    [Analytical Perspectives]
    [Special Analyses and Presentations]
    [12. Strengthening Federal Statistics]
    [From the U.S. Government Publishing Office, www.gpo.gov]

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                      12.  STRENGTHENING FEDERAL STATISTICS

      Economic statistics are valuable tools that economists, policy makers,
    business leaders, and individual investors use to understand changes in
    our economy. The ability of our government, our citizens, and our
    businesses to make appropriate decisions about work, investments, taxes,
    and a host of other important issues depends critically on the
    relevance, accuracy, and timeliness of Federal statistics. Data on real
    Gross Domestic Product (GDP), the Consumer Price Index (CPI), and the
    trade deficit, for example, have a major impact on government spending,
    budget projections, and the allocation of Federal funds. They also are
    critical inputs to monetary, fiscal, trade, and regulatory policy.
    Economic data, such as measures of price change, have as well a
    significant influence on interest rates and cost-of-living adjustments
    that affect every American who runs a business, saves for retirement, or
    obtains a mortgage.
      Recent events provide two dramatic examples of why relevant, accurate,
    and timely economic data are so important. The shocking terrorist
    attacks last September and the subsequent ramp-up of security across the
    whole spectrum of American life raised many questions about the
    immediate and longer-term impacts on the economy. An equally important
    issue, which existed even before September 11, was the uncertainty over
    whether the economy was in, or about to enter, a recession. During
    turning points in the economy such as an economic slowdown, the accuracy
    and timeliness of data are especially critical. It is during these
    periods that fiscal and monetary policy can be most useful in correcting
    the path of the economy, but appropriate action depends on accurate,
    timely data. Thus the budget proposes essential increases to strengthen
    and update these key indicators of our Nation's economic performance to
    keep pace with changes in our economy's complexity, growth, and
    structure.
      Similarly, current, comparable data on the characteristics of the U.S.
    population are essential to monitor significant societal changes. Of
    great import in 2003 will be the continuing delivery of Census 2000 data
    products used to allocate locally each year nearly $200 billion in
    Federal funds alone. The Census Bureau continues to streamline the
    complex decennial census process and to introduce key innovations, some
    of which directly address concerns about the quality of data
    historically provided once a decade via the census ``long-form.'' The
    plan for the next decade is to completely re-engineer the 2010 Census in
    order to reduce operational risks, improve accuracy, provide more
    relevant data, and contain costs. This approach has three major
    components:
        a simplified 2010 Census and more timely data based on
              eliminating the decennial long form through implementation of
              the American Community Survey (ACS);
        a central, continuously updated address universe and
              associated geographical products employing satellite and
              Global Positioning System technology for use in all decennial
              census and demographic survey programs; and
        a well-tested and planned 2010 Census design produced
              through systematic development well before mid-decade
              operational testing.
      The American Community Survey is a revolutionary, structural
    initiative of the statistical system that will provide community
    profiles similar to those from the decennial census on a far more
    current basis. For geographic areas with populations greater than
    65,000, these profiles will be available every year beginning in 2004.
    For smaller areas, beginning in 2005 the ACS will accumulate or average
    data over several years to obtain annual estimates similar in quality
    and reliability to those currently available only once each decade.
    Thus, every jurisdiction ultimately will have annual information that
    portrays change over time. (The official counts of the population will
    continue to come from the decennial census and the intercensal estimates
    program.)
      Under the aegis of the congressionally-mandated Interagency Council on
    Statistical Policy (ICSP), the principal statistical agencies continue
    to extend their collaborative endeavors in other areas as well in order
    to improve the overall performance and efficiency of the Federal
    statistical system. For example, the ICSP continues to support FedStats
    (www.fedstats.gov), the ``one-stop shopping'' Internet site for Federal
    statistics that permits easy access via an initial point of entry to the
    wide array of statistical information available to the public from more
    than 100 Federal agencies. The FedStats team has updated its home page
    based on recommendations from a usability work group, and enhanced its
    MapStats section to provide an interactive map-based application to
    access a variety of data at the State, county, congressional district,
    and Federal judicial district levels as well as to offer thematic maps
    with population-based concepts for States and counties.
      The statistical system is also working effectively to enhance the
    quality of data the agencies produce. For example, statistical agencies
    have developed proposed data sharing legislation that would permit
    limited sharing of confidential data among selected agencies solely for
    statistical purposes. Enactment of this legislation will create a
    framework for statistical agencies to compare and improve the quality of
    their data.
      Despite these accomplishments, rapid changes in our economy and
    society, and funding levels that challenge statistical agencies to keep
    pace with them, can threat

