Update on Statistics: Budget Cuts Threaten Core Indicators

By Maurine Haver
Chair, NABE Statistics Committee
President, Haver Analytics

With the economy in or on the brink of recession, everyone from Wall Street to Main Street is focused on reports of current economic indicators.  Just when reliable and timely indicators are needed most, resources devoted to their production at our federal statistical agencies have been cut, requiring the termination of data series or a reduction in sample sizes used to produce the data. 

Last year we were concerned about planned improvements that were not funded.  This year we are facing the loss of indicators themselves.  For example, the Bureau of Labor Statistics (BLS) has been forced to terminate all hours and earnings data reported for local areas as well as payroll employment for 65 small metro areas.   The BLS International Price Program has also eliminated a number of series including prices of transportation services such as passenger air fares, air freight, and crude oil tanker freight. The Census Bureau will discontinue its Survey of Alterations and Repairs in May.  The Bureau of Economic Analysis (BEA) will reduce the level of industry detail in its county data and will eliminate the benchmark capital flow tables that provide baseline data on industry-by-industry investment by type of investment.  This may only be the beginning.

Outdated CPI Samples Are Eroding Data Quality

Our economic statistics are fundamental to our work.  Most groups affected by government funding decisions have well coordinated lobbying programs to keep their interests in front of Congress.  We do not.  It may be obvious to us that given our service economy we need statistics on services, but the $8.1 million proposed in the President’s budget to undertake development of timely data on services was not included again in the proposed fiscal year 2009 Census Bureau budget.  We understand the importance of the consumer price index (CPI) to the federal budget, but updating the housing weights to reflect the distribution of our population in 2000 has also not been approved.  Our CPI continues to reflect a housing sample drawn from the 1990 Census.  And as we learned in the CPI teleconference of April 2,   this sample has eroded substantially since it was drawn in the early 1990s.

Education of the Congress and congressional staff about our economic statistics and why they are critical to our economy and free society is necessary if we have any hope of keeping a strong statistical system. As the NABE Statistics Committee has investigated holding educational seminars on Capitol Hill, we have been encouraged to visit local offices of our senators and representatives.  Staffs in local offices play an important role in communicating what is important to constituents.  They often are more accessible and have the time to listen to an argument that is difficult to communicate in a sound bite.  In New York, we invited Rep. Charles Rangel  (D-N.Y.), chairman of the House Ways and Means Committee, to speak to the local chapter at lunch.  This was the first step in beginning a dialogue with him on these issues.  

If we are to succeed, we must all work together.  We may ask you to write letters in support of agency budgets as the subcommittees meet to review fiscal 2009 funding.  But more importantly, you can undertake the education function right now in your own state and district.   If each and every one of us makes the commitment to schedule one meeting or write one letter to those who represent us, we will make an important difference.