National Economic Council (nec)

The National Economic Council is one of the policy councils serving the President along with the NSC and the Domestic Policy Council (DPC). The Director serves as principal adviser to the President on domestic and international economic policy and communicates the President’s economic message to the media.

The Deputy Director is responsible for the day-to-day operation of the council, which includes chairing the committee that coordinates economic policy development at the Deputy Secretary level. In effect, the Director and Deputy Director are the officials who are primarily responsible for the development of economic policymaking for the Administration. Once a policy is adopted, it is the appropri- ate agency’s responsibility to implement it. The NEC’s policy process is also used to determine whether the President should support or oppose legislation passed by Congress.

In addition to its leadership, the NEC has policy experts (for example, Special Assistants to the President or SAPs) who are responsible for developing and coor- dinating, as well as advising the President, on specific issues. It is essential that the policy expertise of the NEC reflect the current environment’s most pressing issues. Today, this would include (among other topics) taxes, energy and envi- ronment, technology, infrastructure, health care, financial services, workforce, agriculture, antitrust and competition policy, and retirement programs. NEC’s SAPs should have a working knowledge of how the Administration can implement policy through the rulemaking process, although it is not necessary that they be experts on regulation themselves, particularly given OMB’s role. This will facilitate the NEC’s effectiveness in coordinating Administration policy.

The NEC needs to work closely with other offices within the Executive Office of the President to promote innovation by the private sector and create an envi- ronment that will stimulate economic activity while reducing federal spending and debt. This includes working with the DPC, NSC, OMB, Council of Economic Advisers, Office of Intergovernmental Affairs, Office of Cabinet Affairs, White House Counsel, Council on Environmental Quality, Office of Legislative Affairs,

and Office of Science and Technology Policy. To this end, the NEC Director should chair a standing meeting with the principals from each of the other EOP offices to enhance coordination from within the White House. In the past, there has been tension among the DPC, NEC, and NSC over juris- diction. It is important to set clear jurisdictions at the start of an Administration to prevent needless and counterproductive turf fights. In addition, the Principal Deputy for international economic policy is jointly appointed at NEC and NSC and could end up serving two different interests. To avoid such problems, international economic policy should be entirely coordinated from NEC.

It will be especially important for the NEC to work seamlessly with the Council of Economic Advisers (CEA), which provides the President and the White House offices with the latest economic data and forecasts, as well as estimates of the eco- nomic impact of proposed policies, and prepares the annual Economic Report of the President. The CEA is not a policy council and therefore does not run policy processes, which is the responsibility of the NEC, DPC, and NSC. However, the CEA does play a key role in ensuring that any policy considered by the councils is rigorously evaluated for its economic impacts.

The NEC works closely with the White House Office of Communications and Office of Speechwriting to ensure that the White House’s messaging and media engagement communicate the President’s economic policy effectively. The NEC also plays a key role in advancing the President’s economic agenda by advising the Office of Presidential Personnel on appointments to key economic posts, including positions in financial regulatory agencies. The NEC helps to ensure that each economic post is held by a person who shares the President’s policy pri- orities and works well with the rest of the Administration’s economic team. The financial regulators are run partly by civil servants (some of whom were politi- cal appointees in prior liberal Administrations) who often resist a conservative Administration’s policies. It is therefore critical that an Administration not only appoints capable individuals to lead these agencies, but also has personnel who can be hired into senior staff positions within the agencies.

A few areas will be especially important if the NEC is to develop a well-defined economic policy agenda. One is the promotion of innovation as a foundation for economic growth and opportunity. Another is the creation of an environment that fosters economic growth through tax reform and the elimination of regulatory and procedural barriers.

OFFICE OF THE U.S. TRADE REPRESENTATIVE (USTR)

The Office of the U.S. Trade Representative provides the President with the internal White House resources necessary to formulate and execute a unified, whole-of-government approach to trade policy. The President should ensure that the USTR is empowered to serve in that leadership role, much as other EOP components organize and drive a coordinated policy agenda on behalf of the President.

