ment, and maintains the status quo, and I do not think that is what we are trying to do. I am surprised that we would find ourselves hung up on the issuance of a report stemming from a council that has as its raison d'etre the pulling together of the components of foreign economic policy in a partnership framework between the administration and the Congress. I am surprised, frankly, that this view is taken. Do any others want to be heard on this particular point? We might try it that way.

Mr. BLACKBURN. I would like to make this observation.

I disagree with the Chairman to some extent about the need for additional reports. We get more printed material crossing our desk in one day than any one Congressman could really pretend that he absorbs. In fact it would be a very misleading thing for any Congressman to say he reads all of the reports that come out of the various executive agencies as part of his daily activities. You just do not have enough time to do that.

Mr. GETTYS. Would the gentleman yield? But all those reports that you are talking about, Mr. Blackburn, are they not telling us what has been done rather than letting the Congress in on formulating any policy. Just here is what has been done. If you like it fine, and, if you do not like it, do not bother.

Mr. BLACKBURN. I agree that is the general context of them and they are usually quite weighted and quite worthy.

Let me ask this question, Mr. Carlucci. The President, of course, if he decides to make some change in international or domestic economic policy generally advises the Congress about that by a message to the Congress, doesn't he?

Mr. CARLUCCI. That is correct, sir.

Mr. BLACKBURN. And wouldn't that be a device that would be available for advising the Congress on changes in policy?

Mr. CARLUCCI. That device would certainly be available as would the individual members of the Council.

Also I might note that the considerable portion of the Economic Report of the President, which is transmitted to the Congress every January, is devoted to the United States and the world economy and goes into considerable amount of background material and data.

Mr. BLACKBURN. Let me just ask this one other question and I will be happy to yield.

The Council of Economic Advisers itself prepares an annual review of economic policy. Is that the document you are talking about right there?

Mr. CARLUCCI. Yes, sir.

Mr. BLACKBURN. As I recall, there is always a chapter in there that relates to international economic policy?

Mr. CARLUCCI. That is correct, sir.

Mr. BLACKBURN. I will be happy to yield. I have no further questions on this, although I do have other matters I want to go into later. Mr. ASHLEY. I would have one, if I might.

Mr. ROUSSELOT. On the same issue?

Mr. ASHLEY. Yes.

Mr. REES. On the report?

Mr. ASHLEY. Yes.

Mr. ROUSSELOT. This is on Mr. Carlucci's comment about combination?

Mr. ASHLEY. I thought we might exhaust comments-questions with respect to his proposal that the annual report requirement be deleted. Then we will, of course, proceed to other elements.

Mr. REES. If I might make a point. I have never found such a report other than Secretary Peterson's excellent one on the U.S. participation in the world economy, which he wrote when he was in the White House. This is an area of interest to me as I used to be in the field of international trade. I have never found in any other one document at the Federal level a broad view of the U.S. position in world trade, probably because we have several agencies dealing with the subject. We have a White House agency, we have export control, we have the Department of Commerce, Ex-Im Bank, OPIC, et cetera, so it is very difficult to find one report dealing with the United States in the world market.

I think this has been the problem we have had for years: We have never had a foreign trade policy or international economic policy. The first time it was pulled together was in the original Peterson report last year.

Mr. ASHLEY. What we have tried to do with this legislation, which has the essential cooperation of the administration, is to provide a mechanism for coordinated foreign economic policy with the requirement, as far as the report is concerned, that it provide information and statistics describing characteristics of international economic activity and identifying significant current and foreseeable trends and developments. This is what we haven't been getting.

I suppose my point would be that this committee obviously is the sponsoring legislative body for the Council that is being proposed and it would be my thought that on a fairly regular basis representatives from the Council would be invited to appear before the subcommittee, and that the report, aside from its other desirable features, could be used by the subcommittee as a basis for discussion with members of the Council.

Mr. ROUSSELOT. Would the gentleman yield?

Mr. ASHLEY. Of course.

Mr. ROUSSELOT. I am in agreement with the position you take and I assume, Mr. Peterson, you share his comment of the four points of changing that he recommends in this legislation; is that correct?

Are you both in agreement on the four points of change?

Mr. PETERSON. Yes, sir.

