TREASURY DIRECTIVE: 27-05

Date: March 4, 1991

Sunset Review: TBD

Expiration Date: TBD

SUBJECT: Organization and Functions of the Office of the Assistant Secretary (Economic Policy)

1. PURPOSE. This directive describes the organization and functions of the Office of the Assistant Secretary (Economic Policy).

2. THE ASSISTANT SECRETARY (ECONOMIC POLICY) reports through the Under Secretary for Finance and the Deputy Secretary to the Secretary. The incumbent is responsible for the following functions.

a. Develops and maintains an economic research capability that is consistent with the Department's policy and responsibilities.

b. Provides the Secretary, the Deputy Secretary, and the Under Secretary for Finance with substantive advice and recommendations on the economic policy actions that fall within their spheres of responsibility or interest.

c. Conducts research in those areas of economic activity necessary to provide a continuous appraisal of the current state and future course of the United States economy.

d. Analyzes and evaluates, in-depth, the economic consequences of developments, and of alternative policy and legislative proposals, in a wide range of economic and national security areas.

e. Carries out the Department's statutory and traditional responsibilities for the collection, maintenance and analysis of information from the Department's international financial reporting systems, including the Department's functions under 31 U.S.C. 5315 and the International Investment and Trade in Services Survey Act, Public Law 94-472 (1976), as amended.

f. Provides the Department with the capability to carry out sophisticated quantitative analysis of international financial information.

3. ORGANIZATION STRUCTURE. The Assistant Secretary (Economic Policy) supervises the Deputy Assistant Secretary (Policy Analysis), the Deputy Assistant Secretary (Policy Coordination), the Director, Office of Data Management, and the Director, Office of Foreign Investment Studies. The Office of Policy Analysis reports to the Deputy Assistant Secretary (Policy Analysis). The Office of Financial Analysis and the Office of Economic Analysis report to the Deputy Assistant Secretary (Policy Coordination).

4. THE DEPUTY ASSISTANT SECRETARY (POLICY ANALYSIS) is responsible for the following functions.

a. Acts for the Assistant Secretary in that official's absence, as assigned.

b. Plans, monitors, and evaluates research efforts, including establishing and achieving time and quality targets.

c. Advises on the policy requirements for research, and on the policy implications of research results.

d. Directs and closely supervises research efforts conducted by the Office of Policy Analysis.

(1) The Office of Policy Analysis is responsible for the following functions.

(a) Conducts in-depth economic evaluations and analyses of developments and issues that affect specific areas of the United States economy, i.e., labor, prices, social security, fiscal policy, regulatory reform, and energy. The results are used for:

1. formulating Treasury positions on legislative or administrative proposals;

2. continually appraising current developments in each area;

3. providing sector inputs to macroeconomic forecasts; and

4. providing research and policy analysis relating to the economic and budgetary conditions of regions, States and localities, including evaluation of trends in the State and local sector of the economy, with particular reference to the impacts of Federal grant, tax and budget policies and other Federalism issues.

(b) Analyzes the effects on the U.S. economy (output, prices, Federal budget, and financial markets) of energy development and programs.

(c) Monitors and assesses the economic effects of changing energy technologies.

(d) Evaluates the effects of Government programs in developing new technologies, or in modifying the use of older technologies.

(e) Analyzes and evaluates national security issues, as assigned.

5. THE DEPUTY ASSISTANT SECRETARY (POLICY COORDINATION) is responsible for the following functions.

a. Acts for the Assistant Secretary in that official' s absence, as assigned.

b. Plans, monitors, and evaluates research efforts, including establishing and achieving time and quality targets.

c. Advises on the policy requirements for research, and on the policy implications of research results.

d. Directs and closely supervises research efforts conducted by the Office of Financial Analysis and the Office of Economic Analysis. These two subordinate offices have the following specific functions.

(1) The Office of Financial Analysis is responsible for the following functions.

(a) Maintains a continuously updated appraisal of the current state of the economy and the significance of monetary and financial developments.

(b) Projects important macroeconomic variables such as Gross National Product, the unemployment rate and the inflation rate in order to provide staff support for the Treasury in its interagency economic forecasting activities.

(c) Monitors Federal Reserve policy and reports on its significance for the economy.

(d) Provides a continuing flow of economic and financial information designed to keep the Secretary and other senior policy officials fully informed on current developments and adapts the form of presentation, as appropriate to meet the needs of the Secretary.

