[Joint House and Senate Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-516

  THE ECONOMIC IMPACT OF ENDING OR REDUCING FUNDING FOR THE AMERICAN 
            COMMUNITY SURVEY AND OTHER GOVERNMENT STATISTICS

=======================================================================

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 19, 2012

                               __________

          Printed for the use of the Joint Economic Committee















                  U.S. GOVERNMENT PRINTING OFFICE

75-115                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001







                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

SENATE                               HOUSE OF REPRESENTATIVES
Robert P. Casey, Jr., Pennsylvania,  Kevin Brady, Texas, Vice Chairman
    Chairman                         Michael C. Burgess, M.D., Texas
Jeff Bingaman, New Mexico            John Campbell, California
Amy Klobuchar, Minnesota             Sean P. Duffy, Wisconsin
Jim Webb, Virginia                   Justin Amash, Michigan
Mark R. Warner, Virginia             Mick Mulvaney, South Carolina
Bernard Sanders, Vermont             Maurice D. Hinchey, New York
Jim DeMint, South Carolina           Carolyn B. Maloney, New York
Daniel Coats, Indiana                Loretta Sanchez, California
Mike Lee, Utah                       Elijah E. Cummings, Maryland
Pat Toomey, Pennsylvania

                 William E. Hansen, Executive Director
              Robert P. O'Quinn, Republican Staff Director

















                            C O N T E N T S

                              ----------                              

                     Opening Statements of Members

Hon. Carolyn B. Maloney, a U.S. Representative from New York.....     1
Hon. Kevin Brady, Vice Chairman, a U.S. Representative from Texas     3

                               Witnesses

Kenneth D. Simonson, Chief Economist, Associated General 
  Contractors of America, Vice President, National Association 
  for Business Economics, Washington, DC.........................     6
Andrew Reamer, Research Professor, George Washington University 
  Institute of Public Policy, Washington, DC.....................     8
Hon. Keith Hall, Senior Research Fellow, Mercatus Center, George 
  Mason University, Former Commissioner, Bureau of Labor 
  Statistics, Arlington, VA......................................    10
Hon. Grant D. Aldonas, Principal Managing Director, Split Rock 
  International, Washington, DC..................................    12

                       Submissions for the Record

Prepared statement of Hon. Carolyn B. Maloney....................    28
Prepared statement of Vice Chairman Kevin Brady..................    29
Prepared statement of Mr. Kenneth D. Simonson....................    31
Prepared statement of Dr. Andrew Reamer..........................    38
Prepared statement of Hon. Keith Hall............................    52
Prepared statement of Hon. Grant D. Aldonas......................    56
Prepared statement of Hon. Vincent P. Barabba....................    67
    Letter dated October 27, 2011, to Hon. Frank Wolf............    70

 
  THE ECONOMIC IMPACT OF ENDING OR REDUCING FUNDING FOR THE AMERICAN 
            COMMUNITY SURVEY AND OTHER GOVERNMENT STATISTICS

                              ----------                              


                         TUESDAY, JUNE 19, 2012

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 2:30 p.m., in Room 
210, Cannon House Office Building, Hon. Carolyn B. Maloney 
presiding.
    Representatives present: Maloney, Brady, Burgess, Campbell, 
Duffy, Mulvaney, and Cummings.
    Staff present: Conor Carroll, Gail Cohen, Colleen Healy, 
Patrick Miller, Robert O'Quinn, and Christina Forsberg.

