Competitiveness Policy Council

The Competitiveness Policy Council was an independent federal advisory committee chartered in 1988 to advise the president and the Congress on more effective policies to promote U.S. competitiveness. The council had a unique quadrapartite membership composed of representatives from business, labor, government, and the public.

The council began operation in 1991, and ceased operation in 1997 after the Republican-led Congress failed to continue funding, and after council members decided to close out this successful experiment in the independent advisory function.

Authority for the council is found in the Competitiveness Policy Council Act, 15 U.S.C. §4801 et seq. This act was part of the larger Omnibus Trade and Competitiveness Act of 1988. The authorization of appropriations for the council expired in Fiscal year 1992, but otherwise the statutory underpinnings for the council remain intact, and the council could be revived by a future president with a pro-competitive agenda.

During its years in operation, the Competitiveness Policy Council prepared and issued four Reports to the President and Congress. They were:

The council adopted a broad approach to American competitiveness defining it as the ability of the United States to produce goods and services that meet the test of international markets while its citizens earn a standard of living that is both rising and sustainable over the long run. This definition differed from others in that era which emphasized the trade balance rather than the overall impact of governmental policies on national economic prosperity. The council's first report, "Building a Competitive America" (March 1992) explained that "three elements permeate our society and most directly hurt our competitive position: short-termism, perverse incentives, and absence of global thinking."

To help analyze the problems of faltering U.S. competitiveness, the council in its first year, established eight subcouncils to study and recommend solutions for the most critical problems hindering U.S. competitiveness. These subcouncils were: capital formation, education, training, public infrastructure, corporate governance and financial markets, trade policy, manufacturing, and critical technologies. Additional subcouncils were established in later years.

The council was led by Dr. C. Fred Bergsten, then the Director of the Institute for International Economics (now the Peterson Institute). Chairman Bergsten was elected by nongovernmental Council members at the first meeting. The council was composed of 12 members who were appointed through a well-crafted process dictated by statute that provided for quadrapartite and bipartisan representation. Specifically, there were three members from the business community, three from organized labor, three from federal or state government, and three from academia and public interest. Four members were appointed by the president, four by the Speaker of the U.S. House of Representatives and the Minority Leader acting jointly, and four by the Majority and Minority leaders of the U.S. Senate acting jointly.

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