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Census Budget Cuts Eliminate Data On Job Creators

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WASHINGTON -- As Congress focuses much of its attention on job creators and taxes, it's cutting funds to the agency that provides data on where job creators are and how taxes affect them.

A budget agreement that the House and Senate just released will slash the Census Bureau's budget to $888 million next year, down from $1.15 billion. President Obama had recommended $1.02 billion for 2012.

An internal Census Bureau assessment of how to deal with those cuts, obtained Wednesday by The Huffington Post, says the agency will have to slash major pieces of its planned work, including large parts of its Economic Census. Conducted every five years, the survey is key to assessing and understanding the nation's economic health.

Lawmakers ordered the bureau to conduct the economic survey, but at a cost of $124 million, the agency has decided to do triage. It will leave out parts in order to maintain other key surveys, and it will also cut elsewhere.

"These cuts mean we cannot fund the Survey of Business Owners in the 2012 Economic Census, a loss of much needed statistics on state and local pensions, scaling back 2010 Census data products, and evaluations and assessments that would help plan a more efficient, redesigned, and lower cost decennial census," the Bureau's assessment says.

It's the business owner survey that provides lawmakers and policy experts with data on how the majority of job creators -- smaller businesses -- are doing, which helps them figure out the impacts of tax policy. If the survey is not done, the government and experts will have to rely on data from 2007, before the recession, to make policy and decisions.

"If we don't have the business owner piece, we're missing a big part of the picture," said Maurine Haver, founder of Haver Analytics and a past president of the National Association of Business Economists.

"That is the one way as a nation we get a handle on entrepreneurship in this country," said Andrew Reamer, a research professor at the George Washington Institute of Public Policy. "If entrepreneurship is the key to the nation's future, I'm not sure why Congress wants to save a few million bucks when it means we're going to lose the picture of entrepreneurship in America."

"We really won't have good information," Haver said, explaining that judging the impacts of tax policies on job creators will become extremely uncertain and lawmakers will have no good way of finding out. "You certainly won't have a good basis to estimate revenue. The whole revenue side becomes more guesswork."

"Unless someone else wants to walk down the street and talk to these guys, there will be no certainty about what's going on with these guys," Haver said, noting that the Census Bureau surveys more than two million smaller businesses for the study.

Other planned Census cuts will also have consequences.

If the data from the last complete Census is not fully analyzed, the agency will not be making the most of the $13 billion it just spent for that, Reamer said.

And by curtailing planning for the next decennial survey, the bureau runs a huge risk of driving up costs in 2020. It estimates that costs will more than double if if cannot find ways to tabulate an American population that is becoming harder and harder to count through traditional methods.

"It is pennywise and pound-foolish," said Haver, who was most immediately concerned about the short-term impact. "At a time when we most need to understand what's going on in the economy and what policies are working, we're taking away the very information that's going to help us understand."

There is good reason to worry about planning for the 2020 survey. Before the last one, the Government Accountability Office identified numerous potential problems that threatened to bust the budget wide open. It had to abandon a faulty electronic scanning system, for example. The agency was ultimately able to fix the issues and came in about $1 billion under budget.

The notion of reducing planning is especially troubling to legislators who oversaw the Census in the past.

"It's like deja vu all over again," said Rep. Carolyn Maloney (D-N.Y.), the top Democrat on the Census Subcommittee in 2000. "After every decennial census that had to struggle to get done, Congress -- like clockwork -- forgets that the lack of planning funding leads to operational problems and cost overruns, which is how we ended up having to do a paper and pencil census again in 2010."

"Then the budget process starts cutting planning money all over again for the next decennial census, even before the numbers are all released from the last Census," Maloney said. "We will end up doing it again with paper and pencil in 2020 at this rate."

Ironically, the GAO, which headed off some of the problems last year, is also on the chopping block -- a fact that the analysts thought revealed a growing problem in the government's attitude towards facts.

"It seems like what Congress is intent on doing is dumbing down government," Reamer said. "They seem to want less intelligent government to deal with so many intractable problems. It's profoundly disturbing."

Michael McAuliff is a political reporter for The Huffington Post. Follow him on Facebook.

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