Sequestration Guts The Government’s Ability To Collect Economic Data


econdataThe automatic, across-the-board sequestration budget cuts are impacting the country’s 14 economic statistics agencies, forcing them to eliminate or delay reports on topics such as income, energy use, and global labor costs, reports Bloomberg News.

For example, the Department of Agriculture eliminated census reports on commodities such as flowers, hops, catfish, rice, and the mink population, which cost $8.4 million to compile. “Without the data,” the article notes, “farmers have to guess about what’s selling.” The Bureau of Labor Statistics cut the International Labor Comparisons Program, which looks at data on pay, productivity, unemployment and other measures of the global workforce. In its place, a not-for-profit group called the Conference Board made up of multinational corporations, insurers, and unions will try to replicate it.

Some eliminated reports have been brought back thanks to industry pressure. The Department of Agriculture will resume its quarterly milk report after lobbying from the dairy industry. The flower survey will remain cut to cover the cost.

These agencies cost very little compared to the value they add for companies and the economy. All told, they cost taxpayers less than $3.8 billion. The Bureau of Economic Analysis, which has considered eliminating its monthly report on personal income and spending, has a budget of just $90 million to track the $16.7 trillion economy. “The return on taxpayer investment is almost infinity,” Andrew Reamer, a professor at George Washington University and member of the BEA’s advisory committee, told Bloomberg.

Meanwhile, putting the data into private hands may prove to be a risky solution. Some private firms may be engaged by someone with an agenda, which means “you get estimates that may be too positive or too negative,” says Maurine Haver who owns such a firm, Haver Analytics, and also serves on the BEA committee.

Republicans on the House Appropriations Committee have approved even further cuts for agencies that collect data such as Agriculture, Labor, and Energy, although lawmakers balked at actually passing those cuts in July.

Sequestration’s impact has been far-reaching and devastating in many other ways. The Department of Defense has furloughed hundreds of thousands of employees. The long-term unemployed are getting smaller checks. Thousands of low-income preschoolers have been kicked out of Head Start. The home-bound elderly are getting fewer visits from Meals on Wheels. Public schools across the country are grappling with budget cuts. Domestic violence shelters are offering fewer services. Low-income families have had their housing vouchers taken away. The programs that have reduced homelessness are pulling back.

And the country’s financial health would be better without the automatic cuts. The deficit would look better if they were reversed. Plus it could add as much as 1.2 percent to GDP and 1.6 million jobs.