Appendix A REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE COUNCIL OF ECONOMIC ADVISERS DURING 1992

Transcription

1 Appendix A REPORT TO THE PRESIDENT ON THE ACTIVITIES OF THE COUNCIL OF ECONOMIC ADVISERS DURING 1992

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3 LETTER OF TRANSMITTAL COUNCIL OF ECONOMIC ADVISERS, Washington, D.C., December 31, 1992 MR. PRESIDENT: The Council of Economic Advisers submits this report on its activities during the calendar year 1992 in accordance with the requirements of the Congress, as set forth in section 10(d) of the Employment Act of 1946 as amended by the Full Employment and Balanced Growth Act of Sincerely, Michael J. Boskin, Chairman David F. Bradford, Paul Wonnacott, 331

4 Council s and their Dates of Service Name Position Oath of office date Separation date Edwin G. Nourse Leon H. Keyserling.. John D. Clark.. Roy Blough Robert C. Turner Arthur F. Burns Neil H. Jacoby Walter W. Stewart Raymond J. Saulnier.. Joseph S. Davis Paul W. McCracken... Karl Brandt Henry C. Wallich Walter W. Heller James Tobin Kermit Gordon Gardner Ackley John P. Lewis Otto Eckstein Arthur M. Okun James S. Duesenberry Merton J. Peck Warren L. Smith Paul W. McCracken Hendrik S. Houthakker Herbert Stein Ezra Solomon Marina v.n. Whitman Gary L Seevers William J. Fellner Alan Greenspan Paul W. MacAvoy Burton G. Malkiel Charles L Schultze William D. Nordhaus Lyle E. Gramley George C. Eads Stephen M. Goldfeld Murray L Weidenbaum... William A. Niskanen Jerry L. Jordan Martin Feldstein William Poole Beryl W. Sprinkel Thomas Gale Moore Michael L Mussa Michael J. Boskin John B. Taylor Richard L Schmalensee.. David F. Bradford Paul Wonnacott Chairman August 9, 1946 Vice Chairman August 9, 1946 Acting Chairman November 2, Chairman May 10, 1950 August 9, 1946 Vice Chairman May 10, 1950 June 29, 1950 September 8, Chairman March 19, 1953 September 15, December 2, April 4, 1955 Chairman December 3, May 2, 1955 December 3, November 1, May 7, 1959 Chairman January 29, 1961 January 29, 1961 January 29, 1961 August 3, 1962 Chairman November 16, May 17, 1963 September 2, November 16, Chairman February 15, February 2, February 15, July 1, Chairman February 4, February 4, February 4, Chairman January 1, 1972 September 9, March 13, 1972 July 23, 1973 October 31, Chairman September 4, June 13, 1975 July 22, 1975 Chairman January 22, March 18, 1977 March 18, 1977 June 6, Chairman Chairman Chairman Chairman MsmbBr August 20, 1980 February 27, 1981 June 12, 1981 July 14, 1981 October 14, 1982 December 10, 1982 April 18, 1985 July 1, 1985 August 18, 1986 February 2, 1989 June 9, 1989 October 3, 1989 November 13, 1991 November 13, 1991 November 1, January 20, February 11, August 20, January 20, December 1, February 9, April 29, January 20, October 31, January 31, January 20, January 20, November 15, July 31, December 27, February 15, August 31, February 1, January 20, June 30, January 20, January 20, December 31, July 15, August 31, March 26, August 15, April 15, February 25, January 20, November 15, January 20, January 20, February 4, May 27, January 20, January 20, August 25, March 30, July 31, July 10, January 20, January 20, May 1, September 19, August 2, 1991 June 21,

5 and the other Council s appeared before numerous other organizations to explain the Administration's economic principles, policies, and outlook. Dr. Boskin continued to chair the Working Group on the Quality of Economic Statistics, an assembly of the major Federal statistical agencies. The Council worked closely with the Working Group throughout 1992 in implementing a list of 25 recommendations the President had previously approved for improving the quality and timeliness of economic statistics. The Council was one of the leading participants in the formulation of the Administration's economic policies through various Cabinet and sub-cabinet working groups. In testimony before the Congress and in meetings with business and other groups the Chairman and the Council s stressed the importance of enacting a set of stimulative, temporary tax reductions while slowing spending to reduce the long-term structural Federal budget deficit, shifting the composition of Federal spending toward investment in productive infrastructure and research and development, and reducing the disincentives in the tax system to entrepreneurship, innovation, saving, and capital formation. INTERNATIONAL ECONOMIC POLICIES International economic issues remained a very high priority at the Council during The Chairman and the Council s stressed the benefits of free trade and open markets for goods, services, and investment in numerous meetings with outside groups and they emphasized the risk to world economic growth posed by rising protectionism. The Council participated in formulating Administration policy on the Uruguay Round of the General Agreement on Tariffs and Trade, the North American Free Trade Agreement, and many other issues pertaining to international trade policy. The Council also participated in formulating the Administration positions on legislation in the international arena. The Council continued to be involved in Administration policies for advancing economic reform in Eastern Europe and the former Soviet Union, meeting with numerous officials from these countries throughout the course of the year. Dr. Boskin traveled to Paris as part of the U.S. delegation to the Organization of Economic Cooperation and Development (OECD) Ministerial Meeting. He also served as Chairman of the OECD Economic Policy Committee. Dr. Boskin continued to chair the Administration's working group on economic reform in the former Soviet Union and continued to be a coordinator for the Administration's assistance programs for the Commonwealth of Independent States. Dr. Wonnacott led the U.S. delegation to assess U.S. economic policy. He was also a member of the U.S. delegation to the OECD 335

