PAUL McCRACKEN figures that he saved taxpayers many times over his salary, plus that of his colleagues, while serving on the Council of Economic Advisers on the day of former President Nixon's inauguration.
It was Jan. 20, 1969, and the Republican CEA chairman had arrived at his office to find an Agriculture Department memo proposing ''outrageously'' high price supports for soybeans. Dr. McCracken immediately sent a memo to his boss, the new president. That resulted in a more reasonable price-support level.
The story is relevant to the vote Wednesday by the Republicans in the House of Representatives to ''zero out'' the council.
''A silly idea,'' says McCracken, a University of Michigan professor emeritus. ''In terms of good economic policy, it is a decided move backward. It is irresponsibility in Congress.''
The 216 to 211 Treasury appropriations bill vote was a partisan one - mostly Republicans on one side, mostly Democrats on the other. ''It was a slap at the president of the United States,'' held one Democratic staffer. ''No arguments were made on the merits of the issue.'' The CEA wasn't even discussed on the floor.
Earlier, however, Rep. Jim Lightfoot (R) of Iowa, an appropriations subcommittee chairman, reportedly called the agency's $3.4 million budget ''high-priced advice'' and suggested that the council could be replaced by volunteers or a subscription to the Kiplinger Letter - a letter that looks at economic issues.
A GOP congressional staffer also noted that the Office of Management and Budget (OMB) in the White House has 25 professional economists on staff, and a few more are members of the National Economic Council, a body that coordinates economic policy between departments.
But such arguments don't go over well with former CEA chairmen. Martin Feldstein, the second top economic adviser for President Reagan, wrote an opinion piece for the Wall Street Journal supporting the council.
Herbert Stein (Nixon and Ford) and Charles Schultze (Carter) did the same jointly in the Washington Post. Michael Boskin (Bush) wrote to Rep. Steny Hoyer, Maryland's ranking Democrat on the appropriations subcommittee, defending the CEA.
The CEA, Mr. Boskin noted, killed a popular multibillion dollar ''catch up with the Japanese'' program proposed by the Commerce Department and the electronics industry to support development of an analog high-definition TV system. ''Experience shows it would have been a giant sinkhole with no results,'' he wrote. ''The Japanese program has been a dismal failure.''
In phone interviews, McCracken and Murray Weidenbaum (Reagan) made these points:
* The three-member council, usually consisting of academics on leave from their universities for a year or two, provide a president with analytical, objective advise. They are not civil servants, like economists in the OMB, that have to be concerned about their long-term career. They can take risks and offer fresh ideas. They represent no special interests, like banks, labor, big or small business, or government agencies.
''In cabinet-level councils, the chairman of the CEA provides a useful counterweight to a department secretary pushing for the agency he represents,'' says Mr. Weidenbaum, now a professor at Washington University in St. Louis.
* Whether Democrats or Republicans, CEA economists generally have a free-market bias. McCracken finds it ironic that a market-oriented Congress would eliminate the major proponent of less regulation and more free enterprise in the White House.
To the public, the CEA may be most famous for its semiannual economic forecasts. Critics say these are often ''rosy scenarios.'' But a new study by Stephen McNees, a Federal Reserve Bank of Boston economist, detects no optimistic bias in CEA forecasts from 1962 to '94. And he finds the forecasts about as accurate as private-sector ones.
To the CEA chairmen, their most important work is in microeconomics - giving advise to the president on the nitty gritty of government affairs, mostly behind the scenes.
McCracken and Weidenbaum both expect the Senate to approve CEA funding. Once Congress really did cut off funding for the CEA, in 1953. It thought better of it several months later.