The recent death of former Senator and Treasury Secretary Lloyd Bentsen brought forth many laudatory obituaries. Most concentrated on his long career in Texas politics and chairmanship of the Senate Finance Committee. But for my money, the most important thing he ever did was during his chairmanship of the Joint Economic Committee (JEC).
In 1980, the JEC issued one of the most influential congressional committee reports in history. Written under Bentsen's leadership, it was critical to the success of supply-side economics, the Reagan economic program, and consequently, many of today's tax and economic policies.
The JEC was established by the Employment Act of 1946, which also created the president's Council of Economic Advisers. The mandate of both organizations was to devise policies that would bring about full employment.
Probably the high point for the committee came in 1963 when it provided much of the intellectual ammunition for the Kennedy tax cut. At that time, Rep. Wilbur Mills (D-AR) was a member of the JEC as well as chairman of the House Ways and Means Committee. He relied heavily on JEC economists, especially Norman Ture, to provide him with analysis and research that helped get the tax cut through Congress.
In the late 1970s, Senator Bentsen (D-TX) became chairman of the JEC. He installed economist Jack Albertine as executive director and ordered him to find a way to get the committee to speak with one voice in order to raise its influence on economic policy. This history is recounted in a new book "Building the Next American Century" (Johns Hopkins University Press) by Kent Hughes, a JEC economist during this period.
Albertine decided that the best way to do this was by trying to work with the Republican members of the JEC, who were closer to the moderately conservative Bentsen than most of the Democrats, who included liberal fire-breathers like Senator Ted Kennedy (D-MA).
The Republican staff of the JEC had been thinking for some time about using tax cuts to fight inflation -- an oxymoron in the prevailing economic model of the time. Working with economists Arthur Laffer and Robert Mundell, the JEC Republicans made the argument that tax cuts could expand the supply side of the economy, increasing the quantity of goods and services by raising the after-tax return to work, saving and investment.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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