Employment Act of 1946
In practice, the government has relied on automatic stabilizers and Federal Reserve policy for macroeconomic management, while the Council of Economic Advisers has focused primarily on discussions of microeconomic issues.Swings in aggregate demand create a phenomenon known as a business cycle that leads to irregular downsizing and hiring runs, causing fluctuations in unemployment.[6] Conservative Congressmen, led by Republican Senator Robert A. Taft, argued that business cycles in a free enterprise economy were natural and that compensatory spending should not be exercised except in the most extreme of cases.The bill was pressured to take on a number of amendments that forced the removal of the guarantee of full employment and the order to engage in compensatory spending.Conservatives removed all of the Keynesian markers from the final bill, so that it merely encourages the federal government to "promote maximum employment, production, and purchasing power."The act requires the President to submit an annual economic report within ten days of the submission of the national budget that forecasts the future state of the economy, including employment, production, capital formation, and real income statistics.