Joint Economic Committee - Explained
What is a Joint Economic Committee?
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Table of ContentsWhat is the Joint Economic Committee?What Does the Joint Economic Committee Do?Joint Committee on Taxation (JCT)
What is the Joint Economic Committee?
This is a committee which guides congress when making decisions on economic issues. Its principal objectives are assessing the economic conditions and proposing various improvements on policies affecting the economy. The committee achieves this through holding hearings and authorizing studies that provide information on different economic trends and events to members of Congress. This enables them to vote fully informed on the many bills they review every year.
What Does the Joint Economic Committee Do?
This committee was created to advise the Congress on economic matters through the Employment Act of 1946 which also created the Council of Economic Advisers (CEA) whose purpose is advising the president on the same.The head of the Federal Reserve is required to make a report on the State of the US economy by the committee and also explain the monetary policy in use at a given time. The committee members expect the head to answer all their questions. However, the JEC must state what it requires from the economic outlook and justify its actions.The CEA's Economic Report to the president is reviewed by the JEC which then creates an annual report that majors on the points contained in the CEA's report. This gives an alternate view to Congress on the economic outlook that it can use in the budgeting process.The members making up the JEC are 20, and they are equally divided between the Senate and the House of Representatives. The majority party in each house has eight members, and the minority has six. The chairmanship keeps changing from the Senate to the House in every Congress since it is unlikely for the two houses to be led by the same party.Usually, the JEC is politically motivated meaning it attacks the president's policies if it is led by the opposition and supports them if the ruling party leads it. However, politics aside, the reports and data of JEC have essential knowledge. The reports by the Senate and the House do vary in terms of topic and approach.This Committee sheds light on the issues that concern legislators and in doing, so it affects the economy. It authorizes hearings and reports which aid legislators in making informed decisions on bills and the budget. The JEC sometimes covers provincial economic issues because it serves the representatives of the people. Such issues may include dumping to protect local industries and also trade protectionism.
Joint Committee on Taxation (JCT)
This is a committee formed to aid the Congress in the creation and review of tax legislation. This Committee is used to prepare all tax legislation's revenue estimates that Congress considers. It also prepares drafts of the histories of tax-related bills and investigates the various features of the federal tax system.This Committee was used back in 2017 to review the tax plans of President Trump, and it gave its results by stating that the proposed Tax Cuts and Jobs Act would lead to an increase in the deficit by over $1 Trillion in a period of 10 years. It also estimated that the tax cuts would lead to a growth of 0.7% annually which would reduce the loss in revenue resulting from the $1.5 trillion in tax cuts.The staff of JCT often interact with the Members of Congress and Members of the tax-writing committees together with their staff confidentially and enjoy trust from the Houses of Congress. They are also required to be independent, tax-focused, and involved in every stage of the legislative tax process to enhance consistency as the tax bills pass from the committees to the floor of each chamber and also to a House-Senate conference committee.JCT was created by Congress in the Revenue Act of 1926 and is rotationally headed by the Chairman of the Senate Finance Committee and the Chairman of the House Ways and Means Committee. Ph.D. economists, accountants, and attorneys make up the members of its staff.In every first session of Congress, the House chairs the committee while the Senate has the vice-chair. In the second session, these roles are reversed.