Senate Delays Feldstein Confirmation

Politics Hold Up Appointment to CEA

The official confirmation of Professor of Economics Martin S. Feldstein '61 as chairman of the Council of Economic Advisers (CEA) has become enmeshed in election-year politics, and the once certain event has now been delayed at least until December.

Democratic senators, who gave the conservative economist a hard time at his confirmation hearings last week, have succeeded in stalling the approval process, preventing the full Senate from okaying the appointment before it adjourned last night to, the final week of campaigning The necessary vote cannot take place until the body reconvenes in late November.

Senate confirmation, though required by the Constitution, is usually a mere formality Members of both parties generally acknowledge that while they may disagree with the nominee's ideas, the President has a right to choose his own advisers.

But with a crucial mid-term election only six weeks away, the Democrats have used the confirmation of Feldstein as a lightning rod for their criticisms of Reagan's economic policies--the major theme of the campaign

At the two-hour Senate Banking Committee September 22, Feldstein was grilled for proposals he had made in the past to trim social security spending and divert resources away from housing programs.

Senators also criticized him for the size of his personal wealth, saying he was one more in a line of millionaire appointees. At one point, when Feldstein stated that he was worth $750,000, Sen. Donald W. Reigle Jr. (D-Mich.) angrily walked to the witness table and presented documentation showing that, including personal savings, the 42-year-old professor is worth $1 million.

When the committee took up the matter again this Thursday, the vote split directly along party lines. Seven Republicans voted in favor of confirmation; five Democrats took the unusual step of voting against Four senators were absent.

"It's the Democrats' way of expressing anger over the President's economic priorities." an aide to Sen. Alan Cranston (D-Calit) who registered a "no" vote-said earlier this week.

But the minority carried their protests beyond the simple vote. The matter should have proceeded directly to the Senate floor yesterday, where it most likely would have breezed through. The minority, however, took advantage of a rarely used procedure, asking for a written report on the nomination.

That request--which aides said would take a few days to fill-effectively prevented the confirmation from reaching the Senate floor yesterday. When the Senators adjourned early this morning, they had not considered it.

Reagan may make Feldstein temporary official chairman by using an obscure constitutional provision allowing appointments during a Senate recess, a CEA staffer said. But a White House spokesman refused to discuss that possibility yesterday, saying only "we hope that Professor Feldstein will be confirmed this afternoon."

Should Reagan exercise such authority, the Senate would still have to approve the appointment in its lame duck session.

Whenever the vote does come up, nobody predicts Feldstein will lose.

The Senate has apparently not flustered Feldstein, who was unavailable for comment yesterday. "Marty understands politics," one assistant said.

The whole complication has little more than symbolic importance anyway, since Feldstein and his crew--confident of eventual approval--have already taken over the office.

Feldstein, who will most likely get a two-year leave from the University, has been working in the White House since Labor Day. He has, according to a chief council aide who asked not to be identified, been actively involved in formulating preliminary economic forecasts and providing advice to the President on several policy matters.

Equally involved is a core of Harvard aides. Laurence H. Summers, professor of Economics--who was tenured just this summer after leaving MIT--is Feldstein's chief aide on the domestic economic policy. Three of Feldstein's graduate students are working as staff assistants on taxes and labor.

Under Feldstein's predecessor--Murray Wiedenbaum--the CEA had apparently lost influence in the Administration. Wiedenbaum was reportedly uncomfortable with Reagan's massive defense expenditures and the subsequent large budget deficits.

The day after Wiedenbaum left in July--ostensibly so he could return to Washington University in St. Louis to teach--he publicly criticized the weapons appropriations.

Feldstein too has some differences with the Administration. He has been critical of the large deficits, and at one point argued that the third stage of Reagan's three-year income tax cut should be deferred. Even at his confirmation hearings he changed the White House, forecasting next year's growth rate at one full percentage point below the government's figures.

But one aide--who worked under Wiedenbaum and is now working for Feldstein--said that the Harvard professor may be able to exert more influence. Although he refused to comment on Feldstein's first three weeks on the job, Laurence Lindsay, a staff economist, noted that Feldstein's economic specialty places him in a better position to advise the President. He noted that Wiedenbaum's fields of expertise were defense spending and regulation. The first put him at odds with his boss. The second, while important, was not at the forefront of the Reagan program. "If you look at a list of Feldstein's publications, he has written about every general area of taxes and every general area of social spending," Lindsay added.

Feldstein has attained national prominence, not only through such publications, but also as head of the prestigious Cambridge-based consulting firm, the National Bureau of Economic Research. He was reportedly offered the CEA chairmanship when Reagan first took office two years ago, but turned it down to help complete a major bureau study on capital formation.MARTIN FELDSTEIN