     OPENING STATEMENT OF HON. CAROLYN B. MALONEY, A U.S. 
                  REPRESENTATIVE FROM NEW YORK

    Representative Maloney. The meeting will come to order.
    I am Congresswoman Carolyn Maloney, and I want to thank 
Chairman Casey for working with me to hold today's hearing. I 
wish we were having a hearing on job creation. Instead, we are 
having one on why the House voted to strip job creators of the 
tools they need to grow the Nation's economy, expand exports, 
and hold us in the government accountable for how well the 
country is doing.
    Right now there is a concerted effort to cut funds for the 
Census Bureau and eliminate several of the vital surveys they 
conduct, or weaken them, by telling our nation that certain 
crucially important surveys should not be required for all of 
its citizens.
    In studying this issue, I remember reading about what 
Representative James Madison said when he served in this House. 
He wrote, and I quote, ``This kind of information all 
legislators and legislatures had wished for, but this kind of 
information had never been obtained in any country. If the plan 
were pursued in taking every future census, it would give 
Congress an opportunity of marking the progress of the society 
and distinguishing the growth of every interest,'' end quote.
    This is not a fight about the funds for these surveys or 
the best return on the taxpayer investment--because I think we 
will hear today that it is. It is a fight over ideology. This 
is a slippery slope where ideological bullies threaten the 
trust, confidence, and independence of our nation's most 
critical statistics.
    As we continue to compete in a world economy, it is 
imperative that we know how we are doing relative to other 
global economies. In our current economic times, it makes no 
sense to stop collecting such invaluable information that 
guides economic recovery and growth.
    Let me be clear. The surveys that the House voted to 
eliminate are the best measurement of our nation's progress. 
The information from the American Community Survey and the 
Economic Census allow both the private and public sectors of 
our economy to be more efficient. And because we are more 
efficient, they allow us to be better able to compete globally 
and maintain our standard of living. It is that simple. Doing 
away with these surveys or weakening some by making them 
voluntary hurts the Nation and takes away a competitive 
advantage.
    The American Community Survey is unique for its ability to 
produce annual economic and social data for the Nation down to 
the smallest geographic areas. Policymakers and Federal 
agencies use census information to distribute more than $450 
billion in Federal funds to State and local governments based 
in whole or in part on ACS data. Local governments use ACS 
information to decide where to build new roads, schools, and 
hospitals. But it is not just government that uses this 
information. The private sector, the business community, the 
job creators use it to make assessments about local labor 
force, new markets, and customer needs.
    The Economic Census also is under threat with funding cuts, 
meaning the 2012 effort would be halted even as the Bureau is 
ramping up to distribute the survey to thousands of businesses 
in the coming months. The Economic Census is the fundamental 
building block of the gross domestic product and national 
income and product accounts and is essential to accurately 
measuring industrial productivity, changes in price indexes, 
and annual and quarterly indicators of business activity.
    In a letter this fall to the House and Senate 
appropriators, six former bipartisan Census Bureau directors 
noted that absent the 2012 Economic Census, public and private 
decision-makers would have to use a 2007 model of our country's 
economy until 2022. The former directors, who collectively led 
the Bureau for four decades, serving six Presidents from both 
political parties, stated, and I quote, ``Going without a 2012 
Economic Census in the midst of the worst recession in half a 
century is akin to turning off the country's economic GPS at 
the very moment that it is critically needed,'' end quote.
    This is deja vu all over again. We had this debate when we 
were a new nation, and Madison and Jefferson strongly urged 
Congresses to put questions about age, gender, citizenship, 
occupation, manufacturing, and industry on census forms over 2 
centuries ago. We had it again during the Eisenhower 
administration when Congress failed to fund the Economic 
Census, and the outcry gave us the 1954 act that mandated an 
Economic Census every 5 years. We had it again on the eve of 
the 1970 census, when Senator Ervin held 3 days of hearings 
about the long form.
    Each time, Congresses came to their senses and turned to 
the census experts to professionally design the surveys and 
questions needed by the Nation in a manner that put the least 
burden on the public. This time it is different, as the House 
has effectively defunded both the American Community Survey and 
the Economic Census without so much as a witness, let alone a 
hearing or a meaningful debate. This Congress should not be the 
first in history to deny itself the executive State and local 
governments and the Nation's business communities information 
that the Founders and every Congress since have judged 
essential for a growing, prosperous nation.
    Today, we are trying to remedy that by hearing from some 
experts on the impacts of this stunning negative decision. My 
hope is that this hearing causes the Congress to reconsider its 
impulsive decision and that we act quickly to fully restore 
funding to these programs and give the job creators the tools 
we promised them and that we have provided as a nation for two 
centuries.
    I yield back. And it is now my pleasure to recognize my 
good friend and colleague, Vice Chairman Brady, for up to 5 
minutes or as much time as he may need.
    [The prepared statement of Representative Maloney appears 
in the Submissions for the Record on page 28.]

