President's Council of Economic Advisors
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| Agency overview | |
|---|---|
| Formed | 1946 |
| Preceding agencies | |
| Headquarters | Eisenhower Executive Office Building |
| Employees | About 35 |
| Agency executive |
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| Parent agency | Executive Office of the President of the United States |
| Website | Council of Economic Advisers |
The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy. The CEA provides much of the objective empirical research for the White House and prepares the annual Economic Report of the President.
The Truman administration established the Council of Economic Advisers via the Employment Act of 1946, to provide presidents with objective economic analysis and advice on the development and implementation of a wide range of domestic and international economic policy issues. It was a step from an "ad hoc style of economic policy making to a more institutionalized and focused process". In 1949 Chairman Edwin Nourse and member Leon Keyserling argued about whether the advice should be private or public and about the role of government in economic stabilization.
Nourse believed a choice had to be made between "guns or butter" but Keyserling argued for deficit spending, an expanding economy could afford large defense expenditures without sacrificing an increased standard of living. In 1949, Keyserling gained support from Truman advisors Dean Acheson and Clark Clifford. Nourse resigned as chairman, warning about the dangers of budget deficits and increased funding of "wasteful" defense costs. Keyserling succeeded to the chairmanship and influenced Truman's Fair Deal proposals and the economic sections of National Security Council Resolution 68 that, in April 1950, asserted that the larger armed forces America needed would not affect living standards or risk the "transformation of the free character of our economy."
During the 1953–54 recession, the CEA, headed by Arthur Burns deployed non-traditional neo-keynesian interventions, which provided results later called the "steady fifties" wherein many families stayed in the economic "middleclass" with just one family wage-earner. The Eisenhower Administration supported an activist contracyclical approach that helped to establish Keynesianism as a possible bipartisan economic policy for the nation. Especially important in formulating the CEA response to the recession—accelerating public works programs, easing credit, and reducing taxes—were Arthur F. Burns and Neil H. Jacoby.
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