Landefeld Describes Cuts in BEA Data as Budget Is Trimmed

In response to a significant reduction in funding for the current fiscal year, the Bureau of Economic Analysis has announced a series of cutbacks in economic data programs, including elimination of a survey on new direct investment survey and reduced detail in several published data series.

“We did not do this lightly, but we had to protect the core statistics,” BEA Director J. Steven Landefeld told a May 8 meeting of the NABE Statistics Committee. 

Turning to the proposed fiscal 2009 budget, currently before Congress, Landefeld said there are proposed increases in the agency’s budget for measures of health care spending, which would result in a “new satellite account that would provide more accurate and more detailed information on the expenditures of the health care industry and the cost of treating specific diseases.”  Also, the proposed budget includes an initiative to measure the impact of research and development on real gross domestic product and productivity.

Reductions in key economic measures come as private forecasters and government economists alike are trying to gauge whether the U.S. economy is in recession and how long the downturn will persist. Maurine Haver, chair of NABE’s Statistics Committee, pointed out in her column for the April issue of NABE News that while in prior years, members were concerned about the elimination of planned data improvements, “this year we are facing the loss of indicators themselves.”   Other data agencies are affected as well, including the Bureau of Labor Statistics, which failed to receive funding for critical updates of samples used to construct the consumer price index http://nabe.com/publib/news/08/04/16.html.

In February, when the White House sent Congress its proposed budget for fiscal 2009, which begins Oct. 1, 2008, BEA and other data agencies were in the early stages of deciding how to deal with lower funding levels than requested for fiscal 2008.   BEA received appropriations totaling $77.2 million for the current year, which is about $4 million below the amount requested in the president’s budget. A proposed improvement in the measurement of research and development was not approved, so was put on hold but included as part of BEA’s fiscal 2009 budget request http://nabe.com/publib/news/08/02/06.html.

Landefeld said that because the current year’s (FY 2008) appropriations bill does not provide full funding for the agency’s existing programs, BEA will take the following actions “to align base programs” with the approved budget:

• Eliminate the survey of new direct investment in U.S. companies by foreign companies;
• Reduce the level of detail collected in surveys of the operations of multinational companies;
• Eliminate the benchmark capital flow tables that provide baseline data on industry by industry investment by type of investment;
• Reduce industry detail in county data from the North American Industrial Classification System (NAICS) subsector level to the sector level;
• Eliminate reconciliation of Internal Revenue Service (IRS) taxable income and NIPA personal income and annual table showing personal taxes on the basis of liabilities;
• Eliminate production of gross domestic product statistics on a seasonally unadjusted basis.

In addition, as a result of a shortfall of reimbursable funding, BEA will discontinue its quarterly travel and tourism estimates.

In announcing the cuts, BEA officials said they considered the impact on core measures.  The agency identified three criteria used to determine which of its data programs are
core statistics:  (1) statistics that feed into the estimation of gross domestic product and related statistics, (2) statistics required by law, or (3) statistics required for administration of federal programs.

For more information on BEA’s analysis of its fiscal 2008 budget situation, go to: http://www.bea.gov/agency/availability_and_quality_of_data.htm