Democrats Tie Up Bush on Economy

President Bush is working to prevent a recession, but the group of advisers meant to help him achieve this vital goal is woefully understaffed. In fact, the three-member Council of Economic Advisers is limping by with just a single adviser.

The reason: a lingering impasse between Senate Democrats and the Bush administration regarding the choice of nominees.

Some economists worry the impasse could affect the administration's ability to respond to the economic downturn. "By not confirming the appointments, the Senate is acting to deprive the White House of some of the best economic advice available," a former chairman of the CEA, Gregory Mankiw of Harvard University, said.

For more than six months, the president has been unable to fill the vacancies because top Democrats are refusing to approve his nominees until the White House agrees to the Democrats' choices for vacancies at the Securities and Exchange Commission.

With the deadlock now dragging into March, the administration's chances of being able to fully staff the current CEA are dwindling. Already, one of Mr. Bush's nominees, Dennis Carlton of the University of Chicago, has taken his name out of the running. He had been waiting since August to be considered by the Senate.

The remaining nominee, Donald Marron, also of the University of Chicago, is awaiting "an up or down vote," as the administration searches for a nominee to replace Mr. Carlton, a White House spokeswoman, Emily Lawrimore, said.

That leaves the CEA with just one top-ranking member, its chairman, Edward Lazear. With the White House rushing to respond to an economic downturn, the chairman is "spread way too thin," a former CEA member, Andrew Samwick of Dartmouth College, said.

The conflict over the CEA vacancies reached a tipping point last week when Senate majority leader, Harry Reid of Nevada, wrote a letter to the White House chief of staff, Joshua Bolten, accusing the administration of being increasingly intractable in talks over the confirmation of nearly 200 nominees to various federal boards and agencies. Among those agencies with vacancies are the Consumer Product Safety Commission, the Federal Election Commission, the National Labor Relations Board, and the Chemical Safety and Hazard Investigation Board.

Of the pending nominees, 30 have been waiting for confirmation for more than a year, and about half have been waiting for more than 100 days — including three nominees to the Federal Reserve Board of Governors, the body that makes recommendations to ensure stability in the financial system.

In his February 28 letter, Mr. Reid wrote that the president twice rejected him — in November and in December — when he asked for "speedy consideration" of the SEC positions in exchange for confirmation of Mr. Bush's two CEA nominees.

A White House official said it was holding up the SEC recommendations until the president had time to complete a background check.
As the White House vets the Democrats' choices, the CEA appears to be languishing.

"This looks more like a gradual phase out of the CEA," the director of government reform at the public policy organization the Reason Foundation, Michael Flynn, said.

The body, comprising three top advisers and a 10-member support staff, is responsible for reviewing economic trends, offering forecasts, and advising the president on policies to reduce economic volatility. Both the current and a former chairman of the Federal Reserve have served on the council, which includes top-ranking economics professors and business leaders.

Its role is especially pivotal now, when the markets are in flux and the president would benefit from having his own personal advisers. For example, the CEA not only develops economic policies for the White House but monitors the activities of other federal agencies, such as the Fed, and can make recommendations to the president if it feels the agencies are straying from the administration's policies.

It is "ridiculous to have these positions authorized by law and have the nominees put forward, but nothing happening," Mr. Samwick said. "You wonder what is to be gained by depriving the president of this" additional support.