The People’s Republic of China’s predatory trade practices have disrupted the open-market trading system that has provided mutual benefit to all participating countries—including China—for decades. The failure of the World Trade Organi- zation (WTO) to discipline China for abrogation of its trading commitments has seriously undermined its credibility and made it a largely ineffective institution. The United States, through an empowered USTR, must act to rebalance and refocus international trading relationships in favor of democratic nations that embrace free, fair, and open trade principles built on market-driven economies. Chapter 26 of this book outlines recommended trade policy priorities for the incoming President. However, regardless of the approach, successful implemen- tation of that trade agenda will require the President to articulate a clear policy direction and instructions for the executive branch to operate in a coordinated fashion under the leadership of an empowered USTR.

To address these and other challenges, protect the American worker, and secure free and open markets for our communities and businesses, the next President must leverage the institutional resources and strength of the USTR and neither allow institutional interests to drive a fragmented trade policy that is developed from the ground up nor cater to parochial interests across government and Wash- ington’s broader industry of influence.

The USTR’s mission is vitally important in reorienting the global trading system in a direction that is open, fair, and prosperous. In order to achieve the President’s policy goals, a strong USTR must be empowered to set trade policy from the White House with the authority and resources to represent the interests of the Presi- dent’s trade agenda with adequate budget, staff, analysis, and expertise to engage meaningfully in internal and interagency policy deliberations. The USTR should organize and harness existing interagency trade committees to serve the Presi- dent’s trade agenda and drive a consensus among federal stakeholders, dispose of legacy advisory committees with members who serve special interests, direct action to implement policy priorities, measure progress toward implementing the President’s agenda, and hold agencies and officials accountable for delivering the President’s agenda. The USTR’s leadership should not only coordinate and enforce the President’s agenda across the federal community, but also set and enforce the President’s trade agenda internally.

Trade policy and priorities should be set by the President and implemented by the U.S. Trade Representative in cooperation with the other economic and national security officials, not by the range of governmental and nongovernmental interests that attempt to force their policy preferences on the USTR. A strong USTR empow- ered with the necessary resources, authorities, and interagency cooperation will protect U.S. interests in the global marketplace more effectively.

COUNCIL OF ECONOMIC ADVISERS (CEA)

Congress established the Council of Economic Advisers in 1946 to advise the President on economic policy based on data, research, and evidence. The CEA is one of the oldest congressionally created offices within the White House complex and plays a broad role in bringing economic expertise to Administration policy across a large range of policy areas. The CEA has one presidentially appointed and Senate-confirmed chair, two presidentially appointed members who assist and often have expertise that complements the chair, and approximately 40 staff employees.

Statutorily, the CEA is charged with being the President’s principal source of economic advice. However, this role has diminished over time as its policy appraisal and especially formulation and recommendation functions have been taken over or diluted by other economic policy bodies within the White House. By law, the CEA is required to publish an annual Economic Report of the President within 10 days after submission of the budget. This report is not just a messaging document; it is an opportunity to provide greater rigor in support of policy areas that the White House is prioritizing and to build up the external credibility of those ideas.

A future conservative Administration should utilize the CEA as the senior inter- nal White House economists much as the White House Counsel’s office functions as the senior internal White House lawyers. This does not mean that there are no economists in other offices. There are, just as there often are lawyers in the policy councils and other White House offices, but the CEA’s role, like the White House Counsel’s, is to employ its unique expertise (particularly on the technical side) to ensure that sound analysis is contributing to and shaping the policy discussion. In practice, this means that CEA staff do not “coordinate” the policy process in the way that the DPC or NEC would, but they should be integral to the EOP’s policy development processes. CEA staff should support sound policy development and execution by actively contributing to running policy dialogues, proactively raising issues that need to be addressed, consulting on questions that arise, and guiding EOP and agency officials on the analytical foundations of policy. Structurally, the White House Chief of Staff should ensure that the CEA has a seat at the policymak- ing table on all relevant policy.

Senior economists traditionally have not gone through the Office of Presidential Personnel process and more often than not are hired on an academic-year cycle. As a result, senior economists hired in the summer of a presidential election year tend to remain on staff until the next summer even if a President from the opposite party takes power and installs a new slate of CEA political appointees for chair, members, etc. Although these hiring practices create some continuity, the presence of senior economists who were never fully vetted for their alignment with White House policy objectives or who were holdovers from a recently departed Administra- tion can breed skepticism and distrust of the CEA by other units within the White

House, creating the risk that the CEA’s role in the policymaking process will be diminished. A future Administration should consider hiring that reflects the White House calendar (mid-January) and involves the Office of Presidential Personnel.