544544 Chapter 15 | Economic PolicyAs we discussed in Chapter 12, the president is unable to accomplish much single-
handedly on the economic front: Congress, the Fed, and broader domestic and
international economic forces all exert an equal or greater influence on the health of
the economy. However, the executive branch has a large advising structure that helps
the president formulate economic policy. The Office of Management and Budget
(OMB), the Council of Economic Advisers (CEA), the Office of the United States
Trade Representative (USTR), and the National Economic Council (NEC) all provide
important economic advice.
The department with the longest track record is the OMB. It plays a central role
in creating the budget by soliciting spending requests from all federal agencies,
suggesting additional cuts, and then coordinating these requests with presidential
priorities. It is ultimately responsible for putting together the president’s budget, which
is then submitted to Congress. The OMB also oversees government reorganization
plans and recommends improvements in departmental operations.
The CEA was created by the Employment Act of 1946. Its central function is to
provide the president with objective data on the state of the economy and expert
advice on economic policy. The agency is responsible for creating the Annual Economic
Report of the President, which has a wealth of data on various aspects of the economy
and an overview of the president’s policies. Presidents have varied in how closely they
work with the CEA or the other parts of their economic team. Some prominent CEA
members have been influential in shaping and promoting the administration’s tax
policy and jobs program. Others have had a more secondary role.United States Trade
Representative (USTR)
An agency founded in 1962 to
negotiate with foreign governments
to create trade agreements, resolve
disputes, and participate in global
trade-policy organizations. Treaties
negotiated by the USTR must be
ratified by the Senate.National Economic Council
(NEC)
A group of economic advisers created
in 1993 to work with the president to
coordinate economic policy.The president and his advisers on
trade policy, including the U.S. trade
representative (Robert Lighthizer,
right) must coordinate with Congress
on economic policy making. Here,
Lighthizer, Canadian minister of
foreign affairs Chrystia Freeland
(left), and Mexican economy minister
Idelfonso Guajardo (center) address
the media during NAFTA talks in
Mexico City. President Trump made
it a priority to renegotiate this trade
agreement.The USTR is responsible for developing and coordinating U.S. international trade,
commodity, and direct investment policy and for overseeing negotiations on trade
policy with other countries.^21 With the increasing importance of globalization and
international trade, and Congress’s deference to the executive branch on trade issues
through the fast-track authority, the USTR is an important player in economic policy
making. The fast-track process gives the USTR wide latitude to negotiate trade deals
that have to be approved by Congress but cannot be amended or filibustered.
The NEC was established in 1993 to fulfill a campaign promise by President Clinton
to elevate economic policy to the level of national security and foreign policy. It hasFull_16_APT_64431_ch15_530-571.indd 544 15/11/18 2:34 PM