ECONOMIC REPORT OF THE PRESIDENT

C H A P T E R 7
THE 70 TH ANNIVERSARY
OF THE COUNCIL OF
ECONOMIC ADVISERS
Almost exactly 70 years ago, on February 20, 1946, President Harry
Truman signed the Employment Act of 1946 into law. Born out
of America’s experience during the Great Depression, this law reflected
Congress’s desire to prevent an economic calamity of that scale from ever
recurring. Yet the immediate practical consequences of the Employment
Act were modest: it created two institutions, the Joint Economic Committee
on the Economic Report—subsequently renamed the Joint Economic
Committee (JEC)—and the Council of Economic Advisers (CEA). Together
with the JEC, it was hoped that CEA would help to “defend the ramparts
against depression” (Flash 1965).
CEA is in many ways a distinctive institution, both within the administration
and in the international context. The CEA chair reports directly to
the President on economic issues, but CEA has no regulatory authority and
few prescribed operational responsibilities. For most of its history, CEA has
had a small staff drawn mostly from the academic economics community
and hired on the basis of professional expertise. The views it expresses are
grounded in economic analysis, and are based on applying economic theory
and empirical research to the often-novel situations in which policymakers
find themselves.
However, CEA is also a part of the Executive Office of the President,
working collaboratively with other departments within the Executive
Office of the President and the administration more broadly to advance
the President’s agenda. CEA plays a distinctive role in the administration,
but like other components of the administration, it also communicates and
operates as part of a team on behalf of the President.
While the Council has made useful contributions to economic policymaking
throughout its history, its role and influence have varied depending
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