Mr. ROUSSELOT. And the last point to which Mr. Ashley speaks, about combining as part of the work of this already existent Council, combining it with the Council on Economic Advisers regular report, is, I guess, the point you are making, that it should be part and parcel of that, because it is so much related to the domestic economic policy; is that correct?

Mr. CARLUCCI. Well, we think

Mr. ROUSSELOT. In other words, it should be in the same report? Mr. CARLUCCI. Well, the Council staff has participated in drafting the chapter, chapters, on the

Mr. ROUSSELOT. Chapter 5 of the most recent report?

Mr. CARLUCCI. Yes.

Mr. ROUSSELOT. Mr. Peterson, did you participate, even though you had gone over to Secretary of Commerce, in chapter 5 of this

1972

Mr. PETERSON. Let me elaborate on this.

Mr. Rousselot, as you know, international economics kind of falls in an intersection between on the one hand foreign policy and foreign policy considerations and domestic policy.

Mr. ROUSSELOT. They are very much related.

Mr. PETERSON. And they are very much related to both actually. Therefore, the way this has been handled is the chapter in the domestic economic report

Mr. ROUSSELOT. Chapter 5 of the 1972 report?

Mr. PETERSON. Deals with this subject.

Mr. ROUSSELOT. Roughly 40 pages of the document?

Mr. PETERSON. Right. Was dealt with in great detail in a coordinated way by the Council on International Policy and the Council of Economic Advisers.

Mr. ROUSSELOT. They both participated in the drafting?

Mr. PETERSON. Yes; they both participated actively. In turn the National Security Council works on with the President as you know his annual foreign policy report. If you will look at that report you will find a substantial chapter dealing with international economic aspects of our foreign policy. I think the view has been that between. those two documents there is considerable treatment given to the subject of international economics.

Mr. ROUSSELOT. Well I find myself very much in agreement with Mr. Carlucci's statement that it is important to have this a part of the regular Council on Economic Advisers report to the country and the Congress and that it should be part and parcel and not just another separate report and that it does then show the relationship by putting it in the same report to our domestic economic policy; is that not correct?

Mr. CARLUCCI. That is correct, sir.

Mr. ROUSSELOT. I think that is the best argument that could be advanced as to why this Council, of which you speak, and is already in existence, ought to be part and parcel of the other Council.

In the preface to the legislation we have before us, it says on page 2, under findings and purpose, that "The Congress further finds that the objectives of the United States with respect to a sound and purposeful international economic policy can be better accomplished through the closer coordination of (A) domestic and foreign economic activity." And for the same reasons that you give, that the international part of the economic report ought to be part and parcel of the same I think is a good reason for keeping them together, and I agree with the chairman that it is somewhat contradictory when you say in one part of your testimony that there needs to be a spin-off and make this separate, yet in the same one of the reasons you want to change in the legislation you say let's keep it part and parcel of the same report. Anyway I do agree with your latter statement on page 4.

Mr. CARLUCCI. I would like to respond.

Mr ASHLEY. Certainly we want you to respond. If you would in your response also tell the committee whether it is your suggestion that this council be a subcommittee of the Council on Economic Advisers.

Mr. CARLUCCI. That is the point I was going to respond to, Mr. Chairman.

It seems to me that it is indeed desirable that the Council on International Economic Policy participate fully in the drafting of the annual report of the President.

On the other hand, the Council on International Economic Policy has responsibilities that are somewhat broader than the Council of Economic Advisers. The Council of Economic Advisers is just that, an advisory body to the President. The Council on International Economic Policy also has a broad coordinating function. As I mentioned earlier, it serves as a forum for different agencies engaged in international economic policy to express their viewpoint to the President so that he can make the ultimate decision. It then in addition has a broad oversight responsibility to see that the Presidential policy is implemented by the responsible agencies. So this is a different kind of role than the role that has historically been given to the Council of Economic Advisers, hence the distinction between the two bodies, and we do not think they should be linked.

Mr. ROUSSELOT. Isn't it primarily advisory as well as coordinated in its functions?

Mr. CARLUCCI. It is both. It has an advisory responsibility, an advisory and confidential relationship with the President, it also has a responsibility for coordinating the different agencies' activity, a responsibility which is spelled out very well in the bill before you. Mr. ASHLEY. Mr. Brown.

Mr. BROWN. Thank you, Mr. Chairman.

