"If you suggest taking money for heating away from people who will otherwise get cold, in favor of spending it on data gathering," you're going to find few people who'll agree with you.
With this remark, Charles Renfro of Chase Econometrics, also the editor of a journal on statistics called Review of Public Data Use, described one of the major problems facing the federal government statistical system:
He and other experts fear that President Reagan's budget cuts are a serious threat to some of the statistical series published by the federal government.
But with other government agencies and federal programs also being cut back severely, it's not easy to fight for more money for data gathering and compilation.
Cutbacks in statistics won't make anyone hungry. But they could make it harder for the government to make sound economic policy because officials will have less information on what is happening to the economy.
Fewer figures could hurt businesses that depend on federal statistics for planning; cut down the information that states and local governments, which are due to take on more responsibilities under the present administration, have on the areas that they govern; and they could reduce the data base that academics use for research on what is happening to the economy and why.
There are several thousand people scattered throughout the federal bureaucracy whose task it is to gather, collate, analyze and publish statistics. Last year, this cost the federal government about $1.1 billion out of a total budget of just over $660 billion. According to an official in the Office of Management and Budget, the total money available for the statistics services will shrink in the current fiscal year, despite rising costs and an increase in overall budget outlays.
What worries many statistics users is that there seems to be no overall plan for allocating the cuts in the statistical service.
The federal government has more than 70 statistical programs run by many different departments. Courtenay Slater, former chief economist at the Commerce Department, recently warned that a "lack of systematic coordination among agencies" and a "lack of a central focus for the congressional oversight of the statistical program" threaten the "quality and timeliness" of major economic data.
Nobel prize winner Wassily Leontief told a congressional committee last week that "the United States is the only advanced industrialized country that still does not possess a real, central statistical office responsible for collection, systematic organization and dissemination of facts and figures pertaining to population, natural resources, technology and other aspects of the national economy and society." He believes such a centralized office would improve economic policy.
There is an office responsible for coordination of statistical policy, but it has been steadily downgraded in recent years, Slater said. Last summer it was moved back into the Office of Management and Budget from the Commerce Department, where it had moved in 1977. The staff of the unit, which has dwindled from a high of 70 some 30 years ago, was cut in last year's move from 25 to an effective level of 11 or 12. oreover, as the office for statistical policy and standards is now part of OMB's Office of Information and Regulatory Affairs, there is overemphasis on the need to reduce the burden of data gathering and form-filling at the expense of safeguarding the statistics programs, some critics charge.
The head of the coordinating group has just left, further weakening its role in the current budget process.
The federal government's statistical programs vary widely in size from the tiny National Highway Traffic Safety Administration--with a 1981 budget estimated at $100,000--to the much larger Bureau of the Census in the Department of Commerce and Bureau of Labor Statistics in the Department of Labor.
There are important statistical programs in the Departments of Agriculture, Energy, Health and Human Services, Housing and Urban Development and Treasury, as well as the better known ones at Commerce and Labor.
These agencies produce statistics on all manner of topics, from vital statistics of birth and death to peanut production, to unemployment, to the size of the total U.S. economy.
The figures of most widespread interest usually find their way onto the front pages of the nation's newspapers, telling people what is happening to inflation, jobs and living standards. But these, as well as many of the more obscure statistical series, are subject to growing budget constraints.
Slater focused on the problems in compiling the U.S. National Accounts in a report for the Joint Economic Committee published at the end of last year. The national accounts give the figures for the Gross National Product and all its components, such as business investment, wages and salaries, spending, exports and imports in a "valuable road map of the economy."
They are produced by the Bureau of Economic Analysis in the Commerce Department, with about 425 people on a budget of just over $19 million, of which $2 million comes from other agencies to pay for statistical work done for them.
"Government analysts and policymakers utilize these estimates as the basic framework for assessing economic developments and forecasting future trends," Slater said. The White House uses them as a basis for economic policy decisions while academic researchers, politicians and commentators and others all watch them, too.
Because BEA gets most of its data from other agencies and private sources--with only 12 percent of its budget spent actually collecting figures--it is affected by cutbacks in other parts of the budget as well as in its own. The latter have been severe. At the end of fiscal 1978 there were 485 people employed in BEA, 60 more than today.
Slater picked out eight areas of recent or threatened cutbacks by other agencies that together would "add up to erosion in the quality and timeliness of the GNP accounts."
These include a slippage in the timing of compiling corporate tax data by the Internal Revenue Service, the elimination by the Department of Agriculture of the quarterly farm labor survey, and a reduction in the number of service industries covered by a monthly survey by the Census Bureau.
But despite outside criticism and warnings of the effects of new budget cuts, Robert Dederick, Reagan's assistant secretary for economic affairs at the Commerce Department, promises "regardless of budget constraints the quality of the statistics produced by Commerce will not be compromised."
He said a working group on economic statistics headed by White House official Richard Beal and Jerry Jordan of the Council of Economic Advisers is trying to ensure that cuts in the statistical services are coordinated and rational, and that there is general concern to maintain the "core" statistics of the national accounts. urther cuts in the Bureau of Labor Statistics budget for this year would "really hurt," Commissioner Janet Norwood said this month.
Norwood's agency is responsible among other things for the "most sensitive" of the federal government figures: inflation, employment and unemployment. The inflation figures help to determine the incomes of all those whose wage contracts include cost of living adjustments, or COLAs, or whose Social Security or unemployment checks from the federal government are tied to the Consumer Price Index.
Government spending also is affected by them. The Consumer Price Index determines automatically the size of various federal benefits. It has been criticized for exaggerating the inflation rate over recent years, and BLS has proposed changes to deal with this. These will be all the harder to carry out if the budget is being cut drastically.
Norwood hopes that a 4 percent additional cut in the 1982 BLS budget--which was legislated this fall on top of a 12 percent cut already agreed on--will be restored when the final appropriations bill covering the program is passed. Already BLS has made significant cutbacks in its programs and has delayed some scheduled improvements.
Local statistics are usually the first to be hit by budget cutbacks, Norwood said. They are very expensive to gather and are seen by the central bureaucracy as less important than national data. BLS had planned to improve the local unemployment statistics but has now reduced the resources for the improvements.
Local economic data has been used as a basis for allocating federal funds for some social programs to the states, Renfro pointed out. Now that many programs, such as the Comprehensive Training and Employment Act (CETA) have been cut back, these figures are needed less.
But as so much data and experience is built up over a long time, cutbacks today in the quantity of data will go on having an effect for some time.
Katherine Wallman, who recently left the federal government after 14 years to become the first full-time director of the Council of Professional Associations on Federal Statistics, commented last week that her organization was "very concerned that some of the cuts being made now will have long-term implications, not just a one-year effect."
There is widespread agreement even among the critics of the federal statistics operation that the work is professional and nonpolitical and that the individual agencies use their resources efficiently.
The best way to keep this reputation is to cut out whole series of statistics, particularly those with the most technical problems, rather than to dilute the quality across the board, experts say.
Budget cuts may therefore leave the core statistics, particularly those on the economy that attract most attention, relatively unharmed. But that is little consolation for the users of those numbers that are stopped altogether.