BEA, BLS Face Possible Cuts in Major Programs

Because Congress postponed final action on most fiscal 2007 appropriations bills, the three major federal statistical agencies face possible funding reductions that would affect key economic data programs. Late Dec. 8 in its lame-duck session, Congress approved a continuing resolution (CR) that runs through Feb. 15, 2007, a deadline that will require either passage of individual appropriations bills or another CR that could extend through the entire fiscal year, which ends on Sept. 30, 2007.

Both the Bureau of Economic Analysis and the Census Bureau are included in the appropriations bill that covers the Department of Commerce.  The Bureau of Labor Statistics is included in the bill that covers the Department of Labor.   [See an interview with outgoing Census Director C. Louis Kincannon in this issue for the latest information on the Census budget.]

BEA Cuts Might Affect Multinational, Off-Shoring Data

When President Bush presented his FY 2007 budget request to Congress in February, it included $76.5 million for BEA to produce its economic accounts statistics.  The House acted in mid-summer with a slightly lower recommendation and the Senate Committee on Appropriations matched the president’s request.  However, the appropriations process in the Congress stalled and the appropriations bill that funds BEA has not yet been completed.

Under the continuing resolution, BEA is funded at the amount recommended by the House or the Senate, or at the level set for the previous fiscal year, 2006--whichever is the lowest. Given the uncertainty over Congressional action next year, BEA officials said there are a number of possible scenarios on how the FY 2007 funding request will be completed; all of which include reductions to BEA programs.  To address program cuts due to budget shortfalls, BEA has established three criteria to set spending priorities.  The highest priority programs at BEA are: (1) estimates that feed into the gross domestic product and other core accounts, (2) estimates required by law, and (3) estimates used to implement federal programs.  Under the House mark, BEA would have to absorb $2.5 million in FY 2007 that would require taking the following actions:

• Reducing the frequency and detail of data on the operations of multinational companies.  These data are used to understand off-shore outsourcing.  
• Deferring implementation of various recommendations to improve economic estimates made in reports on off shoring and on using tax data in the economic accounts.

BEA officials said that if a full-year CR were enacted, it would require additional reductions.  These cuts would most likely come from reductions in the detail and frequency of BEA’s regional data, particularly the metropolitan area and county personal income and details in the GDP by state estimates.  BEA officials said the agency continues to work hard to produce the most accurate, timely, and relevant statistics under a very tight fiscal environment and an uncertain budget future.  BEA looks forward to continuing to work closely with NABE and other users to help prioritize its work in order to produce the information needed for important economic decisions, officials said.

BLS Funding Reductions Could Impact CPI Updating

Under the continuing resolution that runs through Feb. 15, the Bureau of Labor Statistics is funded at last year’s levels, resulting in putting some program updates on hold.

 “Undoubtedly, a year-long CR would significantly impact core BLS programs as well as delay the 2007 initiative to implement a more representative and current sample of geographic areas and a continuously updated housing sample in the consumer price index,” said Emily Barrington, BLS deputy associate commissioner for administration.

In their markups of the FY 2007 Labor-HHS-Education appropriations bill, the House and Senate Appropriations Committees were supportive of the BLS request for $563.3 million, which includes $8.0 million to introduce continuous updating of the housing and geographic area samples used in the CPI, Barrington said.  “This important initiative will continue the conversion to updating the CPI on a continuous basis and will improve the timeliness and the accuracy of the CPI,” she said.

The House committee markup also includes $2.0 million above the request level to expand the American Time Use Survey (ATUS).  The increase will support a biennial module on rotating topics, with a food use module conducted every fourth year, as well as improve the response rates and support research on non-response bias.  The Senate markup did not contain funding for this expansion.