Economic Report
of the President
Transmitted to the Congress
February 1995
TOGETHER WITH
THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1995
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402
C O N T E N T S
Page
ECONOMIC REPORT OF THE PRESIDENT .........................
1
ANNUAL REPORT OF THE COUNCIL OF ECONOMIC
ADVISERS* .............................................................................
9
CHAPTER 1. IMPLEMENTING A NATIONAL ECONOMIC STRATEGY
19
CHAPTER 2. THE MACROECONOMY IN 1994 AND BEYOND .........
49
CHAPTER 3. EXPANDING THE NATION’S PRODUCTIVE CAPACITY
95
CHAPTER 4. PUBLIC AND PRIVATE SECTOR INITIATIVES TO
PROMOTE ECONOMIC EFFICIENCY AND GROWTH ....................
129
CHAPTER 5. IMPROVING SKILLS AND INCOMES ...........................
171
CHAPTER 6. LIBERALIZING INTERNATIONAL TRADE ....................
203
APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE COUNCIL OF ECONOMIC ADVISERS DURING 1994 ......
255
APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EM-
PLOYMENT, AND PRODUCTION ..................................................
267
* For a detailed table of contents of the Council’s Report, see page 13.
(iii)
ECONOMIC REPORT
OF THE PRESIDENT
3
ECONOMIC REPORT OF THE PRESIDENT
To the Congress of the United States:
Two years ago I took office determined to improve the lives of av-
erage American families. I proposed, and the Congress enacted, a
new economic strategy to restore the American dream. Two years
later, that strategy has begun to pay off.
Together we have created an environment in which America’s
private sector has been able to produce more than 5 million new
jobs. Manufacturing employment grew during each month of
1994—the first time that has happened since 1978. We have cut
the deficit in the Federal budget for 3 years running, we have kept
inflation in check, and, based on actions I have already taken, the
Federal bureaucracy will soon be the smallest it has b