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    en the relevance, accuracy, and timeliness of our Nation's key
    statistics. Any growing inability of our statistical system to mirror
    accurately our economy and society, including the unprecedented growth
    of electronic commerce, could undermine core government activities, such
    as the accurate allocation of scarce Federal funds. Fortunately, the
    most serious shortcomings of our statistical infrastructure would be
    substantially mitigated by four programs supported in the
    Administration's budget coupled with a legislative initiative. In
    particular, these activities would:
        develop an integrated statistical base for analysis of the
              effects of E-business across our Nation's products and
              industries, including changes in the structure of investment,
              pricing, and distribution practices (Bureau of Economic
              Analysis and Bureau of the Census);
        support the tabulation, analysis, and dissemination of
              Census 2000 data in order to reap the benefits of Census 2000
              investments (Bureau of the Census);
        support early planning for the 2010 Census predicated on a
              fundamental re-engineering of the census process (Bureau of
              the Census);
        continue implementation of the American Community Survey
              program to produce far more timely data for States and local
              areas that will be used for various purposes, including the
              distribution of nearly $200 billion in Federal funds annually
              (Bureau of the Census); and
        provide new statutory authority for the limited sharing of
              data among designated Federal agencies solely for statistical
              purposes. The proposed changes would permit these statistical
              agencies to manage information in many important respects as
              if they were part of a single agency, thereby increasing the
              accuracy of statistical estimates and the efficiency of
              Federal data collection.
      In addition, the statistical system is poised to play a significant
    role in the Nation's response to terrorism and demands to strengthen
    homeland security. Thus, the 2003 budget includes, for example:
        development of national data series based on administrative
              data from State and local units of government to estimate the
              incidence, prevalence, and consequences of terrorism including
              injuries, deaths, and other health consequences; to measure
              economic impacts including unemployment, workplace changes,
              and security expenses; and to develop information for other
              policy-relevant issues and responses (Bureau of Justice
              Statistics, National Center for Health Statistics, Bureau of
              Labor Statistics);
        support for national data on the incidence and consequences
              of cyber-related disruptions and attacks on the electronic
              infrastructure associated with both national and international
              access to networks and systems of records (Bureau of Justice
              Statistics, National Infrastructure Protection Center, Federal
              Trade Commission, Bureau of Economic Analysis); and
        initiatives to address the implications of the war on
              terrorism with respect to confidentiality of individual data
              reports, security of data systems, and contingency plans for
              continuing operations under emergency circumstances.
      More broadly, the programs that provide essential statistical
    information for use by governments, businesses, researchers, and the
    public are carried out by some 70 agencies spread across every
    department and several independent agencies. Approximately 40 percent of
    the funding for these programs provides resources for ten agencies that
    have statistical activities as their principal mission. (Please see
    Table 12-1.) The remaining funding supports work in 60-plus agencies
    that carry out statistical activities in conjunction with other missions
    such as providing services or enforcing regulations. More comprehensive
    budget and program information about the Federal statistical system will
    be available in OMB's annual report, Statistical Programs of the United
    States Government, Fiscal Year 2003, when it is published this summer.
    The following highlights elaborate on the Administration's proposals to
    strengthen the programs of the principal Federal statistical agencies.

     HIGHLIGHTS OF 2003 PROGRAM PROPOSALS FOR PRINCIPAL STATISTICAL AGENCIES

      Bureau of Economic Analysis: Funding is requested to move forward with
    critical improvements to the Nation's economic accounts that will: (1)
    accelerate the release of BEA's major economic statistics, which will
    dramatically increase the usefulness of these data, particularly for
    government and business decision makers; (2) upgrade the computer
    processing systems for the economic accounts, which will increase the
    efficiency and reliability of these critical systems and ensure that
    BEA's data are accurate, complete, and released on schedule; and (3)
    incorporate into the economic accounts the new, internationally
    developed North American Industry Classification System (NAICS), which
    will require BEA to integrate source data from statistical agencies that
    are converting to NAICS on variable time schedules.
      Bureau of Justice Statistics: Funding is requested to maintain BJS's
    core statistical programs, including: (1) the National Crime
    Victimization Survey, the Nation's primary source of information on
    criminal victimization; (2) the Cybercrime Statistical Program,
    initiated in 2001 to measure changes in the incidence, magnitude, and
    consequences of electronic or cybercrime; (3) law enforcement data from
    over 3,000 agencies on the organization and administration of police and
    sheriffs' departments; (4) nationally representative prosecution data on
    resources, policies, and practices of local prosecutors; (5) court and
    sentencing data; and (6) data