6 Working Party 3 on macroeconomic policy coordination. Dr. Bradford headed the U.S. delegation to the OECD Working Party 1 meetings on microeconomic and structural issues. The Council provided the President and the White House Senior Staff with regular briefings and analytical materials on international developments and participated in preparations for the Economic Summit in Munich. The Council also participated in discussions on a wide range of issues including developing country debt, macroeconomic policy coordination, and various export promotion proposals with other members of the Administration, the Federal Reserve, the World Bank, the International Monetary Fund, and representatives of other countries. The Council s and the Council Senior Staff conducted numerous briefings on the U.S. economy for visiting officials and scholars. MICROECONOMIC POLICIES The Administration considered and proposed action this year on a wide range of microeconomic issues. In its work in this area, the Council repeatedly stressed that government regulation must pass careful cost-benefit tests and that where regulation is appropriate, it should be formulated to allow workers and firms maximum flexibility, as well as to provide incentives to meet social goals in the least costly manner. The Council was instrumental in ensuring that legislative initiatives were designed to achieve reforms in as cost-effective a manner as possible. The Council emphasized the principles of promoting flexibility, enhancing incentives, and placing maximum reliance on the private sector in a wide range of policy areas. The Council was also instrumental in the President's decision in January 1992 to establish a 90-day Regulatory Moratorium. During the moratorium Federal agencies issued only those new regulations deemed essential to preserving the health and maintaining the safety of the American people. Also during the moratorium all agencies were encouraged to reexamine the regulations which were already in place and for which they were responsible, with the goal of rescinding those regulations that were no longer necessary and modifying those regulations where the purpose could be achieved at a lower cost to American businesses and individuals. The Council worked with the Office of the White House Counsel and the Council on Competitiveness within the Office of the Vice President to assist the various agencies in implementing the President's regulatory review policies. The Council was particularly concerned that the proposed regulatory changes achieve the goals of the underlying legislation at reduced cost to the American econo- 336

7 my, and that the agency's claims of cost savings were credible and supportable. At the end of the first 90 days the Regulatory Moratorium was extended for another 120 days, after which it was extended for an additional year. In addition to the Moratorium, the Administration established new criteria for performing cost-benefit analysis and new requirements for reviewing legislative proposals. The President asked all agencies to perform cost-benefit analyses of legislative proposals under active consideration by the Congress or to be proposed by the agencies. As a member of the Environmental Policy Review Group, Dr. Bradford dealt with a wide range of environmental issues, including climate change policy, Western water reforms, the Wisconsin Electric Power Company ruling on modifications at power plants, and the development of appropriate contingent valuation methods. He participated in a variety of working groups on income distribution, financial institution reform and regulation, tax policy, telecommunications, energy markets, and science and technology policy. He also chaired the newly created interagency Committee on Economic Research on Natural Resources and the Environment. Dr. Bradford was instrumental in the development of the Administration's health care proposals, particularly the small market reform and health risk adjuster proposals. PUBLIC INFORMATION The Chairman and the Council s regularly testify before the Congress, make public speeches, participate in radio and television news programs, and hold news briefings. In addition, the Council produces two publications a year for the public. The Economic Report of the President is the principal medium through which the Council informs the public of its work and its views. It is an important vehicle for presenting the Administration's domestic and international economic policies. Annual distribution of the Economic Report in recent years has averaged about 45,000 copies. The Council assumes primary responsibility for the monthly Economic Indicators, which is issued by the Joint Economic Committee of the Congress and has a distribution of approximately 10,000. THE COUNCIL AND THE STAFF The Chairman is responsible for communicating the Council's views on economic developments to the President through personal discussions and written reports. The Chairman also represents the Council at Cabinet meetings, meetings of the National Security Council on issues of economic importance, daily White House 337

