[Economic Report of the President (2008)]
[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 2007




LETTER OF TRANSMITTAL

Council of Economic Advisers
Washington, D.C., December 31, 2007

Mr. President:
The Council of Economic Advisers submits this report on its activities
during calendar year 2007 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





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

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    July 11, 2007
Matthew J. Slaughter  Member           November 18, 2005    March 1, 2007
Edward P. Lazear      Chairman         February 27, 2006


Report to the President on the
Activities of the Council of Economic Advisers During 2007

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 continued to chair the Council during 2007.
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 served 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

The Council's two other Members were Katherine Baicker who left
the Council in July 2007 to become Professor of Health Economics
in the Department of Health Policy and Management at Harvard School
of Public Health, and Matthew J. Slaughter who left the Council in
March 2007 to return to the Tuck School of Business at Dartmouth
College as Associate Professor of Business Administration.
The President nominated Dennis W. Carlton and Donald B. Marron to
fill these two vacancies.

Macroeconomic Policies
As is its tradition, the Council devoted much time during 2007 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 within the Executive Office of
the President.
The Council, the Department of the Treasury, and the Office of
Management and Budget-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 2007, the Council took part in discussions on a range of
macroeconomic issues. The Council contributed significantly to
discussions on the macroeconomic impact of this year's housing
and credit market disruptions, and provided analysis and support
for the Administration's economic growth package.
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 Domestic
Policy 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, including the U.S. Trade
Policy Review, conducted by the World Trade Organization. On the
international trade front, the Council provided empirical analysis
of forthcoming free trade agreements and met with policymakers and
business leaders in support of the Peru, Colombia, Panama, and
South Korea free trade agreements.
Further involvement included extensive analysis related to U.S.
economic interaction with China. The Council provided analysis
for the Department of the 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 also prepared in-depth analyses for the President's
international itinerary, including travel to the Middle East and
Europe, as well as the annual Asia Pacific Economic Cooperation
(APEC) summit in Australia.
In the area of investment and security, the Council took part in
discussions on the implementation of the Foreign Investment and
National Security Act of 2007, which clarified and improved the
operations of the Committee on Foreign Investment in the
United States (CFIUS). The Council also participated in
discussions of individual cases before CFIUS.
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 economists and policy officials of foreign countries,
finance ministers, other government officials, and members of the
private sector to discuss prevailing issues relating to the global
economy.
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, along with other senior Council members,
participated in the OECD's Economic Policy Committee (EPC) meeting,
as well as the Working Party meetings on macroeconomic policy
and coordination.


Microeconomic Policies

A wide variety of microeconomic issues received Council attention
during 2007. The Council actively participated in the Cabinet-level
National Economic Council and Domestic Policy Council meetings,
dealing with issues including health care, labor, energy policy,
legal reform, the environment, education, pensions, transportation,
and technology.
The Council was active in the examination of health care policy related
to the tax treatment of health insurance, health information
technology adoption, health insurance for children, veterans health,
potential reforms to Medicare, and the promotion of transparency in
health price and quality. The Council examined the causes and
consequences of rising health care costs and reviewed potential
remedies including greater consumer involvement in health care,
opening access to insurance across state lines, and improving the
connection between health care expenditure and positive health outcomes.
The Council was also 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 Renewable Fuels Standard,
Corporate Average Fuel Economy (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 examined agricultural
issues and patent reform.
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
individual income tax, business tax credits, and corporate taxation,
as well as tax issues related to entitlement programs like 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, the
Director of the Statistical Office, nine senior economists, and
seven junior staff of staff economists, analysts and research
assistants. The professional staff and their areas of concentration
at the end of 2007 were:


Chief of Staff
Pierce E. Scranton

Chief Economist
Keith Hall

Consultant
Donald B. Marron

Director of                   Director
Macroeconomic Forecasting	Statistical Office
Steven N. Braun                  Adrienne T. Pilot

Senior Economists
Scott Baier ................  International Finance
Erik Durbin ................  Legal, Transportation, Regulation
Charles Griffiths ..........  Agriculture, Environment, Natural Resources
Daniel E. Polsky ...........  Health
Korok Ray ..................  Public Finance, Technology
Dan Rosenbaum ..............  Labor, Immigration, Education, Welfare
Howard Shatz ...............  International Trade
Sita Slavov ................  Tax, Budget
John Stevens ...............  Macroeconomics, Labor, Small Business

Staff Economist
Elizabeth Akers ............  Labor

Analyst
Kristopher J. Dawsey		Macroeconomics

Research Assistants
Mark W. Clements ...........  International Finance and Trade
Joshua K. Goldman ..........  Microeconomics and Regulation
Elizabeth M. Schultz .......  International Finance and US Finance/Banking
Brian T. Waters ............  Public Finance and Macroeconomics
Chen Zhao ..................  Health and Labor

Statistical Office
The Statistical Office administers and updates the Council's
statistical information. Duties include preparing material for and
overseeing publication of the monthly Economic Indicators and the
statistical appendix to the Economic Report of the President.
Staff verifies statistical content in Presidential memoranda and
produces background materials for economic analysis. The Office
also serves as the Council's liaison to the statistical community.

Brian A. Amorosi ..........  Program Analyst
Dagmara A. Mocala .........  Program Analyst

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

Rosemary M. Rogers .......  Administrative Officer
Archana A. Snyder ........  Financial Officer
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 the Member
Mary E. Jones ............  Executive Assistant to the Member

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

Gary Blank, who served as Chief of Staff, left the Council in August
of 2007 to accept a position with Fidelity Investments as Vice President,
Policy Analysis.
Jane Tufts, Bruce Kaplan, and Anna Paganelli provided editorial
assistance in the preparation of the 2008 Economic Report of the
President.
Student Interns during the year were: Aaron Epstein,
Elisabeth E. Fosslien, Marc Held, Jonathan Jardine, Ashley Jelinek,
Kyle Jurado, Jessica Levy, Danyank Lok, Robin Lyu, David Marold,
Anthony Ng, Ethan Parker, Jeannine Regalia, William Ross, Kyle Smith,
and Zachary Watson.
Our Fellow during the year was Deepa Dhume.

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 1 or 2 years. The senior economists who resigned during
the year were: William Collins (Vanderbilt University), Erik Heitfield
(Federal Reserve Board), Bradley Herring (Emory University),
Christine McDaniel (Department of the Treasury), Kristin McCue
(Census Bureau), Robert Martin (Federal Reserve), David Richardson
(TIAA-CREF), and Maryann Wolverton (EPA). The economist who resigned
during the year was Benjamin Ho (Cornell University).
The economists are supported by a team of junior staff made up of
analysts and research assistants who generally work with the Council
for 1 or 2 years before returning to school or other endeavors. The
analysts who resigned during 2007 were: Dagmara Tchalakov,
Lucas Threinen, Diana Wielocha, and Jonathan Wolfson. Those who served
as research assistants at the Council and resigned during 2007 were:
Eric Cragun, Nikola Kojucharov, and Gregory Stein.

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 purchase through the Government
Printing Office, and is viewable on the Internet 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.