[Economic Report of the President (2007)]
[Administration of George W. Bush]
[Online through the Government Printing Office, www.gpo.gov]


 
Appendix A


REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 2006



LETTER OF TRANSMITTAL


COUNCIL OF ECONOMIC ADVISERS
Washington, D.C., December 29, 2006

MR. PRESIDENT:
The Council of Economic Advisers submits this report on its activities during calendar year 2006 in accordance with the requirements of the Congress, as set forth in section 10(d) of the Employment Act of 1946 as amended by the Full Employment and Balanced Growth Act of 1978.

Sincerely,

Edward P. Lazear, Chairman
Katherine Baicker, Member
Matthew J. Slaughter, Member




Council Members and Their Dates of Service


Name                  Position       Oath of office date  Separation date

Edwin G. Nourse..     Chairman        August 9, 1946      November 1, 1949.
Leon H. Keyserling    Vice Chairman   August 9, 1946
Acting Chairman November 2, 1949
Chairman        May 10, 1950        January 20, 1953.
John D. Clark         Member          August 9, 1946
Vice Chairman   May 10, 1950        February 11, 1953.
Roy Blough            Member          June 29, 1950       August 20, 1952.
Robert C. Turner      Member          September 8, 1952   January 20, 1953.
Arthur F. Burns       Chairman        March 19, 1953      December 1, 1956.
Neil H. Jacoby        Member          September 15, 1953  February 9, 1955.
Walter W. Stewart     Member          December 2, 1953    April 29, 1955.
Raymond J. Saulnier   Member          April 4, 1955
Chairman        December 3, 1956    January 20, 1961.
Joseph S. Davis       Member          May 2, 1955         October 31, 1958.
Paul W. McCracken     Member          December 3, 1956    January 31, 1959.
Karl Brandt           Member          November 1, 1958    January 20, 1961.
Henry C. Wallich      Member          May 7, 1959         January 20, 1961.
Walter W. Heller      Chairman        January 29, 1961    November 15, 1964.
James Tobin           Member          January 29, 1961    July 31, 1962.
Kermit Gordon         Member          January 29, 1961    December 27, 1962.
Gardner Ackley        Member          August 3, 1962
Chairman        November 16, 1964   February 15, 1968.
John P. Lewis         Member          May 17, 1963        August 31, 1964.
Otto Eckstein         Member          September 2, 1964   February 1, 1966.
Arthur M. Okun        Member          November 16, 1964
Chairman        February 15, 1968   January 20, 1969.
James S. Duesenberry  Member          February 2, 1966    June 30, 1968.
Merton J. Peck        Member          February 15, 1968   January 20, 1969.
Warren L. Smith       Member          July 1, 1968        January 20, 1969.
Paul W. McCracken     Chairman        February 4, 1969    December 31, 1971.
Hendrik S. Houthakker Member          February 4, 1969    July 15, 1971.
Herbert Stein         Member          February 4, 1969
Chairman        January 1, 1972     August 31, 1974.
Ezra Solomon          Member          September 9, 1971   March 26, 1973.
Marina v.N. Whitman   Member          March 13, 1972      August 15, 1973.
Gary L. Seevers       Member          July 23, 1973       April 15, 1975.
William J. Fellner    Member          October 31, 1973    February 25, 1975.
Alan Greenspan        Chairman        September 4, 1974   January 20, 1977.
Paul W. MacAvoy       Member          June 13, 1975       November 15, 1976.
Burton G. Malkiel     Member          July 22, 1975       January 20, 1977.



