The economy is ending the year strong with "solid job growth," and the bipartisan budget agreement will help ease the drag on gross domestic product, Jason Furman, chairman of the Council of Economic Advisers, told CNBC's "Squawk Box" on Wednesday.
While ducking the question on what the Federal Reserve should do at its final policy meeting of the year, Furman did elaborate on what needs to be done to jump-start the economy.
"The immediate thing we need to do next is extend unemployment insurance benefits. I think that's actually good for the economy—the purchasing power of those workers," he said, adding that infrastructure, education and reforming the business tax code should be next up on the agenda for creating more jobs and growth.
"If you look at the private components of GDP, they've been growing at about a 3.7 percent rate over the past two quarters," Furman said. "I think that's a better guide to what we're going to see next year now that those fiscal headwinds are past us."
On Day 2 of their meeting Wednesday, Fed policymakers are wrestling with how to gauge the strength of the economy. The Fed will release its policy statement and economic projections at 2 p.m. EST, followed bywhat's likely to be Ben Bernanke's final news conference as chairman 30 minutes later. Bernanke is stepping down on Jan. 31 at the end of his second, four-year term. Janet Yellen, the Fed vice chair, is expected to be confirmed this week to succeed Bernanke and become the first woman to chair the central bank.
Investors want to know if the central bank will start scaling back its $85-billion-a-month quantitative easing bond-buying program after this meeting or whether they'll keep the guessing game going into the new year.