment Act required each administration to move toward full employment and reasonable price stability within a specific time period. It has made CEA's annual economic report highly political in nature, as well as highly unreliable and inaccurate over the standard two or five year projection periods.^[7]

History: 1978–present

Since 1980, the CEA focused on sources of economic growth, the supply side of the economy and on international issues.^[3] In the wake of the Great Recession of 2008-2009, the Council of Economic Advisers played a significant role in supporting the American Recovery and Reinvestment Act. ^[8]

Under the direction of Kevin Hassett during the Donald Trump presidency, the CEA released a report vilifying socialism and associating what they characterized as the "socialist" policies of liberal politicians to those of historical authoritarian regimes.^[9]

Organization

The council's chairman is nominated by the president and approved by the United States Senate. The members are appointed by the president. As of July 2017, the Council´s 18 person staff consisted of a chief of staff (Director of Macroeconomic Forecasting), 15 economists (5 senior, 4 research, 4 staff economists, 2 economic statisticians) and 2 operations staff.^[10]Many of the staff economists are academics on leave or government economists on temporary assignment from other agencies.^[8]

Chairmen and members

List of chairmen

List of members

References

Sources

• 
  Brazelton, W. Robert (2001), Designing U.S. Economic Policy: An Analytical Biography of Leon H. Keyserling, New York: Palgrave, ISBN 0-333-77575-9
  


• 
  Brazelton, W. Robert (1997), "The Economics of Leon Hirsch Keyserling", Journal of Economic Perspectives, 11 (4): 189–197, doi:10.1257/jep.11.4.189, ISSN 0895-3309
  


• 
  Brune, Lester H. (1989), "Guns and Butter: the Pre-Korean War Dispute over Budget Allocations: Nourse's Conservative Keynesianism Loses Favor Against Keyserling's Economic Expansion Plan", The American Journal of Economics and Sociology, 48 (3): 357–371, doi:10.1111/j.1536-7150.1989.tb03189.x, ISSN 0002-9246
  


• 
  Cimbala, Stephen J.; Stout, Robert L. (1983), "The Economic Report of the President: Before and after the Full Employment and Balanced Growth Act of 1978", Presidential Studies Quarterly, 13 (1): 50–61, ISSN 0360-4918
  


• 
  Eizenstat, Stuart E. (1992), "Economists and White House Decisions", Journal of Economic Perspectives, 6 (3): 65–71, doi:10.1257/jep.6.3.65, ISSN 0895-3309
  


• 
  Engelbourg, Saul (1980), "The Council of Economic Advisers and the Recession of 1953–1954", Business History Review, 54 (2): 192–214, doi:10.2307/3114480, ISSN 0007-6805, JSTOR 3114480
  


• 
  Flickenschild, Michael, Afonso, Alexandre (2018), "Networks of economic policy expertise in Germany and the United States in the wake of the Great Recession", Journal of European Public Policy, doi:10.1080/13501763.2018.1518992, ISSN 1466-4429
  


• 
  Leeson, Robert (1997), "The Political Economy of the Inflation-unemployment Trade-off", History of Political Economy, 29 (1): 117–156, doi:10.1215/00182702-29-1-117, ISSN 0018-2702
  


• 
  McCaleb, Thomas S. (1986), "The Council of Economic Advisers after Forty Years", Cato Journal, 6 (2): 685–693, ISSN 0273-3072
  


• 
  Norton, Hugh S. (1977), The Employment Act and the Council of Economic Advisers, 1946–1976, Columbia: University of South Carolina Press, ISBN 0-87249-296-6
  


• 
  Salant, Walter S. (1973), "Some Intellectual Contributions of the Truman Council of Economic Advisers to Policy-making", History of Political Economy, 5 (1): 36–49, doi:10.1215/00182702-5-1-36, ISSN 0018-2702
  


• 
  Sobel, Robert (1988), Biographical Directory of the Council of Economic A dvisers, New York: Greenwood Press, ISBN 0-313-22554-0
  


• 
  Tobin, James; Weidenbaum, Murray, eds. (1988), Two Revolutions in Economic Policy: The First Economic Reports of Presidents Kennedy and Reagan, Cambridge: MIT Press, ISBN 0-262-70034-4
  


• 
  Wehrle, Edmund F. (2004), "Guns, Butter, Leon Keyserling, the AFL-CIO, and the Fate of Full-employment Economics", Historian, 66 (4): 730–748, doi:10.1111/j.1540-6563.2004.00094.x, ISSN 0018-2370
  

External links

• List of recent reports by the Council of Economic Advisors


• Records of the Office of the Council of Economic Advisors, 1953–61, Dwight D. Eisenhower Presidential Library


• Papers of Arthur F. Burns, Dwight D. Eisenhower Presidential Library


• Papers of Raymond J. Saulnier, Dwight D. Eisenhower Presidential Library


• Economic Report of the President:
  
  
  
  • 
    Economic Report of the President White House
  
  
  • 
    Economic Reports 1947 to present on FRASER, St. Louis Federal Reserve
  
  
  • 
    U.S. Bureau of Economic Analysis (BEA) US Gvt
  
  
  • U.S. Bureau of Labor Statistics
  
  
  • 
    Economic Report of the President (1995-present) United States Government Publishing Office