 OPENING STATEMENT OF HON. KEVIN BRADY, VICE CHAIRMAN, A U.S. 
                   REPRESENTATIVE FROM TEXAS

    Representative Brady. Great.
    And I join with Chairwoman Maloney in welcoming and 
thanking our witnesses for appearing today.
    The Joint Economic Committee has a long history of interest 
in the accuracy, the relevance, and the timeliness of U.S. 
economic statistics. Washington relies upon these statistics to 
make policy decisions, and American job creators use these 
statistics to make employment and investment decisions.
    I wish this hearing had been called to make a broader 
inquiry into the accuracy, relevance, and timeliness of all 
U.S. economic statistics instead of focusing merely on the 
American Community Survey. But since this committee is unlikely 
to have another opportunity during this Congress to explore how 
to rectify the deficiencies in U.S. economic statistics, 
Republican members of this committee will not confine our 
inquiry to solely the American Community Survey. Instead, the 
witnesses invited by our side of the aisle--Mr. Grant Aldonas, 
Dr. Keith Hall--will broadly explore how Congress and U.S. 
statistical agencies can work together to improve the quality 
of economic statistics for the benefit of the American people.
    Frankly, this hearing is being held, as Carolyn Maloney 
pointed out, because the House of Representatives agreed to two 
amendments in the appropriations bills for fiscal year 2013 
that cover the Census Bureau. One would prevent the Census 
Bureau from using funds to compel Americans to fill out the 
American Community Survey; the other would defund it 
altogether.
    Compulsory participation in the American Community Survey 
is the number-one objection that lawmakers, and my constituents 
frankly, hear. In my opinion, this objection swayed the 
majority of the House on these two amendments concerning the 
Census Bureau.
    Recognizing the importance of the statistics generated by 
the American Community Survey to economic decision-making by 
both governmental and private entities, I believe that there is 
a way forward. As former Commissioner Hall will testify, 
participation in the monthly Current Population Survey that 
generates the unemployment rate and other unemployment 
statistics is voluntary. The Bureau of Labor Statistics and the 
Census Bureau jointly designed the Current Population Survey in 
such a way as to generate accurate statistics on a voluntary 
basis.
    If the Census Bureau were to make participation in the 
American Community Survey voluntary as well, rather than 
compulsory, I think most public opposition would disappear. The 
Bureau of Labor Statistics and the Census Bureau can jointly 
use a voluntary survey to obtain the necessary data from the 
Current Population Survey to generate accurate employment 
statistics, so why can't the able statisticians at the Census 
Bureau design a voluntary survey for the American Community 
Survey that would do the same?
    Now, let me turn to other issues. I have long been 
concerned about the quality of our statistics measuring 
international trade and investment flows in the output of the 
services sector. For example, we cannot accurately count the 
number of jobs created by exports by sales for American goods 
and services. Moreover, we rely on outdated rules of origin 
that ignore the global supply chains of today, and we 
attribute, for example, all the value of an iPhone assembled in 
China as a Chinese export even though final assembly accounts 
for only 8 percent of that iPhone's total value.
    From his experience as both Under Secretary for 
International Trade at the Department of Commerce and chief 
international trade counsel at the Senate Finance Committee, 
Mr. Aldonas will outline what steps Congress and the 
statistical agencies should take together to improve the 
quality of U.S. international trade and investment statistics.
    Many statistical issues involve the price indices that are 
used to deflate gross service revenues into real services 
output. As a former commissioner of the Bureau of Labor 
Statistics, Dr. Hall will offer his suggestions on how to 
improve not only the quality of labor statistics but also the 