Council Members and Their Dates of Service


Name                    Position   Oath of office date  Separation date
Charles L. Schultze     Chairman   January 22, 1977     January 20, 1981.
William D. Nordhaus     Member     March 18, 1977       February 4, 1979.
Lyle E. Gramley         Member     March 18, 1977       May 27, 1980.
George C. Eads          Member     June 6, 1979         January 20, 1981.
Stephen M. Goldfeld     Member     August 20, 1980      January 20, 1981.
Murray L. Weidenbaum    Chairman   February 27, 1981    August 25, 1982.
William A. Niskanen     Member     June 12, 1981        March 30, 1985.
Jerry L. Jordan         Member     July 14, 1981        July 31, 1982.
Martin Feldstein        Chairman   October 14, 1982     July 10, 1984.
William Poole           Member     December 10, 1982    January 20, 1985.
Beryl W. Sprinkel       Chairman   April 18, 1985       January 20, 1989.
Thomas Gale Moore       Member     July 1, 1985         May 1, 1989.
Michael L. Mussa        Member     August 18, 1986      September 19, 1988.
Michael J. Boskin       Chairman   February 2, 1989     January 12, 1993.
John B. Taylor          Member     June 9, 1989         August 2, 1991.
Richard L. Schmalensee  Member     October 3, 1989      June 21, 1991.
David F. Bradford       Member     November 13, 1991    January 20, 1993.
Paul Wonnacott          Member     November 13, 1991    January 20, 1993.
Laura D'Andrea Tyson    Chair      February 5, 1993     April 22, 1995.
Alan S. Blinder         Member     July 27, 1993        June 26, 1994.
Joseph E. Stiglitz      Member     July 27, 1993
Chairman   June 28, 1995        February 10, 1997.
Martin N. Baily         Member     June 30, 1995        August 30, 1996.
Alicia H. Munnell       Member     January 29, 1996     August 1, 1997.
Janet L. Yellen         Chair      February 18, 1997    August 3, 1999.
Jeffrey A. Frankel      Member     April 23, 1997       March 2, 1999.
Rebecca M. Blank        Member     October 22, 1998     July 9, 1999.
Martin N. Baily         Chairman   August 12, 1999      January 19, 2001.
Robert Z. Lawrence      Member     August 12, 1999      January 12, 2001.
Kathryn L. Shaw         Member     May 31, 2000         January 19, 2001.
R. Glenn Hubbard        Chairman   May 11, 2001         February 28, 2003.
Mark B. McClellan       Member     July 25, 2001        November 13, 2002.
Randall S. Kroszner     Member     November 30, 2001    July 1, 2003.
N. Gregory Mankiw       Chairman   May 29, 2003         February 18, 2005.
Kristin J. Forbes       Member     November 21, 2003    June 3, 2005.
Harvey S. Rosen         Member     November 21, 2003
Chairman   February 23, 2005    June 10, 2005.
Ben S. Bernanke         Chairman   June 21, 2005        January 31, 2006
Katherine Baicker       Member     November 18, 2005
Matthew J. Slaughter    Member     November 18, 2005
Edward P. Lazear        Chairman   February 27, 2006



Report to the President on the
Activities of the Council of Economic
Advisers During 2006


The Council of Economic Advisers was established by the Employment Act
of 1946 to provide the President with objective economic analysis and
advice on the development and implementation of a wide range of
domestic and international economic policy issues.


The Chairman of the Council

Edward P. Lazear was appointed by the President on February 24, 2006
as Chairman of the President's Council of Economic Advisers.
Dr. Lazear succeeded Ben S. Bernanke, who was appointed by the
President as Chairman of the Federal Reserve Board on February 1,
2006.

Dr. Lazear is on a leave of absence from the Stanford Graduate School
of Business where he is the Jack Steele Parker Professor of Human
Resources Management and Economics. He also serves as the Morris
Arnold Cox Senior Fellow at the Hoover Institution.

Dr. Lazear is responsible for communicating the Council's views on
economic matters directly to the President through personal discussions
and written reports. He represents the Council at daily White House
senior staff meetings, a variety of inter-agency meetings, Cabinet
meetings, and other formal and informal meetings with the President.
He also travels within the United States and overseas to present
the Administration's views on the economy. Dr. Lazear is the Council's
chief public spokesperson. He directs the work of the Council and
exercises ultimate responsibility for the work of the professional
staff.

The Members of the Council

Katherine Baicker and Matthew J. Slaughter are Members of the Council
of Economic Advisers. Dr. Baicker is on leave from the University
of California in Los Angeles, where she is an Associate Professor
in the Department of Public Policy. She also served as a Faculty
Research Fellow for the National Bureau of Economic Research. At the
Council, Dr. Baicker's responsibilities include work on public
finance, labor, and health issues.
Dr. Slaughter is on leave from the Tuck School of Business at
Dartmouth College where he is an Associate Professor of Business
Administration. He also serves as a visiting Fellow at the Institute
for International Economics and has served as a Research Associate
at the National Bureau of Economic Research. Dr. Slaughter's
responsibilities at the Council include work on international
finance and trade, and industrial organization issues.


Macroeconomic Policies

As is its tradition, the Council devoted much time during 2006 to
assisting the President in formulating economic policy objectives
and designing programs to implement them. In this regard the Chairman
kept the President informed, on a continuing basis, of important
macroeconomic developments and other major policy issues through
regular macroeconomic briefings. The Council prepares for the
President, the Vice President, and the White House senior staff
regular memoranda that report key economic data and analyze current
economic events. Council staff also regularly provides assistance
with economic data to other offices of the Executive Office of the
President.

