The state of the economy has always been a major issue in American politics, often deciding the course of elections. With the country still feeling the effects of a prolonged recession, economic policy continues to be a central concern for many families. To understand how the economy functions, it's important to know some of the major players in economics, including the Federal Reserve chairman, the Secretary of the Treasury, the Office of Management and Budget, and the Council of Economic Advisers.
Federal Reserve Chairman
The Federal Reserve, the country's central bank, was created in 1913 by an act of Congress. The seven-member board of governors, including the chairman, are appointed by the President and confirmed by the Senate for 14-year terms. The Federal Reserve's main duty is to formulate and regulate the country's monetary policy through the twelve Federal Reserve Banks that comprise the system and act as the operating branches of the central bank. Because the Federal Reserve has the power to raise and lower interest rates, the Chairman has tremendous power over the economy. Current Chairman Ben Bernanke, has been attempting to spur economic growth by having the Federal Reserve purchase $600 billion worth of U.S. Treasury Bonds in order to drive down long-term interest rates.
The Treasury Department manages the country's finances, helps to strengthen international financial systems and sets policies to ensure that the U.S. economy operates efficiently. The Internal Revenue Service (IRS), U.S. Mint, Office of the Comptroller and the Bureau of Public Debt, all fall under the Treasury Department's control, giving the Treasury Secretary significant influence over the country's economics. The Treasury Secretary advises the President on economic and financial issues, suggests ways to sustain economic growth and maintains control over the production of currency, revenue collection and borrowing that is critical to fund the federal government.
Office of Management and Budget
The Office of Management and Budget (OMB), an agency of the Executive Office of the President, helps the President implement his economic vision through budget development and execution, oversight of agency performance, coordination and review of federal regulations and legislative clearance and coordination to ensure proposals are in line with the President's policies. The OMB's Office of Economic Policy, helps to vet the President's annual budget and develops budget estimates, policy proposals and cost models. The OMB Director is appointed by the President, and has to be confirmed by the Senate.
Council of Economic Advisers
The Council of Economic Advisers exists within the Executive Office of the President, and consists of a chairman and another member who are aided by a full staff of senior economists, research assistants and a statistical office. The agency was created in 1946 by Congress, and is responsible for advising the President on domestic and international economic policies based on research, analysis and statistical evidence. The Council helps the President prepare his annual economic report, evaluates the programs and activities within the government to determine efficiency and potential areas of waste, and produces studies and reports on economic policy requested by the President. The chairman of the Council of Economic Advisers is appointed by the President, and must pass confirmation by the Senate.