quality of price indices affecting the measurement of 
international trade and the real output of the services sector 
as well.
    U.S. statistical agencies have a proud tradition of 
reporting economic data objectively regardless of the political 
ramifications for the incumbent administration. In the Green 
Jobs Act, however, Democrat leadership in Congress inserted an 
ill-defined and ill-conceived mandate for the Bureau of Labor 
Statistics to count green jobs.
    This green jobs mandate, which I believe is a thinly 
disguised attempt to create a metric to support a policy 
agenda, reeks of politics. Something is not quite right when, 
as I understand it, green jobs include EPA bureaucrats and 
attorneys that are suing to block the construction of Keystone 
pipeline, a project that would create up to 20,000 jobs here in 
America and reduce our nation's dependence on unfriendly oil 
sources in the Middle East and Venezuela.
    Is there any economically meaningful definition of a green 
job? As the official formerly charged with executing this 
mandate, Dr. Hall, I am eager to hear your opinion.
    With that, Madam Chairwoman, I look forward to the 
testimony of today's witnesses.
    Representative Maloney. I thank the gentleman for his 
statement.
    [The prepared statement of Representative Brady appears in 
the Submissions for the Record on page 29.]
    Representative Maloney. And I want to thank all the 
panelists for being here. And I would like to introduce them.
    Mr. Kenneth Simonson is the chief economist for the 
Associated General Contractors of America. He is responsible 
for analyzing economic data and trends to advise the AGC's 
member companies about possible future effects on the 
nonresidential construction market. In addition, he is 
currently serving as vice president of the National Association 
for Business Economists. Prior to joining AGC, Mr. Simonson 
worked for 3 years as the senior economic advisor in the Office 
of Advocacy for the U.S. Small Business Administration and 
earlier as vice president and chief economist of the American 
Trucking Association. He is also cofounder of the Tax Economist 
Forum and has served on the board of the National Tax 
Association.
    Dr. Andrew Reamer is research professor at George 
Washington University Institute of Public Policy. He focuses on 
policies that promote U.S. competitiveness, including economic 
statistics. He was previously a fellow at the Brookings 
Institute Metropolitan Policy Program and deputy director of 
its Urban Markets Initiative. He founded the Federal Data 
Project, which sought to improve the availability and 
accessibility of Federal socio and economic data for States, 
metropolitan areas, and cities. He also co-authored the policy 
brief that served as the basis for the Regional Innovation 
Program authorized by Congress in 2010. He currently is a 
nonresident senior fellow at Brookings.
    The Honorable Keith Hall--and it is very good to see him 
again; I have sat through many presentations from Dr. Hall--he 
is a senior research fellow now at the George Mason University. 
He was previously the commissioner of labor statistics for the 
U.S. Department of Labor and was a frequent witness before this 
committee. Dr. Hall also served as chief economist for the 
White House Council of Economic Advisors for 2 years under 
President George W. Bush. Prior to that, he was chief economist 
for the U.S. Department of Commerce. Dr. Hall also spent 10 
years at the U.S. International Trade Commission.
    And the Honorable Grant Aldonas is the principal managing 
director of Split Rock International, a Washington-based 
consulting and investment advisory firm that he founded in 
2006. He also serves as a senior advisor in international 
relations at the Center for Strategic and International 
Studies, a bipartisan nonprofit organization that conducts 
research and analysis and develops policy initiatives. Before 
founding Split Rock, Dr. Aldonas worked for the government, 
serving as the U.S. Under Secretary of Commerce for 
International Trade and as the chief international trade 
counsel for the Senate Finance Committee.
    I welcome all of the panelists. And I look forward to the 
testimony, starting with Mr. Simonson.

