Sunday, November 11, 2012

A thought on presidential economic power.

There is an interesting article by Bruce Bartlett, a former senior economist at the White House, US Congress and Treasury. He points out that, although in the presidential election campaign both candidates ran promising to restore economic growth, the president actually has limited power to do so.

The Constitution places the main responsibility for the federal budget in the Congress. The executive branch prepares a budget proposal, but the Congress makes the actual decisions on appropriations. The president's power over the budget proposal is itself limited. He depends on a few thousand political appointees, largely drawn from his party leadership, to lead the huge government bureaucracy in preparing that budget, but there are limits both to any one man's ability to master the details of the budget and to oversee his political appointees and through them the departments of government.

Moreover, financial policy is largely under the authority of an independent Federal Reserve system. Moreover, the judicial branch can in some situations intervene, as when the Supreme Court decides that presidential action is unconstitutional.

The article perhaps underestimates the influence of the president. The president has "the bully pulpit" and can inform the public and go to the public for support of his policies. As mentioned above, he does lead a cadre of thousands of political appointees who have been selected to share his views, especially his views on economic and foreign policy. Moreover, the bureaucracy in my experience is filled with professionals who generally seek to implement the people's will as expressed through their choice of their elected officials. The president is also the leader of his party, and in the coming Congress President Obama's party will have a majority in the Senate and a large minority in the House of Representatives.

I suppose that President Obama will have significant influence in his effort to avoid the fiscal cliff, and in the development of policies intended to continue recovery from the Great Recession in the very short term and to reduce the federal deficit in the next 10 or 15 years.

I think he may have still greater influence in the longer term strategies

  • to assure institutions and policies conducive to the creation of new enterprises in the United States
  • to develop the basis in scientific knowledge needed to underlie new technology, and indeed in assuring technological leadership by the agencies of the federal government
  • to educate our citizens, both to provide a 21st century workforce and an informed electorate
  • to help assure the continued development of a strong national infrastructure and
  • to provide the security needed for these developments in a nation at peace.

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