The Council, the Department of the Treasury, and the Office of
Management and Budget (OMB)_the Administration's economic ``troika''_
are responsible for producing the economic forecasts that underlie
the Administration's budget proposals. The Council, under the
leadership of the Chairman and the Chief Economist, initiates the
forecasting process twice each year. In preparing these forecasts,
the Council consults with a variety of outside sources, including
leading private sector forecasters.
In 2006, the Council took part in discussions on a range of
macroeconomic issues. The Council contributed significantly to
discussions of the macroeconomic impact of unexpected oil supply
shocks, the effects of a potential pandemic flu, and proposed
mitigation plans.

The Council works closely with the Department of the Treasury, the
Federal Reserve, and other government agencies in providing analyses
to the Administration on these topics of concern. It also works
closely with the National Economic Council, the Office of Management
and Budget, and other offices within the Executive Office of the
President in assessing the economy and economic policy proposals.

International Economic Policies

The Council was involved in a range of international trade and
finance issues, and was an active participant in discussions at the
global, regional, and bilateral levels. On the international trade
front, the Council provided empirical analysis of forthcoming free
trade agreements and the recently released top-to-bottom review of
U.S.-China bilateral economic relations spearheaded by the United
States Trade Representative. Staff also conducted a landmark study
exploring the prevalence and effects of non-tariff barriers in
conjunction with the Department of Commerce.

Further involvement included extensive analysis and participation
in deliberations related to the U.S. economic interaction with
China. The Council participated in the inaugural U.S. Treasury-led
Strategic Economic Dialogue in Beijing where a host of bilateral
economic issues with China were discussed, ranging from financial
liberalization, to energy and the environment, to bilateral trade
relations.

The Council participated in the development of U.S. proposals for
securing global energy security and combating the spread of pandemic
disease at this year's G8 Summit held in St. Petersburg, Russia. The
Council also prepared in-depth analyses for the President's
international itinerary, including the annual Asia-Pacific Economic
Cooperation (APEC) summit, and travel to Europe, India, and Mexico.
The Council participated in discussions concerning the need for
greater international financial and trade liberalization with both
advanced and emerging market economies. Council members regularly
met with representatives of the Council's counterpart agencies in
foreign countries, as well as with finance ministers, other government
officials, and members of the private sector.

The Council is a leading participant in the Organization for
Economic Cooperation and Development (OECD), the principal forum
for economic cooperation among the high-income industrial economies.
Chairman Lazear and Dr. Slaughter participated in meetings of the
OECD's Economic Policy Committee (EPC), as well as meetings of the
OECD's Working Party 3 on macroeconomic policy and coordination.

Microeconomic Policies

A wide variety of microeconomic issues received Council attention
during 2006. The Council actively participated in the Cabinet-level
National Economic Council and Domestic Policy Council, dealing with
issues including health care, labor issues, energy policy, legal
reform, the environment, homeland security, education, pensions,
transportation, and technology among others.

The Council was involved in a plethora of discussions related to
health care. These included examination and policy proposals relating
to the tax treatment of health insurance, analysis and development
of Administration efforts to enhance Health Savings Accounts,
analysis of potential Medicare and Medicaid reforms, and promotion
of transparency in health price and quality. The Council investigated
the causes and consequences of rising health care costs and examined
potenial remedies including greater consumer involvement in health
care, opening access to insurance across state lines, Association
Health Plans, and encouraging high quality health care when the
government is the payer.

The Council was also especially active in energy and environmental
policy discussions, where it analyzed energy markets, fuel economy
issues, and alternatives to oil. This included issues such as the
President's Advanced Energy Initiative, bio-energy, the Outer-Continental
Shelf, the Renewable Fuels Standard, CAFE, the Strategic Petroleum
Reserve, regulatory reforms, global climate change, and the
international trade of energy.

The Council examined transportation policies relating to airports,
hybrid vehicles, and congestion pricing. The Council also played a
role in the analysis of policy for telecommunications, broadband, and
spectrum allocation. Council staff also provided analyses related to
agricultural issues.

The Council participated in discussions related to catastrophic risk
insurance relating to natural disasters and attacks. The Council also
participated in ongoing policy discussions relating to the
government's role in terrorism risk insurance.

On labor policy, the Council was involved in the development of the
President's comprehensive immigration policy and other proposed
immigration reforms. The Council also assisted in Administration
evaluation of higher education policies, as well as in the examination
of the No Child Left Behind program.

The Council was active in tax policy discussions relating to
comprehensive tax reforms, business tax credits, and corporate
taxation, as well as tax issues related to entitlement programs
such as Social Security. Many additional tax policy discussions
were involved in other microeconomic discussions including labor,
insurance, pensions, and health care.


