Keep the economic council

CHALK up White House points for boldness. First it offered a plan - provided through the auspices of the US Treasury - to scrap the graduated income tax and replace it with a new modified ''flat tax.'' Then it proposed far-reaching and deep budget cuts involving a number of politically popular programs.

Now, just this week, it is floating the notion that President Reagan might terminate his own Council of Economic Advisers as one way of reducing federal budget deficits.

End the Council of Economic Advisers? Most Americans would probably not find that earthshaking news. After all, the council's deliberations - providing economic analysis for the White House - are but a modest sideshow in the larger drama of Washington. That was particularly so under the tenure of the most recent council chairman, Martin Feldstein, who more often than not found his orthodox (but solid) economic analysis at variance with the supply-side views in the Treasury and at the White House.

But ending the council would hardly resolve any of the administration's ongoing credibility problems with professional economists, let alone produce much in the way of fiscal savings. The council's budget is a relatively minuscule $2.5 million annually - hardly enough to build a good-size ship for the Navy, let alone provide funds for all the various type of pork-barrel projects favored by many members of Congress.

If anything, the White House needs better and more substantive economic analysis, not less analysis. Granted, a number of presidents over the years have not taken the council all that seriously at times. President Truman could be testy with professional economists. President Carter tended to rely more on White House political staff than his council. Some Presidents, to their credit, have had particularly successful working relationships with the CEA and its chairmen: Dwight Eisenhower and Arthur Burns; John Kennedy and Walter Heller; Lyndon Johnson and Gardner Ackley; Gerald Ford and Alan Greenspan.

Granted, the council, since its inception in the mid-1940s, has often been off the mark in its economic analysis. It underestimated the strength of the economy and the rising rate of inflation in 1977 and '78. To a degree, the same pattern prevailed in 1983, when the council underestimated the strength of the current recovery. President Reagan, for his part, like President Truman some years back, tends to hold his own strong economic opinions - opinions that often provoke skepticism among mainstream economic professionals.

Why then keep the council? Because it provides an independent economic voice for the White House and, indirectly through its reports, for the American people. The council, for example, under the first Reagan administration chairman , Murray L. Weidenbaum, agonized over the optimistic economic forecasts emanating from the White House and the Treasury, which Weidenbaum with whimsy nicknamed ''Rosie Scenario.''

The council has increasingly found itself on the sidelines, overshadowed by the US Treasury and the Office of Management and Budget and, at times, by the Commerce Department. Those agencies have far larger economic staffs. But each speaks for a definite audience or constituency: Commerce for the business community; Treasury for the financial community; OMB for the political wing of the White House.

Today's president - any president - requires an independent economic voice. That is why it is so important to keep the CEA. Abolishing the council would make little sense.