WORD out of the White House is that the President is thinking about abolishing his Council of Economic Advisers (CEA). Budget cutting is cited. Already the CEA is beginning to disappear like the Cheshire Cat - only in reverse. Where the famous cat faded until nothing was left but its grin, the CEA's teeth have disappeared first. Since Martin Feldstein departed as chief of the CEA in July, his position has gone unfilled. That leaves a creature far less cocksure than one with a head and eight lives still to go.
The cliche that most closely fits this trial balloon from the White House is ''penny-wise, pound-foolish.'' The Council of Economic Advisers costs about $2.5 million a year to run. That's 0.0000029 percent of the current federal budget - peanuts, or maybe just peanut shells.
So symbolism seems to be the main matter at issue. If Washington has come to the point of discussing whether there should be symbolic salary cuts in the executive branch and perhaps even in Congress, couldn't the CEA be dropped in the interests of fairness? Does the President need economists by his side?
Very few world leaders have more than a smattering of economic knowledge. American presidents are no exception. West Germany's previous chancellor, Helmut Schmidt, was an economist. So was Britain's Labor prime minister, Harold Wilson. But even they heeded the economists' equivalent of the aphorism that a lawyer who handles his own case has a fool for a client. Most modern leaders have recognized that their knowledge of the ''dismal science'' is unsophisticated and out of date. They are far too prone to believe that you pull lever A and get result B. The relations of modern trade, monetary policy, budget, taxation, investment, and borrowing are far more complex than that.
Well, if the President isn't an economist, surely he has plenty of other economists in government to advise him? It's true there are more economists in both the executive and legislative branches than ever before. But they are not in a position to give independent judgment to the President. There are economists - and good ones - in each of the Cabinet departments. But an economist at Commerce, or Treasury, or Agriculture has a first duty to advise his Cabinet secretary. And this usually means a commitment to support his boss's point of view in interdepartment debates. For instance, the Commerce Department and the Treasury see the current Treasury proposals on business taxes in different lights. It's hard to expect their respective economists to take a disinterested view.
All right. But there's always David Stockman. Can't the director of the Office of Management and Budget (OMB) serve as the President's economist?
Mr. Stockman might come close. He's bright, quick to learn, imaginative, and willing to speak out against special interests within the President's official family.
But even here there's an inherent weakness. The director of OMB has a duty to put budget efficiency first: to minimize expenditures, maximize revenue. So if the Agriculture Department, for example, presents a proposal for cutting milk subsidies, OMB should favor it - even if, say, the budget saving to the federal government is only $1 billion but the cost to consumers is double that.
In such a case the CEA, taking a broader view of the economy, might easily find that the impact of higher consumer prices makes the milk subsidy cut undesirable.
Furthermore, the budget director is not always an economist. Bert Lance, Jimmy Carter's director, was a banker, not an economist. Nor does the frequent presence in the Oval Office of former economics professor and OMB director George Shultz fill the bill. He's got other matters on his plate.
Finally, there's the question of having a dispassionate specialist present at Cabinet meetings to advise the President when conflicting views come up around the long, oval table. The commander in chief may not always heed the advice tendered. Many heads of the CEA can attest to that, including Murray L. Weidenbaum and Martin Feldstein in the current administration. But the President would be ill served if he didn't have the more objective views of someone not committed to any of the barons around the table.
Jokes about economists are legion - even among economists. That is probably a measure of the prevalence of economics in today's world. Economists admit to making mistakes. They often disagree with each other. But the leader of the world's strongest economy needs a vizier at his side who can give advice on the broadest implications of major policy proposals.
Merlin may have seemed an old fuddy-duddy at times. But he taught Arthur enough to steer wisely among the knights of the round table. The modern president needs his economic Merlin. If a symbolic cut is necessary to present an image of fairness, Mr. Reagan's staff ought to be considering salary freezes or cuts for the CEA, not extinction.