The Staff of the Council of Economic Advisers

The professional staff of the Council consists of the Chief of Staff,
the Chief Economist, the Director of Macroeconomic Forecasting, eight
senior economists and one economist, and seven junior staff of
analysts and research assistants. The professional staff and their
areas of concentration at the end of 2006 were:




Chief of Staff
Gary D. Blank



Chief Economist
Keith Hall



Director
of
Macroeconomic Forecasting and Statistics
Steven N. Braun



Senior Economists
William J. Collins .   Labor, Immigration, Education, Welfare
Erik A. Heitfield ..   Finance, Telecommunications
Bradley J. Herring..   Health
Kristin McCue ......   Labor, Small Business, Economic Development
Robert F. Martin ...   Macroeconomics, International Finance and Development
Christine A. McDaniel..International Trade
David P. Richardson... Public Finance
Wolverton, Maryann.... Agriculture, Environment, Natural Resources



Economist
Benjamin T. Ho ................ Energy, Transportation, Legal Reform




Analysts
Dagmara K. Tchalakov...... International Finance and Trade
Diana C. Wielocha......... Public Finance, Finance, Legal Reform
Jonathan A. Wolfson ...... Health


Research Assistants
Eric B. Cragun........ Labor, Macroeconomics
Nikola D. Kojucharov.. Macroeconomics
Gregory E. Stein...... Energy, Transportation, Environment, Agriculture
Lucas D. Threinen .... International Finance and Trade, Technology


Statistical Office
The Statistical Office maintains and updates the Council's statistical
information, oversees the publication of the monthly Economic
Indicators and the statistical appendix to the Economic Report of
the President, and verifies statistics in Presidential and Council
memoranda, testimony, and speeches.

Linda A. Reilly............. Program Analyst (Statistical)
Brian A. Amorosi ........... Program Analyst (Statistical)
Dagmara A. Mocala .......... Research Assistant

Linda Reilly retired from Federal service on December 29, 2006. She
had worked at the Council for 36 years and had been with the
Statistical Office since 1981. Linda's dedication to the Council
has been extraordinary, and her knowledge of statistics and their
applications are greatly appreciated by CEA staff past and present.


Administrative Office
The Administrative Office provides general support for the Council's
activities. This includes financial management, human resource
management, and travel, facility, security, information, and
telecommunications management support.

Rosemary M. Rogers ......... Administrative Officer
Archana A. Snyder .......... Financial Manager
Doris T. Searles ........... Information Management Specialist


Office of the Chairman
Alice H. Williams.............. Executive Assistant to the Chairman
Sandra F. Daigle............... Executive Assistant to the Chairman
and Assistant to the Chief of Staff
Lisa D. Branch................. Executive Assistant to Dr. Slaughter
Mary E. Jones ................. Executive Assistant to Dr. Baicker


Staff Support
Sharon K. Thomas ............Administrative Support Assistant and
Assistant to the Chief Economist


Jane Tufts and Anna Paganelli provided editorial assistance in the
preparation of the 2007 Economic Report of the President.
Student Interns during the year were: Daniel M. Cohen, Shana N.
Dougherty, Stacy L. Droms, George Kim, Bryan C. Hoppe, Grace C. Hou,
Lindsay A. Philbrick, Joni Perdue, Jennifer Scallion, Timothy Simmons,
Michael S. Verne, and Sajid S. Zaidi.
Fellows during the year were:  Michael Chow and Therese C. Scharlemann.


Departures
The Council's senior economists, in most cases, are on leave of
absence from academic institutions, government agencies, or private
research institutions. Their tenure with the Council is usually limited
to one or two years. The senior economists who resigned during the
year and returned to their previous affiliations were: John Anderson
(University of Nebraska), William Block (Department of the Treasury),
Daniel Covitz (Federal Reserve Board), Joseph Cooper (Department of
Agriculture), William H. Dow (University of California, Berkeley),
Wayne Dunham (Department of Justice), Dino Falaschetti (Montana State
University), and Richard Newell (Resources for the Future).
Rebecca Kalmus, an economist, resigned to pursue studies at the
University of Texas.
The economists are supported by a team of junior staff made up of
staff economists, analysts, and research assistants who generally work
with the Council for one or two years before returning to school.
Those who served as staff economists at the Council and resigned during
2006 were: Soren Anderson, Faisal Z. Ahmed, and Andrew Hanson. Those
who served as research assistants at the Council and resigned during
2006 were: Jeffrey P. Clemens and Sarena F. Goodman.


Public Information

The Council's annual Economic Report of the President is an important
vehicle for presenting the Administration's domestic and
international economic policies. It is available for distribution
as a bound volume and on the Internet, where it is accessible
at www.gpoaccess.gov/eop. The Council also publishes the monthly
Economic Indicators, which is available on-line at
www.gpoaccess.gov/indicators. The Council's home page is located
at www.whitehouse.gov/cea.