WASHINGTON (AP) – Federal Reserve Chairman Alan Greenspan on Wednesday praised the useful advice provided to presidents over the years by the Council of Economic Advisers, a tiny White House agency now headed by the man expected to succeed Greenspan.

Greenspan said the three-member council, created during the Truman administration, was “one of the most successful government agencies in history.”

The council’s current chairman is Ben Bernanke, nominated by President Bush on Monday to succeed Greenspan at the Fed.

Greenspan said the council and its supporting staff of professors on leave from universities have proved effective in promoting sound economic policies and stopping bad economic ideas from moving ahead.

“Throughout all this history, the CEA has, in most cases, provided the president with the best economic advice available at the time and has, crucially, been a consistent advocate for the importance of market forces,” Greenspan said in a speech in Kansas City. Copies of the text were made available in Washington.

Greenspan made no mention of Bernanke during his appearance, where he also was honored with the first Truman Medal for Economic Policy, sponsored by the Truman Library Institute.

Greenspan noted in his remarks that he was selected to be head of the CEA by President Nixon and was scheduled to have his confirmation hearing in August 1974, on the day that Nixon resigned the presidency because of the Watergate scandal.

Greenspan said President Ford, who succeeded Nixon, re-nominated Greenspan for what he called a “challenging time” in economic decision making. “We did not solve all the problems we confronted,” Greenspan said.

Ford was defeated in the 1976 election by Jimmy Carter, who ran on platform that the Ford administration had failed to deal with high unemployment and high inflation.

Greenspan said when he took over at the CEA in the fall of 1974, the administration was focused on combatting inflation, but that in just a few months, government policy-makers realized that the U.S. had entered a recession and the administration turned its attention to promoting an economic recovery.

Greenspan said he found during his time at the CEA that trying to forecast the economy through the use of economic models had its limits. He said that he also learned how invaluable timely economic data could be and that it was important for economic policy to take the long view.

“Although the pressures to use the government’s tools of economic management to achieve one or another short-term aim are always present, the tools of government are, in fact, most appropriately used to create an environment in which private economic activity can flourish over time,” he said.

Greenspan, who was selected by President Reagan to become Fed chairman in 1987, is an advocate of deregulation and allowing market forces to work.

Bernanke, if confirmed by the Senate, would be the third CEA chairman to become head of the Federal Reserve. In addition to Greenspan, Arthur Burns was CEA chairman in the Eisenhower administration and then Fed chairman under Nixon.

Some Democrats have said they planned to question Bernanke specifically about whether he believed he could defend the Fed’s independence from undue political influence.

Greenspan, in his speech, did not mention current economic conditions. The Fed, at its meeting on Tuesday, is expected to raise a key short-term interest rate for a 12th time. Such a move would be seen as seeking to ensure that the spike in energy prices following the Gulf Coast hurricanes did not contribute to more widespread inflation problems.

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AP-ES-10-26-05 1523EDT