    STATEMENT OF MR. KENNETH D. SIMONSON, CHIEF ECONOMIST, 
  ASSOCIATED GENERAL CONTRACTORS OF AMERICA, VICE PRESIDENT, 
  NATIONAL ASSOCIATION FOR BUSINESS ECONOMICS, WASHINGTON, DC

    Mr. Simonson. Thank you very much, Madam Chair and Vice 
Chair Brady. I commend you for holding this hearing on a very 
important topic that is not very glamorous but affects all of 
our lives and businesses.
    I am Ken Simonson. I am the chief economist for the 
Associated General Contractors of America, the leading 
construction trade association. And our members perform every 
kind of construction other than single-family-home building. So 
they are intensely interested in the state of local and 
national economic conditions, demand from different sectors for 
different types of construction.
    I am going to be testifying today principally in my other 
role as vice president of the National Association for Business 
Economics. That is a 2,500-member professional organization not 
just for people with ``economist'' in their title or their 
degree but anyone who is using economic information in the 
workplace. And I would like to illustrate the breadth of users 
of the American Community Survey and the Economic Census and 
speak a little bit about the effect that has already occurred 
from cuts in other census programs.
    I also serve as a member of the Data Users Advisory 
Committee for the Bureau of Labor Statistics and have seen many 
presentations and discussions, sometimes quite vigorous, over 
what is the proper role of the statistical agencies, how can 
they best use their resources in order to achieve timely, 
useful information without undue cost or intrusiveness.
    And I think that the Census Bureau is achieving those goals 
in large part in the way that it conducts the American 
Community Survey. As you know, that replaced the long form on 
the census, which asked many of the same questions but only 
once a decade to a much larger number of people. And by having 
a continuous, small but scientifically chosen random sample--
and those words do go together; they are not in conflict--the 
American Community Survey does deliver very timely information 
that is used by an extremely wide variety of users.
    In the case of my association, for instance, we use 
information from both the ACS and the Economic Census, either 
directly or filtered through other government statistical 
products, to identify the role of construction in each State's 
economy and the impact that a billion dollars invested in 
nonresidential construction would have in terms of generating 
construction jobs, indirect jobs from supplier industries, such 
as mining, manufacturing, and a variety of services, and then 
induce jobs throughout the economy as the workers and the 
owners in the construction and supplying businesses spend their 
additional wages and profits. Other trade associations use 
these two data products in a variety of ways to track the role 
that their industries are playing in the economy.
    The ACS is also used by many of the 5,000 economic 
development agencies and organizations throughout the U.S. to 
answer inquiries from businesses that are considering locating 
here versus other parts of the world. For instance, Patrick 
Jankowski of the Greater Houston Partnership testified to 
Congress in March that Japanese companies looking to open a 
plant in the Houston area want to know the size of the Asian 
community, in order to have assurance that expatriate workers 
that they assign to Houston will be comfortable there. When a 
European company wants to open a research and development 
facility in Houston, they ask about the number of engineers and 
scientists that live in the region.
    I don't think there is any other data source that could get 
into that kind of detail and timeliness to help make that sale. 
And they have repeatedly made that sale, not just in the 
Houston area but throughout communities across America.
    The National Association for Business Economics had a 
conference just 2 weeks ago on the comeback of manufacturing in 
Cleveland, which is seeing a big revival of manufacturing. And 
having the information that we get from the ACS on a continuous 
basis and what we could garner from an Economic Census if it is 
conducted and processed and reported timely in the next 2 years 
will help that process.
    Consultants also use the ACS for a variety of purposes. I 
heard from John Knox, an independent socioeconomic research 
consultant in Hawaii, about looking at ways of evaluating the 
success of science research programs in recruiting students or 
other personnel from under-represented minority groups in 
Hawaii. And other researchers and institutes around the country 
likewise use that kind of socio-demographic information for 
their own communities and for identifying the most effective 
ways to put in place programs of assistance.
    The associations also produce snapshots of their local 
housing markets. The National Association of Home Builders, for 
instance, does that for hundreds of housing markets around the 
country. And the use of the American Community Survey provides 
really the only source of data that can be used to provide 
housing and demographic data for individual congressional 
districts, as NAHB and other associations, other NABE members 
pointed out to me.
    In addition to these products, the Census Bureau has had to 
discontinue a couple of other valuable series. In the case of 
my industry, the Survey of Residential Alterations and Repairs 
was something that contributed to a measure of how much 
construction activity is happening at any one time. In fact, 
the best guess the Census can make now is that residential 
improvements, as they call it, has been the biggest piece of 
residential construction and bigger than any single 
nonresidential segment for several years.
    Representative Maloney. If you could please sum up. You are 
already over your 5-minute limit, and we can read it in the 
record. But if you could sum up now quickly.
    Mr. Simonson. Yes, absolutely.
    I believe that the ACS and the Economic Census are 
indispensable and there is no adequate replacement for them in 
the private sector or by making them voluntary.
    Representative Maloney. Thank you.
    [The prepared statement of Mr. Kenneth D. Simonson appears 
in the Submissions for the Record on page 31.]
    Representative Maloney. Dr. Reamer.

