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Census Bureau: GOP Budget Guts Economic Data

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Data used by economic leaders such as Treasury Secretary Tim Geithner would become much less reliable if Republican cuts go through, the Census Bureau warned. | Getty

WASHINGTON -- The House Republican budget plan will do "irrecoverable" damage to the nation's economic data, the Census Bureau warned in a harsh internal assessment obtained by The Huffington Post.

Economists and statistics experts had already sounded the alarm over a 25 percent cut to the Census budget after an Appropriations subcommittee proposed it, warning it would endanger the nation's economic census -- the benchmark for nearly all the country's financial measurements.

But the full committee went ahead approved the $294 million reduction this week as part of a Commerce, Justice and Science budget bill that cuts other agencies far less dramatically.

"These cancellations would be irrecoverable and would force the complete abandonment of the economic census for the 2012 cycle," the Bureau warned in an uncharacteristically strong statement leaked to The Huffington Post.

"We would hinder our nation’s ability to measure its economic growth and well-being," the bureau said. "These statistics are critical to the competitiveness of U.S. businesses and industries."

The economic census surveys some 85 percent of the country's economy and provides the data for determining the Gross Domestic Product. The bureau also releases monthly, quarterly and annual reports on retail, trade, manufacturing, construction and other parts of the economy.

"Without the economic census, it would be difficult for the Census Bureau and other federal agencies to provide timely and accurate information on the health and strength of the U.S. economy," the bureau warned.

An Appropriations Committee spokeswoman responded that the bureau was pulling a Chicken Little act.

"Bureaucratic government agencies will almost always claim the sky is falling when their budgets are cut," said spokeswoman Jennifer Hing. "Contrary to this misleading statement by the Census Bureau, businesses and industries will not be adversely affected by this proposed cut."

"The Census Bureau just completed a costly census that was riddled with questionable management decisions, and will not have to complete another decennial census for nine more years," Hing added. "The Committee believes that the funding level in the bill is adequate for the Census Bureau to maintain core operations for the next fiscal year, while saving tax-dollars that can be used on higher priority programs and to reduce the nation’s crushing deficit.”

The bureau's budget for 2011 is $1.15 billion. President Obama recommended cutting it to $1.02 billion for 2012, but the committee went even deeper, settling on $855 million -- $169 million more than the president's cut. The economic census alone costs $124 million, meaning that even after cutting that, the bureau would have to find other things to eliminate.

Committee Democrats found the proposed slashes indefensible. "The economic data the bureau provides is critical," said Ryan Nickel, a spokesman for the committee minority. "Republicans are once again kicking expenses down the road for somebody else to deal with. This 'cut-at-any-cost' budgeting is incredibly short-sighted."

Observers suspect that in normal times, the Senate would restore enough of the cuts so that the economic data could still be collected. But with such turmoil around the nation's spending, some worry that anything could happen.

If the cut goes through, the Census Bureau noted that businesses and decision makers would lose one of their best tools at a time when the economy is in especially bad shape.

"Businesses would lose an important tool to make investment and production decisions, and communities would lose a critical source of information for economic forecasting and planning," the bureau said. "Trade associations, companies, and researchers use the statistics for economic planning, market analysis and investment and production decisions."

Such data has been collected for some 200 years, except for when the Eisenhower administration caused a furor in 1953 by suspending Census collection. The outcry by business leaders then led to a commission that reinstated the data collection. The U.S. Chamber of Commerce has come out against the proposed cuts.

UPDATE 5:00 p.m.:

Census Director Robert Groves weighed in on the cuts Friday afternoon on his official blog, echoing the concerns of the internal assessment.

"A cut of this magnitude in our periodic programs account means we cannot do all the work the Congress has asked us to do," Groves wrote.

"Our ability to provide high quality and comprehensive statistical data will be severely diminished if we sustain such a large budget cut and we will be forced to cancel major programs that provide critical benchmark measures."

Rep. Carolyn Maloney, former chair of the Joint Economic Committee, accused the GOP of blaming the Census Bureau for problems from the Bush administration.

“I believe the GOP Appropriations Committee misfired in attempting to cover their tracks over cutting funding for the data used by America's businesses, job creators and the government, that lets us know how our economy is doing," Maloney said in a statement.

"Let’s be clear, the questionable management decisions that the committee is referring to were made by the Bush Commerce Department," she said. "It was President Obama who inherited a problem Census from the prior administration and put in place a team that delivered ahead of schedule and under budget with what is acknowledged by experts to be a high quality Census."

"The fact the GOP mistakenly believes the ten year population count is the only job Congress has given to the Census Bureau explains how they have bungled the funding for the nation's benchmark economic data," Maloney added. "They are lashing out at the Census Bureau for explaining the impact of the majorities’ cuts because of the heat they are taking from the business community and economists."

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