(e) Prepares information memoranda on the economy for the Secretary, in advance of his regular weekly meetings with the Chairman of the Federal Reserve System and for other occasions, such as meetings of the Quadriad, which is comprised of the Department of the Treasury, the Federal Reserve Board, the Office of Management and Budget, and the Council of Economic Advisers;

(f) Provides economic briefing information on the U.S. domestic economy to support the activities of senior Treasury officials in their appearances at domestic and international meetings and provides staff support for congressional testimony by the Assistant Secretary (Economic Policy) and others, and represents the Treasury at interagency meetings concerned with the domestic economy.

(g) Conducts special intensive studies of selected features of economic and financial developments upon request or upon the initiative of the office.

(2) The Office of Economic Analysis is responsible for the following functions.

(a) Undertakes research studies, either self-initiated or at the request of the Assistant Secretary or the Deputy Assistant Secretary; such studies have a substantial policy-relevant orientation, and take the form of research papers, action or briefing memoranda.

(b) Serves on Treasury or interagency task forces at the request of the Assistant Secretary on issues related to the office's area of responsibility.

(c) Applies econometric and statistical techniques to the analysis of economic policy issues; the analysis addresses a wide range of topics and utilizes the developed expertise of the office in both microeconomic and macroeconomic analysis; projects can be either short-term or long-term with the major unifying characteristics being the econometric content and policy relevance.

(d) Provides independent assessment of major developments and issues in monetary policy for the Assistant Secretary, taking into account economic and financial conditions domestically and abroad.

(e) Maintains professional contact with other sectors of Government (e.g., Council of Economic Advisers, Congress, Federal Reserve Board and regional Federal Reserve Banks), universities and private-sector institutions.

(f) Surveys and appraises professional literature, as a means of monitoring current developments, maintaining knowledge of recent research and ideas, and anticipating new issues which will be of concern and importance to the Assistant Secretary or Deputy Assistant Secretary.

6. THE OFFICE OF DATA MANAGEMENT is responsible for the following functions.

a. Collects and analyzes data, and prepares reports on foreign currency transactions required by statute or otherwise needed by the Department.

b. Manages the Department's regular data collection program for portfolio investment. Compiles, analyzes and prepares for publication statistics on U.S. portfolio capital flows and other information related to international investment as required by law or traditional practice.

c. Analyzes and reports on U.S. portfolio investment abroad.

d. Collects, analyzes and prepares reports on statistics of foreign indebtedness to and contingent liabilities of the U.S. Government.

e. Prepares reports and submissions, based on reporting systems maintained by the office and related information, to other U.S. Government agencies and international organizations for the purposes of supporting national and international financial databases.

f. Designs and implements, in light of Department and Government requirements, computerized reporting and information systems on international financial data, and represents the Department in discussions of the design of international financial data bases.

g. Conducts such studies and surveys as may be necessary to prepare reports in a timely manner on specific aspects of international investment as determined by the Assistant Secretary. Provides capability for sophisticated computer based analysis of data systems.

7. THE OFFICE OF FOREIGN INVESTMENT STUDIES is responsible for the following functions.

a. Conducts comprehensive benchmark surveys of foreign portfolio investment in the United States at least once every five years, which function includes:

(1) determining the magnitude and aggregate value of foreign portfolio investment in the United States;

(2) determining the form of investments, types of investors, nationality of investors, and diversification of holdings, by economic sector;

(3) submitting reports to the Congress, detailing and analyzing the findings of the surveys; and

(4) providing reports and analyses based on the survey data to other Government agencies.

b. Conducts other surveys and studies related to foreign portfolio investment in the United States and provides reports and analyses to the Congress and other U.S. Government agencies, as appropriate.

8. THE ASSISTANT SECRETARY (ECONOMIC POLICY) is authorized to reassign functions, programs and associated positions and resources among the subordinate offices as deemed necessary, consistent with existing administrative rules, regulations and procedures.

9. CANCELLATION. Treasury Directive 27-05, "Organization and Functions of the Office of the Assistant Secretary (Economic Policy)," dated November 16, 1989, is superseded.

10. OFFICE OF PRIMARY INTEREST. Office of the Assistant Secretary (Economic Policy).

Sidney Agnes

Assistant/Secretary (Economic Policy)

Attachment

Attachment: Office of Economic Policy Organization Chart, March 4, 1991 (Click on title to view attachment)