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News Release

White House National Economic Council Needs More Regular Procedures and More Consistent Presidential Support

November 6, 1996

Contact:    I. M. Destler    (202) 328-9000

Washington, DC—President Clinton's National Economic Council (NEC) has been a "qualified success" and should be continued in his second term. But it has failed to institutionalize the coordination of domestic and international economic policy, and its "botched transition" from initial director Robert Rubin to successor Laura Tyson dealt it a "devastating blow, from which it never fully recovered." President Clinton needs to take a number of steps to strengthen his ties to the NEC and regularize its procedures.

In creating the NEC four years ago, Bill Clinton became the first newly elected President to launch a new staff operation in his area of highest substantive priority since Richard Nixon ordered transformation of the National Security Council under Henry Kissinger. In The National Economic Council: A Work in Progress, I. M. (Mac) Destler offers a comprehensive analysis of its performance to date. Drawing on interviews with NEC officials and numerous others, the author recounts:

  • the NEC's fast and effective start in organizing the development of Clinton's initial economic plan in 1993;

  • its important role in coordinating decisions on fast- breaking trade negotiations such as NAFTA, the Uruguay Round, and the market-opening talks with Japan;

  • its early success in connecting to the fast-paced, informal style of the Clinton White House;

  • its failure to develop effective means for broad policy coordination, or for developing options for Presidential choices just over the horizon;

  • the "botched transition" in NEC leadership, with almost three months elapsing between the naming of Rubin as Treasury Secretary in December 1994 and the designation of Tyson as his NEC successor; and

  • the challenges Tyson faced to keep the NEC in the policy game as operating agencies became more assertive, and the White House became more politicized in preparation for the 1996 election.

Destler concludes that the NEC "started off strong," with Rubin particularly successful in demonstrating to other senior administration economic advisers the advantages of working through the NEC and its staff. But though "there was a need to build greater structure once the NEC was 'off and running,'" the author finds "no evidence that NEC leaders made a serious effort to institutionalize their creation." This limited the NEC's role, and made the transition from Rubin to Tyson more difficult.

Destler concludes that the NEC should be maintained, with its current responsibility to coordinate both domestic and international economic policy. He then sets forth both a "minimum" and a "maximal" reform agenda. The first comprises "minimal steps that must be taken if the NEC is to add value in the second-term Clinton White House." The second involves additional measures for the President to take if he wants a really strong NEC. Minimal steps include:

  • Reaffirmation, by the President, of the role of NEC director (the Assistant to the President for Economic Policy) as his manager/convener for domestic and international economic policy;

  • Enforcement of a requirement that all memos to the President on economic issues go through the Assistant for Economic Policy;

  • Establishment of a procedure to commission interagency policy analyses on emerging issues, analyses that offer real options for senior-level debate and Presidential choice;

  • Tightened procedures for meetings, with regular advance scheduling, agendas circulated to participants, minutes kept and circulated, and decisions conveyed in writing;

  • Upgrading of technical support for the NEC staff, with state-of-the-art computer and electronic-mail facilities.

  • If the President wants to give the NEC true primacy as his personal instrument for economic policy management, he should, in addition:

  • Assign the NEC responsibility for review of a small number of high-priority issues for decision and action early in his second term (possibilities include future trade negotiating authority, the budget, entitlements, tax policy, international monetary policy, and economic sanctions);

  • Sign orders for certain of these issues specifying a (PRD-type) process aimed at developing clear options, including those not championed by particular advisers; and

  • Search for an occasion to punish a senior player for seeking to circumvent the NEC process.