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Census Budget: House Bill Would Gut Economic Monitoring, Endanger GDP And Other Stats

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CONGRESS DATA COLLECTION CENSUS BUREAU CUTS

WASHINGTON -- If you think Congress doesn't understand the economy now, wait till you see what a key House panel wants to do to the people who help figure it out.

Lawmakers are taking on the budget for the Census Bureau, pushing cuts that could leave economists and businesses in the dark about key economic information even as they are trying to map a path through a treacherous, uncertain economy.

The House Appropriations Committee is set to put the final touches on a funding bill Wednesday that proposes to slash the government's data collection arm by 25 percent -- a cut that economists and statistics experts say could end up costing taxpayers and businesses billions.

"It's essentially turning out the lights as economic policymakers are trying to do their work," said Andrew Reamer, a George Washington University professor who focuses on economics and U.S. competitiveness.

The bill is the Commerce, Justice and Science appropriations measure for 2012, and the cuts in question target the Commerce Department's Census Bureau -- recently one of the bogeymen of the right. The cuts would take effect in October, leaving the bureau little time even to plan to mitigate the impacts.

And those impacts would be many. The Census Bureau declined to comment, but a member of Congress was willing to pass along the agency's estimate of what the cuts could mean.

"It would have major, permanent impacts on the nation's economic and demographic statistics," the bureau said, according to Rep. Carolyn Maloney (D-N.Y.), a member and past chair of the House Joint Economic Committee.

"The Census Bureau would have to terminate major statistical programs, cease critical data collection and vital benchmark reports on the nation's economy, population and housing, as well as lay off off as many as 700 employees," the agency warned. "It would take years to recover from the loss of experienced career analysts, scientists and demographers who are the foundation upon which the nation's vital statistics rest."

To Maloney and others, that assessment is not hyperbole or exaggeration by an agency bent on self-preservation, but an accurate and alarming statement by the people who collect the data that decision-makers need to make sound economic choices.

"It leaves me rather speechless, actually," said Maurine Haver, the head of the National Association of Business Economists' statistics committee. "I just don't understand it."

Experts on the Census said there are several programs the bureau runs that could be affected by the proposed cuts. One is the $124 million Economic Census, which serves as the benchmark for the nation's fiscal reports, including evaluations of the Gross Domestic Product, jobs data and economic activity across industries.

"The Economic Census is the foundation for the country's most important measures of our economy," Maloney said. "A cut to the Census Bureau of this magnitude will undermine the confidence in our fundamental economic statistics, like the GDP."

Another large part of Census Bureau's work is the American Community Survey, which was expected to be funded to the tune of $250 million, but could now face cuts. That survey interviews some 3.5 million Americans annually to draw a detailed portrait of the nation that is used by every level of government and many businesses.

That information is deemed so vital to businesses that last week the U.S. Chamber of Commerce implored the Appropriations Committee to preserve Census funding.

"The Chamber strongly urges you to fully fund the Administration's request for the U.S.
Census Bureau's American Community Survey for [2012]," wrote the Chamber's Bruce Josten. "ACS data points are critical for business decision-making and long range planning. The business community uses census information daily to drive sound investment decisions affecting the allocation of resources throughout the country."

Two other major programs in the agency's budget: planning for the next decennial census in 2020 and winding down the 2010 survey.

Cutting either could have drastic effects, experts said. On the planning front, officials fear that the cost of the 2020 head count could come in at a staggering $30 billion, because of population growth and the increasing difficulty getting people to fill out the forms. This estimate comes after the cost of the 2010 Census came in at nearly $13 billion, more than $1 billion under budget.

Census officials plan to spend about $100 million developing and testing methods to cut costs, including using the Internet and social media and other new technologies. But if that planning money is cut, taxpayers would face a much larger price tag for the 2020 Census.

"This is catastrophic," said Steve Pierson, with the American Statistical Association. "The reason this is so shortsighted is that saving this money now could cost billions of dollars down the road."

Nor would cutting the final work on the 2010 census be a better option, Pierson said, because that data will be used to allocate some $400 billion a year for the rest of the decade. There are always flaws in the initial Census count, and correcting them plays a major role in ensuring that money is spent properly, he said.

While data experts find the idea of cutting the Census inexplicable, House Appropriations Chairman Rep. Hal Rogers (R-Ky.) said it was just a matter of making tough cuts in a tough budget.

"This legislation roots out extraneous, duplicative and unnecessary programs while prioritizing some of the most critical aspects of government," said Rogers at a subcommittee working session last week.

The Appropriations Committee was aiming for an overall 6 percent cut to the Commerce, Justice and Science budget and hoping to boost some functions at the FBI, the Patent Office and trade agencies; it decided to whack the Census Bureau disproportionately. President Obama's proposal already sought to cut the bureau's budget from $1.15 billion to $1.02 billion. But the appropriators decided on $855 million, meaning an additional $169 million in cuts would have to be made. The result would be a loss of $294 million, or 25 percent of the agency's current budget.

A committee aide who declined speak on the record pointed out that even if the Census Bureau is cut, there would be little impact on the people who crunch the Census data to come up with figures like GDP -- the Economic and Statistics Administration -- because that office is untouched by the cuts.

But the experts noted the ESA uses data collected by the Census.

"There's a misunderstanding if they think the Census has nothing to do with GDP," said Reamer.

"That's false, absolutely false," echoed Haver. "The basic data that go into the national accounts are born at the Census Bureau."

Still, the survey has fallen into disfavor and suspicion recently, especially on the right.

Rep. Michele Bachmann (R-Minn.) famously declared she would not fill out her 2010 Census form, even though doing so is required by the Constitution and law. Bachmann even raised the specter of the World War II-eraJapanese interment camps to argue against the Census.

Rep. Ted Poe (R-Texas) has sponsored legislation with Bachmann to make the American Community Survey voluntary instead of a requirement, calling it "Big Brother at its worst."

Rogers has been hostile to the Census budget since at least 1996, and recently slammed the Census' corrective and money-saving sampling as "inane" in a blog post on The Hill.

Census bashing got especially virulent on right-wing radio and TV, with figures such as Neil Boortz suggesting the Census is meant to help the government "steal from you" to give to the "moochers."

The CJS funding bill also reveals some suspicion of the White House with a prohibition on page 103 of the bill: "None of the funds made available in this Act may be used to relocate the Bureau of the Census or employees from the Department of Commerce to the jurisdiction of the Executive Office of the President."

Statisticians and economists did not want to comment on what might be motivating lawmakers to slash the Census, but Haver did note that collecting less information is good only for people who are not interested in answers.

"I just have no clue what they are thinking," Haver said. "If you want to run the country not based on information but just based on your ideology, this is fine -- if you don't need to know what's going on out there."

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