What Is the Council of Economic Advisers (CEA)?
The Council of Economic Advisers (CEA) advises the President on macroeconomic matters and is comprised of a chairman and two other members. The CEA’s aim is to advise and formulate economic policy for the White House and to ensure that all government departments promote the economic agenda of the executive branch.
- The Council of Economic Advisors (CEA) is an organization of leading economists who advise the president on matters of economic, monetary, and fiscal policy.
- The CEA is intended to be a non-partisan group to advocate the best course of action for American economic policy regardless of party politics.
- Historically, the CEA has favored Keynesian economics, advocating for running deficits to stimulate the economy during recessions and free trade.
Understanding the Council of Economic Advisers (CEA)
The Council of Economic Advisers is comprised of three notable economists; they are a chairman, and two other members, each of whom is appointed by the President and approved by the Senate. Past chairmen of the CEA include former Federal Reserve Chairmen Alan Greenspan and Ben Bernanke, and former Federal Reserve Chairman, and current Biden administration Treasury Secretary Janet Yellen. Although many former members of the CEA have gone on to the Federal Reserve, the CEA is not tasked with determining monetary policy.
The CEA helps the president prepare the annual Economic Report that provides an overview of the nation's economic progress, analyzes economic developments, reviews federal government policies and programs to make sure they promote solid economic policy and recommend policies that support American workers.
The Council of Economic Advisers (CEA) Under President Biden
President Joe Biden nominated Cecilia Rouse to chair the CEA, who was confirmed by the Senate on March 3, 2021, and sworn in on March 12, 2021. He has also nominated 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 previously as a member of President Obama's Council of Economic Advisers from 2009–2011.
Bernstein was 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 Council of Economic Advisers (CEA) Under President Trump
Acting CEA chair Tyler Goodspeed was selected by former President Donald Trump to lead the CEA in June 2020 following the resignation of the previous acting CEA chair, Tomas J. Philipson. Goodspeed is an American academic historian. Like Philipson, Goodspeed was a member of the Council of Economic Advisers at the time he was nominated to become the chair. Goodspeed resigned on Jan. 7, 2021.
Prior to Goodspeed, the CEA had another acting chair, Swedish-born American economist Tomas J. Philipson, who was tapped by Trump to lead the organization in late June 2019 after serving as a member of the Council of Economic Advisers since 2017. Philipson held the position until the end of June 2020.
Philipson replaced Kevin Hassett, a fiscal conservative and former policy advisor with Presidents George H.W. Bush and 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 Council of Economic Advisers produces an annual report, "The Economic Report of the President," which summarizes its views on the past year, and offers a forecast for the coming year.
History of the Council of Economic Advisers (CEA)
The CEA was formed during the Truman administration with the Employment Act of 1946 and initially promoted a Keynesian bent, referencing the economic vision of John Maynard Keynes and central to New Deal economic policies in the United States.
As per the current Biden administration, the CEA is "charged with advising the President on economic policy based on data, research, and evidence." To that goal, the President has nominated a group of liberal economists, including chair Cecilia Rouse.
During the Trump administration, the CEA took a more conservative bent than in previous years and the chairman was removed from a cabinet-level position. However, President Biden has made the chair cabinet-level again.
Council of Economic Advisers (CEA) vs. National Economic Council (NEC)
The Council of Economic Advisers (CEA) is a key resource for economic issues between the White House and the executive branch and economic policymakers within Labor, Commerce, and other government agencies. The CEA is part of the Executive Office of the President and the chair is currently 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 President 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, needing a Senate confirmation.
The NEC Director is tasked with coordinating and putting in play the President's economic policy agenda, in conjunction with a number of the administration's department and agency heads.
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. Prior to that, Deese held several positions in the Obama administration, including the special assistant for economic policy to President Obama.
Council of Economic Advisers (CEA) FAQs
Why was the council of economic advisers created?
The Council of Economic Advisers was created as part of the Employment Act of 1946, with the intention of having a group of economic experts to make sure that the U.S. didn't sink into another Great Depression after World War II ended.
What does the council of economic advisers do?
The CEA advises the president on fiscal policy. They are tasked with providing unbiased economic analysis and usually come from an academic background. They are supported by a team of economists with expertise in areas such as international trade, labor, and health care.
Who are the current members of the council of economic advisers?
President Biden has nominated Cecelia Rouse to chair the CEA. The Senate Banking Committee held a hearing for her but has not yet voted on whether to advance her nomination. Jared Bernstein and Heather Boushey have also been nominated as members.
What is the role of the CEA in the budget process?
The CEA prepares an annual Economic Report that is released each February that provides detailed insight into the state of the economy and its growth prospects. The report summarizes and analyzes the economy's performance over the previous year, using data and analysis, and forecasts its growth for the year ahead. The report provides the critical economic background that supports the president's yearly budget.
The Bottom Line
The Council of Economic Advisers (CEA) is an agency that advises the President on matters of economic policy. It consists of a chairman and two members and is supported by a group of economists with expertise in different areas of the economy.
The CEA prepares the annual Economic Report that both 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.