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    on correctional populations and facilities from Federal, State, and
    local governments.
      Bureau of Labor Statistics: Funding is requested to: (1) modernize the
    computing systems for monthly processing of the Producer Price Index
    (PPI) and U.S. Import and Export Price Indexes, improve index accuracy,
    and produce new data outputs such as experimental PPIs for goods and
    services that will provide the first economy-wide measures of changes in
    producer prices; (2) proceed with a significant change in the way the
    Consumer Price Index (CPI) is revised and updated by instituting a
    process for continuous improvement in place of the periodic major
    revisions that were undertaken about every ten years; and (3) continue
    to enhance the BLS information technology security program and replace
    its decade-old local area network (LAN) infrastructure with a more
    current and capable LAN system (through a central Department of Labor
    appropriation).
      Bureau of the Census: Funding is requested for Census 2000, 2010
    Census Planning, and the Census Bureau's economic and demographic
    programs. For Census 2000, funding is requested to: (1) complete
    dissemination of data products; (2) respond to concerns from local and
    tribal governments about the accuracy of the census counts; and (3)
    complete evaluations of census operations. For 2010 Census Planning,
    funding is requested to continue work to re-engineer the 2010 Census to
    reduce operational risks, improve accuracy, provide more relevant data,
    and contain costs by: (1) establishing an early design and testing
    infrastructure to allow complete testing of all major elements of the
    2010 Census design; (2) fully implementing the American Community Survey
    to collect data historically collected on the decennial census ``long
    form;'' and (3) continuing to replace the MAF/TIGER system with one that
    uses Global Positioning System technology and satellite mapping imagery
    to update and improve address information. For the Census Bureau's
    economic and demographic programs, funding is requested to: (1) support
    the data collection phases of the 2002 Economic Censuses and Census of
    Governments; (2) improve measurement of services in the new economy,
    mainly by the introduction of a quarterly service industry survey; (3)
    gather new information on business investment in information technology
    and on changes occurring in supply chain relationships; (4) improve and
    accelerate the release of trade statistics; and (5) redesign samples
    based on Census 2000 data for ongoing Federal household surveys that
    gather data on topics such as crime, employment, and health.
      Bureau of Transportation Statistics: Funding is requested to: (1)
    annualize the collection of freight flow data to keep pace with a
    rapidly changing industry; (2) improve the collection and analysis of
    aviation data, particularly data related to airline security and
    financial conditions; (3) enhance TranStats (the Intermodal
    Transportation Data Base) and expand the National Transportation
    Library, which provides access to the Nation's transportation research
    and planning literature via the Internet; and (4) work on the Safety
    Data Action Plan, a series of projects to improve the accuracy,
    comparability, and timeliness of transportation safety data.
      Economic Research Service: Funding is requested to: (1) support the
    Economic Research Service's share of re-engineering the Agricultural
    Resource Management Survey (ARMS), USDA's primary vehicle for collection
    of information on a broad range of issues about agricultural resource
    use and costs and farm financial conditions, to improve the quality of
    key economic indicators of the farm sector derived from the survey,
    improve the coverage of commodities surveyed, provide ARMS data for key
    farm states in addition to the Nation as a whole, integrate ARMS with
    other USDA data collections, and improve the dissemination of ARMS data
    over the Internet; and (2) examine economic issues with respect to
    invasive crop pests and livestock diseases within the context of
    increasingly global agricultural markets.
      Energy Information Administration: Funding is requested to: (1)
    continue updating and overhauling EIA's 20-year-old energy consumption
    surveys to base them on Census 2000 data; (2) complete the overhaul of
    electric power surveys and data systems to accommodate changes in the
    industry brought on by deregulation and restructuring; (3) continue
    improving data quality and accuracy in several key energy surveys
    (including petroleum, natural gas and electricity); (4) begin
    development of additional regional energy information; and (5) initiate
    a weekly survey of natural gas underground storage to replace one that
    the American Gas Association plans to discontinue.
      National Agricultural Statistics Service: Funding is requested to: (1)
    conduct the 2002 Census of Agriculture, which includes mailing three
    million questionnaires, capturing and editing data, providing assistance
    to respondents, conducting analyses of census returns, and summarizing
    census results; (2) enhance computer security protection to ensure
    confidentiality for reported data and to prevent unauthorized access to
    market sensitive data prior to public release; (3) develop and implement
    e-Gov strategies, including capabilities for electronic data reporting
    and enhanced services to the public; (4) develop an annual integrated
    locality-based county estimates program; and (5) in cooperation with the
    Economic Research Service, expand the Agricultural Resource Management
    Survey (discussed above).
      National Center for Education Statistics: Funding is requested to: (1)
    support the National Assessment of Educational Progress (NAEP) program,
    including administration of the State-level NAEP assessments that are an
    integral part of the accountability provisions included in the No Child
    Left Behind Act, (2) continue data collection, analysis, and reporting
    for a variety of surveys, including the Schools and Staffing Survey, the
    National Assessment of Adult Literacy, the National Household Education
    Survey, and the National Study of Faculty and Students; (3) enhance
    longitudinal surveys, including the Early Childhood Longitudinal