What is the legislative basis or requirement for the furnishing to the Congress of the report of the Council of Economic Advisers?

Mr. CARLUCCI. I would have to submit something for the record. Mr. BROWN. I think its the Full Employment Act of 1946, isn't it? Mr. CARLUCCI. Yes; in accordance with section 4(c) (2) of the Employment Act of 1946, that is correct.

Mr. BROWN. And when is that report required?

Mr. CARLUCCI. Well, it is submitted in January of each year. Mr. BROWN. I ask these questions because it appears to me that this whole discussion is a tale full of sound and fury signifying nothing.

Do you have any issue, do you take any issue with the requirements of section 6? The report shall include (1) information and statistics describing characteristics of international economic activity and identifying significant current and foreseeable trends and developments.

Do you have any problem with furnishing that?

Mr. CARLUCCI. We have no problem with the substance of those requirements.

Mr. BROWN. Do you have any problem with subparagraphs 2 and 3 then?

Mr. CARLUCCI. Yes, its a question of additional reports and stuff time engaged in work that we think would be essentially duplicatory. Mr. ASHLEY. Would the gentleman yield? Isn't the very language that you have been questioned about language that was sent up from the administration?

Mr. BROWN. He is not raising any question about language, to my knowledge. He says they can concur with all of section 6.

Mr. ASHLEY. What I am saying is, in their original draft they had a reporting requirement that we accepted almost in toto.

Mr. BROWN. I think it appears that this subcommittee and that you as the chairman, do not want this report on international economic policy to be comingled and lost in the report of the Council of Economic Advisers. If that is the situation, then it seems to me that we ought to just amend the provision for the report of the Council of Economic. Advisers to call it a report of the Council of Economic Advisers and the Council on International Economic Policy; then if it is the practical problem of filing two reports, it is eliminated. That is what I wanted to get from you, Mr. Carlucci, whether there were some things that were being required under section 6 that you did not concur with, that you object to. If its merely the mechanics of furnishing the report, then I think we are wasting a lot of time.

Mr. CARLUCCI. I think we are talking basically, Congressman, about the economics. We certainly have no problem with the substance of the information that is required.

Mr. ASHLEY. Do you know when the change of mind took place, either in OMB, or wherever it took place, with respect to the reporting requirement?

Mr. CARLUCCI. I am not familiar with any change of mind, Mr. Chairman. I would have to submit something for the record.

Mr. ASHLEY. On page 6, this language. "The President shall transmit to Congress within 60 days after the beginning of each regular session commencing with the year 1973-a report on the international economic position of the United States," and so forth. That is language that came from the administration.

Mr. BROWN. Mr. Chairman

Mr. ASHLEY. Would you furnish for the record, if you can find out, when that change of mind took place?

Mr. CARLUCCI. I will furnish appropriate information.

(In response to the request of Chairman Ashley, the following information was submitted for the record by Mr. Carlucci:)

REPLY RECEIVED FROM MR. CARLUCCI

When the President established the Council on International Economic Policy on January 19, 1971, no provision was made for an annual international economic report to the Congress. Also when Director George Shultz of the Office of Management and Budget submitted on July 15, 1971, to both Houses of the Congress draft legislation to authorize appropriations for expenses of the Council, no provision was made for an annual report to the Congress.

The proposal for a separate annual international economic report was first set forth in Section 405 of H.R. 8180. It listed ten matters, covering a bit more than three pages of the bill, that would be included in the required report.

Subsequently, discussions regarding H.R. 8180 ensued between staff of the Council on International Economic Policy and Mr. Ashley and staff. The CIEP staff indicated that Section 405 was overly detailed in specifying the content of the proposed report and that some of the information either did not exist or could be presented in the required form only with considerable difficulty and expense. As agreed, the CIEP staff thereafter reduced its views on the bill to written text changes, including a comprehensive rewrite of Section 405 to avoid the problems of content that had been pointed out in the discussions.

That text has been substantially used in Section 6 of H.R. 14412. In the matter of content of the report, that text is far more attainable and useful than the text of Section 405.

At no time has there been a change of mind on the desirability of the report. The view of the Executive Branch has been that a new, separate annual international economic report presents the problem of duplication with other annual reports, most particularly the Economic Report of the Council of Economic Advisers. The preparation and presentation of the text that appears in Section 6