8 senior staff meetings, budget team meetings with the President, and at many other formal and informal meetings with the President and senior White House staff, as well as with other senior government officials. The Chairman guides the work of the Council and exercises ultimate responsibility for directing the work of the professional staff. s of the Council are involved in the full range of issues within the Council's purview, and are responsible for the daily supervision of the work of the professional staff. s represent the Council at a wide variety of interagency and international meetings and assume major responsibility for selecting issues for Council attention. The small size of the Council permits the Chairman and s to work as a team on most policy issues. There continued to be, however, an informal division of subject matter. Dr. Bradford was primarily responsible for microeconomic and sectoral analysis and regulatory issues. Dr. Wonnacott was primarily responsible for domestic and international macroeconomic analysis and economic projections. PROFESSIONAL STAFF The professional staff of the Council consists of the Special Assistant, the Staff Assistant to the Chairman, the Senior Statistician, 11 senior staff economists, 1 staff economist, 7 junior staff economists, and 1 research assistant. The professional staff and their respective areas of concentration at the end of 1992 were: K.C. Fung Sherry Glied Andrew S. Joskow Steven B. Kamin John H. Kitchen Michael M. Knetter Howard D. Leathers Deborah J. Lucas Andrew B. Lyon Special Assistant to the Chairman J.D. Foster Staff Assistant to the Chairman Shelley A. Slomowitz Senior Staff Economists International Trade Health and Labor Regulation, Energy, and Industrial Organization International Finance Macroeconomics and Forecasting Macroeconomics, Monetary Policy, and Quality of Statistics Agriculture, International Trade, and Natural Resources Financial Markets and Monetary Policy Public Finance 338

9 Raymond L. Squitieri Jonathan B. Wiener Kevin Berner Christopher J. Acito Lucy P. Allen Sherif Lotfl Joshua B. Michael Kimberly J. O'Neill Natalie J. Tawil Darryl S. Wills Energy and Environment Environment, Natural Resources, and Health and Safety Senior Statistician Catherine H. Furlong Staff Economist Public Finance Junior Staff Economists Macroeconomics and Finance Regulation and Microeconomics International Macroeconomics and Finance Macroeconomics and Quality of Statistics Health and Public Finance Environment and International Trade Labor and Agriculture Research Assistant Bret M. Dickey Macroeconomics and Forecasting Mrs. Furlong manages the Statistical Office assisted by Susan P. Clements, Linda A. Reilly, Margaret L. Snyder, and Brian A. Amorosi. The Statistical Office maintains and updates the Council's statistical information system, overseeing the publication of the Economic Indicators, the statistical appendix to the Economic Report, and the verification of statistics in memoranda, testimony, and speeches. Emily Chalmers provided editorial assistance in the preparation of the 1993 Economic Report. Two former staff members returned to assist in the preparation of the 1993 Report: Dorothy Bagovich (statistician) and Lissa J. Rideout (student assistant). SUPPORTING STAFF The Administrative Office, which provides general support for the Council's activities, consists of Elizabeth A. Kaminski, Administrative Officer, and Catherine Fibich, Administrative Assistant. The secretaries for the Council of Economic Advisers during 1992 were Alice H. Williams and Sandra F. Daigle (secretaries to the Chairman), Lisa D. Branch and Francine P. Obermiller (secretaries to the s). The secretaries for the Council's staff were Mary E. Jones, Rosalind V. Rasin, Mary A. Thomas, and Janet J. Twyman. Mark H. Fithian, Ian B. Goldberg, and Jennifer Howard served as student assistants during the year. Janet L. Fitzgerald and Mary 339

10 Elizabeth Pignone served as research assistants during the summer. DEPARTURES Harry G. Broadman, who served as Special Assistant to the Chairman and Senior Staff Economist, resigned in February 1992 to accept an appointment as Assistant U.S. Trade Representative. The Council's senior staff economists in most cases are on leave of absence from faculty positions at academic institutions or from other government agencies or research institutions. Their tenure with the Council is usually limited to 1 or 2 years. Most of the senior staff economists who resigned during the year returned to their previous affiliations. They are Randall W. Eberts (Federal Reserve Bank of Cleveland), Joseph W. Glauber (U.S. Department of Agriculture), Spencer D. Krane (Board of Governors of the Federal Reserve System), Catherine L. Mann (Board of Governors of the Federal Reserve System), and Robert W. Staiger (Stanford University). Others went on to new positions: They are David S. Bizer (Securities and Exchange Commission) and William G. Gale (The Brookings Institution). Junior staff economists generally are graduate students who spend 1 year with the Council and then return to complete their dissertations. Those who returned to their graduate studies in 1992 are: Jeffrey S. Gray (University of Pennsylvania), John A. Higgins (Columbia University), Thomas N. Hubbard (Stanford University), Philip I. Levy (Stanford University), and Derek H. Utter (University of Pennsylvania). Nancy L. Maritato (National Academy of Sciences) and Michael G. Williams (Securities and Exchange Commission) went to new positions. 340