A FRESH LOOK AT ECONOMIC POLICY

* A U.S. finance minister, with the combined responsibilities of the Treasury secretary, the budget director and the Council of Economic Advisers.

* Consolidation of the congressional committees that authorize programs and the committees that appropriate funds for them.These are two of several intriguing proposals to improve the formulation of U.S. economic policy made by Alice Rivlin, the first director of the non- partisan Congressional Budget Office and now director of economic studies for the Brookings Institution.

She advanced them in her recent presidential address to the American Economic Association because . . . our economic policy system has gradually become so complex, diffused and fragmented that it impedes rather than fosters informed choices on major issues.

She thinks too many wrangling levels of government are making the same decisions too many times, and in too great detail, without making some key decisions, notably those involving fiscal and monetary policy, in conjunction with each other.

One of her proposals would put the Office of Management and Budget and the Council of Economic Advisers into a restructured Treasury Department that might be called the Department of Economic Affairs.

The secretary would have a high-level chief economist with a strong professional staff. The budget director, who also would report to the secretary, would work closely with the chief economist.

The proposal would put executive authority for tax, budget and fiscal policy under a single roof and give the president the equivalent of a responsible finance minister.

Ms. Rivlin thinks that would spare the president the need to decide turf battles between Treasury, OMB and the council and help create a professional, permanent economic staff one step removed from the short-run political concerns of the White House.

Her case for congressional consolidation may be more compelling.

The Senate and House each have authorizing, appropriating, tax and budget committees - and subcommittees. Add in Senate and House floor consideration and the possibility of later conference committees and you have a case of oversight becoming overkill.

In Ms. Rivlin's view, Congress has made its budget process nearly impossible even for members of Congress to understand and increased the workload so much that decisions are routinely made late and in an atmosphere of crisis.

She would combine the authorizing and appropriating committees in each house into a single set of program committees for each major area of public spending.

Tax committees would deal only with revenue issues; their current responsibility for spending items such as Social Security would go to program committees.

Budget committees would have the task of putting the spending and revenue sides of the budget together for approval by the entire Congress.

As for the Joint Economic Committee, which you might have thought would be dear to the heart of an economist, Ms. Rivlin thinks it should celebrate the important contributions it made to economic understanding and then close up shop.

In the specific case of fiscal and monetary policy, she says the fact that fiscal policy has become an exercise in damage control, while the Federal Reserve makes all the important decisions about the economy, underlines the separation between the two.

She finds it a curious paradox that a nation, which feels it needs many more hands on the tiller of fiscal policy than most countries regard as workable, is content to leave monetary policy to a central bank with fewer visible ties to the rest of the government than the central banks of most countries.

Her solution: Closer formal links between the Federal Reserve Board and the Department of Economic Affairs. Asked this week for an example of the additional ties she has in mind, Ms. Rivlin cited, without recommending it, the practice of countries that make their Treasury secretaries ex officio board members of their central banks.

She also proposed that the Fed, which now reports on monetary policy to the congressional banking committees, instead make regular monetary reports, and recommendations, to the congressional budget committees.

It's likely to be a while before the major Rivlin proposals become part of the economic policy agenda. But given the budgetary failures of recent years, her principal point - that we need to weed out the policy-making process - ought to be written large across the top of that agenda.

Thomas J. Connors is the Washington bureau chief for The Journal of Commerce.

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