The Presidency and Political Change

At a time when the president is attempting a drastic change in economic policy, it is appropriate to examine the development of his role in economic policy. As in so many other aspects of the modern presidency, the administration of Franklin D. Roosevelt is the watershed. He expanded the president's role as economic policymaker in an unchallenged executive response to the crisis of the Depression. The institutionalization of that role was a process involving several stages that unfolded in succeeding administrations. One stage was the role's definition and legitimation by Congress in the Employment Act of 1946, which defined a new governmental commitment to economic intervention to achieve maximum employment. The same act created the Council of Economic Advisers (CEA) and placed it in the Executive Office of the President. Since then, the CEA has played a vital part in economic policy. Its importance contributed to a train of economic policy staff agencies that grew as the president's economic policy role expanded with the emergence of such new problems as economic growth, poverty, inflation, stagflation, and foreign economic policy. Throughout this evolution, a constituency of economic policy crystallized, which contributed to the institutionalization of the president's role. President Reagan's efforts to reverse economic policy direction may be difficult, because some of the political institutional supports his predecessors could rely on have undergone considerable change and are now problematical.