NCPA - National Center for Policy Analysis


November 29, 2004

The National Economic Council is an unnecessary layer of bureaucracy that adds little to the implementation of economic policy. Indeed, the NEC has tended to get in the way, making it harder for established agencies like the Treasury Department and Council of Economic Advisers to do their jobs, says Bruce Bartlett.

The NEC was created by the Clinton Administration. It grew out of a campaign promise by Clinton in 1992 to elevate the stature of economic policy to that of foreign and defense policy in the White House. Toward that end, he proposed establishing an economic organization equivalent to that of the National Security Council.

The problem is that the nature of economic policy does not lend itself to the same organizational structure required for foreign and defense policy, explains Bartlett:

  • The NSC is needed to mediate the institutional policy disputes that inevitably exist in every administration between the State Department and Defense Department.
  • Moreover, the nature of foreign and defense policy makes it extremely time-sensitive and generally involves secret data and materials that demand special procedures.

Furthermore, the kind of institutional conflict that exists between State and Defense has no counterpart among economic agencies. They may have different roles and opinions, but are not inherently at loggerheads with each other, requiring a specialized agency to mediate the ongoing conflict, says Bartlett.

With the recent departure of NEC Director Stephen Friedman and the vacancy created by the promotion of Office of Policy Development Director Margaret Spellings to Secretary of Education, President Bush should use this opportunity to merge the NEC and OPD. It would improve economic policy and make it easier for the President to pursue issues like tax and Social Security reform, says Bartlett.

Source: Bruce Bartlett, "National Economic Council is Unnecessary," National Center for Policy Analysis, November 29, 2004.


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