![]() ![]() To explain this variation in more general terms, presidents can appoint either principals who have substantial experience and are likely supportive of the established procedures and policies or principals who have little or no experience and are likely more responsive to the new president’s desire to change the established procedures and policies. Whatever the President insisted on, would try to get-without regard to price.” As David Stockman, the director of the Office of Management and Budget, later remarked, Treasury Secretary Regan “operated on the ‘echo’ principle. Without any indoctrination in the established policies and procedures, Regan was more supportive of the president’s efforts to propose and implement major changes. In contrast to Clinton, Ronald Reagan came into office in 1981 and appointed Donald Regan, a banker with no previous experience in government, as Treasury secretary. As the president himself complained, the administration’s economic principals-particularly the Treasury secretary-were “incrementalists.” Due to his substantial experience in government, he was generally supportive of the established policies and procedures and therefore was often unsupportive of Clinton’s desire to propose and implement major changes. Bentsen was a sitting senator of more than two decades and the chairman of the Senate Finance Committee during the latter part of the Reagan administration and the whole of the Bush administration. Consider, for example, the Clinton and Reagan administrations.īill Clinton came into office in 1993 and appointed Lloyd Bentsen as Treasury secretary. ![]() Even though the Constitution and various statutes grant all presidents the same power of appointment, there is considerable variation in the effectiveness of this power in practice. In inheriting this highly decentralized economic policymaking environment, the next president should look more to the appointment power to help achieve his or her goals. “iscal policy in the United States remained frozen,” Paul Volcker, the chairman of the Federal Reserve, later explained, offering his assessment of the policymaking process by the second half of the 1980s. This was increasingly evident by the end of the Reagan administration. Consequently, the Federal Reserve’s influence over the economy has increased substantially as the president’s influence has decreased. Second, and operating in conjunction with the new, layered budgeting process, the rise of entitlement spending shackled fiscal policy, effectively diminishing its role as an economic stabilization instrument while strengthening the role of monetary policy. “At some point,” Stuart Eizenstat, the head of the Domestic Policy Staff, warned Carter, as the administration struggled to set a new course for the budget, “the line must be drawn in the sand if we are ever to be taken seriously in the budget process. ![]() This was evident, for example, by the end of the Carter administration. This is due largely to two major developments in the economic policymaking process.įirst, the Congressional Budget and Impoundment Control Act of 1974 layered a congressional-led budget process over the old presidential-dominated process, effectively diminishing presidential control even during periods of unified party control of the government. However, the next president will have substantially less control over the economy than his or her counterparts before the 1970s. Indeed, it is all but an official requirement following changes in the presidential nomination system during the 1970s that shifted control from party elites to regular party voters. Not surprisingly, most candidates routinely offer plans for improving economic mobility in particular or economic growth in general. That’s what it means to have an economy that works for everyone, not just those at the top.” How many Americans can find good jobs that support a middle class life …. How many children are lifted out of poverty. “Over the next ten years,” Donald Trump declared last September, “our economic team estimates that under our plan the economy will average 3.5% growth and create a total of 25 million new jobs.” Likewise, Hillary Clinton declared last June, “The measure of our success will be how much incomes rise for hardworking families. However, if the next president wants to improve the economy or otherwise accomplish his or her goals, he or she should focus on two key, and often ineffectively used powers: the appointment power and the agenda-setting power.īoth presidential candidates have already pledged to improve the economy in one way or another. It is essential for the next president to improve economic mobility, as discussed in the Volume 6: Opportunity and upward mobility essay, “Moving up” by Melody Barnes. ![]()
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