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    Study kindergarten and birth cohort data collections; and (4) continue
    work to enhance electronic data collection and dissemination.
      National Center for Health Statistics: Funding is requested to: (1)
    continue a multi-year effort to retool and improve national health data
    systems, including the Vital Statistics System, in order to more fully
    reflect data needs and utilize state-of-the-art technologies; and (2)
    provide information critical to monitoring the dynamics of health and
    health care, and provide the underpinnings for biomedical research,
    health policy, and public health practice through support of the
    National Health Interview Survey, the National Health and Nutrition
    Examination Survey, the National Vital Statistics System, and the
    National Health Care Survey.

                     TABLE 12-1.  2001-2003 BUDGET AUTHORITY FOR PRINCIPAL STATISTICAL AGENCIES \1\
                                                (in millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                     2001        2002        2003
                                                                                    actual     estimate    estimate
    ----------------------------------------------------------------------------------------------------------------
    Bureau of Economic Analysis.................................................         $50         $59         $70
    Bureau of Justice Statistics................................................          29          32          34
    Bureau of Labor Statistics..................................................         464         489         511

    Bureau of the Census........................................................      \2\478      \2\535         757
      Periodic Censuses and Programs............................................      \2\292      \2\336         522
      Salaries and Expenses.....................................................         186         199         235

    Bureau of Transportation Statistics.........................................          31          32          35
    Economic Research Service...................................................          69          70       \3\82
    Energy Information Administration...........................................          79          82          83
    National Agricultural Statistics Service \4\................................         106         119      \3\149

    National Center for Education Statistics....................................         120      \5\197         191
      Statistics................................................................          80          85          95
      Assessment................................................................          36      \5\108          91
      National Assessment Governing Board.......................................           4           4           5

    National Center for Health Statistics.......................................         126         131         130
      PHS Evaluation Funds......................................................          72          23          47
      Budget Authority..........................................................          54         108          83
    ----------------------------------------------------------------------------------------------------------------
    \1\ The budget data for each fiscal year are adjusted to include the full share of accruing employee pensions
      and annuitiants' health benefits. For more information, please see Chapter 14, ``Preview Report,'' in this
      volume.
    \2\ Does not include an offset to the appropriation of unobligated balances available.
    \3\ Beginning in 2003, ERS and NASS, rather than a central USDA account, will be responsible for paying their
      own rent. Therefore, the 2003 level includes an additional $2.8 million and $5.9 million, respectively, for
      these activities.
    \4\ Includes funds for the periodic Census of Agriculture and Special Studies of $15.0, $25.4, and $42.3 million
      in 2001, 2002, and 2003, respectively.
    \5\ Includes $17.0 million in administrative contract costs not necessary in 2003, consistent with the biennial
      assessment plan authorized in the No Child Left Behind Act.