[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.