What Is the Council of Economic Advisers (CEA)?

The Council of Economic Advisers (CEA) advises the President on macroeconomic matters. It consists of a chair and two other members. The CEA aims to advise and formulate economic policy for the White House and to ensure ﷽that all government departments promote the economic agenda of𒈔 the Executive Branch.

Understanding the CEA

The Council of Economic Advisers consists of three notable economists: a chair and two other members, each of whom is appointed by the President and approved by the Senate. Past chairs of the CEA include former Federal Reserve chairs Alan Greenspan, Ben Bernanke, and Biden administration Treasury Secretary Janet Yellen. Many former members of the CEA have gone on to the Federal Reserve but the CEA isn't tasked with determining monetary policy.

The CEA helps the President prepare the annual Economic Report of the President which provides an overview of the nation's economic progress. The report also analyzes economic developments, reviews federal government policies and programs to make sure they promote a strong economy, and recommends practices that support American workers.

Given its position in the Executive Branch, the CEA is naturally oriented toward the formulation of fiscal policy, a favored Keynesian poliꦍcy tool, rather than monetary policy which is controlled by the Federal Reserve.

The Executive Branch also includes the Treasury Department which manages Federal revenues and spending and the Office of Management and Budget which produces the President's budget. The CEA helps the President formulate fiscal policy and these other agencies implement that policy.

History of the Council ofꦫ Economic Advisers (CEA)

The CEA was formed during the Truman administration with the Employment Act of 1946. It initially promoted a 澳洲幸运5开奖号码历史查询:Keynesian bent, referencing the economic vision of John Maynard Keynes, and it was central to New Deal economic policies in the United States which favor large-scale deficit spending as a means to stimulate the economy.

The dominance of Keynesian policy orientation on the CEA would continue through the 1970's when President Richard Nixon paraphrased economist Milton Friedman's Time magazine column, "We are all Keynsians now."

Supply-side economic policy would generally replace the traditional Keynesian fiscal policy of the CEA by the 1980s during Republican administrations. Supply-siders such as Chair Greg Mankiw under President George W. Bush have generally favored tax cuts as a means to stimulate economic growth rather than large spending projects.

The CEA Under President Biden

The CEA is "charged with advising the President on economic policy based on data, research, and evidence." President Biden nominated a group of liberal economists including Chair 澳洲幸运5开奖号码历史查询:Cecilia Rouse. Rouse was confirmed by the Senate on March 2, 2021, and sworn in on March 12, 2021. Former President Biden also nominated 澳洲幸运5开奖号码历史查询:Jared Bernstein and Heather Boushey as members.

Rouse is a respected labor economist with expertise in economic issues relevant to education, equality, and unemployment. She became dean of the Princeton School of Public and International Affairs in 2012 after joining the faculty 20 years earlier. Rouse served as a member of President Obama's Council of Economic Advisers from 2009 to 2011.

Bernstein was Vice President Biden's chief economist in the first years of the Obama administration and Boushey is an economist and the CEO of the Washington Center for Equitable Growth.

The CEA Under President Trump

The CEA took a more conservative bent during the first Trump administration than it had in previous years and the chair was removed from a cabinet-level position.

Trump's first pick for the CEA Chair was Kevin Hassett, a fiscal conservative and former policy advisor with President George H.W. Bush and President Bill Clinton. Hassett was appointed by President Donald Trump in 2017, was confirmed by the Senate, and served until stepping down in July 2019.

The CEA had an acting chair, Swedish-born American economist Tomas J. Philipson, after Hassett departed. Philipson was tapped by Trump to lead the organization in late June 2019 after serving as a member of the CEA since 2017. He held the position until the end of June 2020.

Acting CEA Chair Tyler Goodspeed was then selected by President Donald Trump to lead the CEA in June 2020 following Philipson's resignation. Goodspeed is an American academic historian. Like Philipson, Goodspeed was a member of the CEA at the time he was nominated to become chair. Goodspeed resigned on Jan. 7, 2021.

CEA vs. National Economic Council (NEC)

The CEA is a key resource for economic issues between the White House and economic policymakers within the Labor and Commerce Departments and oth꧂er government agencies. The CEA is part of the Executive Office of the President 🐭and the chair is a cabinet-level position confirmed by the Senate.

The CEA contrasts with the National Economic Council (NEC). The NEC was established in 1993 to advise the Pres🌳ident on U.S. and global economic policy. The NEC is part of the Executive Office of the President but the Director of the NEC is not a cabinet-level position.

The NEC director is tasked with coordinating and applying the President's economic policy agenda in conjunction with a number of the administration's department and agency heads.

Former President Biden appointed Brian Deese as the director of the National Economic Council. Deese was previously the global head of sustainable investing at BlackRock Inc. and a senior fellow at the Harvard Kennedy School. Deese held several positions in the Obama administration before that, including the special assistant for economic policy to President Obama.

President Trump has again selected Kevin Hassett as director of the National Economic Council during his second term. Hassett is managing director at the Milken Institute and the Brent R. Nicklas Distinguished Fellow in Economics at the Hoover Institution at Stanford University.

The Bottom Line

The CEA is an agency that advises the President on matters of economic policy. It consists of a chair and two members and is supported by a group of econoꦆmists with expertise in different areas of the🌳 economy.

The CEA prepares the annual Economic Report of the President which looks back at the economy over the previous year and looks forward to the year ahead. The economic report is used to help support the President's yearly budget.