ECONOMIC REPORT OF THE PRESIDENT

and composition of the labor force, investment plans for all levels of
government, plus those of the private sector; (3) if insufficient investment
existed to provide full employment, then the [P]resident would
develop programs to achieve this level of employment. He was to
have similar responsibility for, and powers over, the control of inflation;
(4) this budget was to be prepared in the Executive Office of
the President; and (5) this bill would establish a Joint Congressional
Committee on the National Budget to study the [P]resident’s document
and either recommend or change any legislation implied in it”
(Mills 1988).
By contrast, the House substitute bill, called the Employment and
Production Act of 1946, “rejected the fundamental principles of the Senate
bill” (Bailey 1950). It removed the declaration of the Federal Government’s
responsibility for maintaining full employment, the accompanying commitment
of government resources, the affirmation of the right to employment
opportunity, and the National Production and Employment Budget program.
It also provided for a Council of Economic Advisers to be “composed
of three members at $15,000 a year, whose duties were to submit recommendations
to the President whenever inflation or unemployment threatened, to
consult with economic groups, and to submit annual and quarterly reports
on economic trends” (Bailey 1950).
The Employment Act that emerged from the Joint Conference
Committee and was signed into law reflects an attempt to reconcile the
profoundly different economic views contained in the House and Senate
bills. In the final law, the words “full employment” were ultimately replaced
with “maximum employment, production and purchasing power.” The law
also included language specifying that part of the Federal Government’s
purpose is “to foster and promote free competitive enterprise.” Instead of the
National Production and Employment Budget, the law called for an annual
Economic Report of the President, “setting forth . . . current and foreseeable
trends in the levels of employment, production, and purchasing power . . .
and a program for carrying out the policy [to promote] conditions under
which there will be afforded useful employment for those able, willing, and
seeking to work” (Employment Act 1946; DeLong 1996). Meanwhile, the
language from the House bill establishing the Council of Economic Advisers
was kept mostly intact.1
1 The law also established what is now known as the Joint Economic Committee, a standing
joint committee of Congress, whose original functions were to coordinate economic
policymaking, to monitor the subjects in the Economic Report, and to produce its own yearly
report in response to the President’s Economic Report (Tollestrup 2015).
The 70th Anniversary of the Council of Economic Advisers | 293