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

Congress Data Collection Census Bureau Cuts

First Posted: 07/12/11 01:27 PM ET Updated: 09/11/11 06:12 AM ET

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."

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