  STATEMENT OF DR. ANDREW REAMER, RESEARCH PROFESSOR, GEORGE 
 WASHINGTON UNIVERSITY INSTITUTE OF PUBLIC POLICY, WASHINGTON, 
                               DC

    Dr. Reamer. Congresswoman Maloney, Vice Chairman Brady, and 
members of the committee, I appreciate the opportunity to speak 
to you today about the economic impacts of insufficient funding 
for Federal economic statistics, including the American 
Community Survey and the 2012 Economic Census.
    By way of background, in the first 20 years of my 
professional career I founded and managed two regional economic 
development consulting organizations. We worked with public- 
and private-sector leaders in cities and States across the 
U.S., including the States represented by most members of this 
committee, to help them understand their region's economic 
competitiveness, its strengths and weaknesses, and develop 
collaborative strategies to boost their area's competitive 
position. It was clear from that work over 2 decades that 
current accurate statistics are critical to economic 
development and job creation, because you need to understand 
what economic performance is, what economic structure is, and 
what the economic resources are that drive that performance and 
make that structure competitive.
    From my experience, I know that the Federal Government is 
essentially an irreplaceable provider of such statistics. I 
will tell you why, very briefly.
    A month ago, I hosted a 2-day data fair at the George 
Washington University called Innovative Data Sources for 
Regional Economic Analysis. We had 50 exhibitors from the 
Federal sector, the private sector, such as Google, Amazon, 
Microsoft, S&P, Moody's, and academia and nonprofits like 
Brookings--50 exhibitors, over 200 participants. Given the 
incredible recent expansion of information technology capacity 
and advances in statistical methodologies, the idea was to have 
people get acquainted with the different new types of data sets 
that are available, make connections across sectors, and start 
a conversation about what the proper allocation of roles are 
between the Federal Government and the private sector regarding 
economic statistics.
    As one result, people were very happy with the fair and a 
number of collaborative efforts developed between Federal 
agencies and some of the private organizations that I mentioned 
to pursue projects in common.
    In conversations with the non-Federal organizations, they 
readily admit that they could not and do not want to collect 
the data that the Federal Government does. Rather, they see 
opportunities to add value to Federal data, sell their unique 
data to the Federal Government, integrate--and that is actually 
happening now--and enhance access to Federal data through Web-
based data platforms.
    The Federal Government has an essential role to play in the 
production of statistics that lead to better decisions 
regarding the economy and competitiveness because data are a 
classic, what economists call, public good; that they are under 
produced because they are freely available and it is often the 
case that the private sector cannot get the full price that the 
societal benefits of data access would suggest.
    As full data are necessary for the efficient operation of 
markets, so the Federal Government has a role in addressing 
information market failure. Only the Federal Government has the 
financial resources, the authority, and the motivation to 
produce data that are objective, reliable, and relevant to 
policy needs consistent over space and time and freely 
available to multiple users. And they are critical for helping 
the public hold their political elected officials accountable.
    The total cost of the economic statistics budget is less 
than $2 billion a year to cover a $14 trillion economy--the 
cost of about four F-22 jets. And so the Federal statistical 
system is a very effective, adaptable mechanism for addressing 
information market failure at low cost and with economic and 
fiscal returns orders of magnitude greater than taxpayer 
investment. The private sector does not have the capability to 
produce data of similar reliability and usefulness.
    Vice Chair Brady, I am pleased to hear your interest in the 
broader array of economic statistics. In my testimony, there 
are two stories about unreliable GDP data and unreliable 
current employment statistics data at the State level because 
of the unwillingness of Congress to provide 8 million bucks to 
the Census Bureau to capture regular data on the services 
industries regarding GDP and the flat-lining of Federal Monies 
going to State partners in labor market information, resulting 
in the diminution of skills at the State level and causing 
problems with the current employment statistics system of the 
like that we just saw in the Wisconsin recall election. You 
might be familiar with the difference of opinion between 
Wisconsin Republicans and Democrats regarding that state's 
economic performance in 2011.
    With regard to the American Community Survey, each of you 
has a packet that I put together with data on your district 
from the American Community Survey. As Congresswoman Maloney 
said, the notion of collecting data beyond bare enumeration has 
been with us since James Madison, the father of the 
Constitution, proposed it in the first Congress, Thomas 
Jefferson for the second census, and then Presidents and 
Congresses from there on. President Grant complained about 1870 
census data being out of date by 1875.
    More than a century later, the American Community Survey 
came into being to provide annually updated data as proposed by 
President Bush. ACS data, and the long-form data before them, 
are essential ingredients for the functioning of the public and 
the private sectors in the U.S. economy. They are the building 
blocks for Federal statistical and population estimates, the 
boundaries of metropolitan areas, State and local per capita 
income. They are the building blocks for State restraints on 
taxes and spending. Half the States have restraints on tax and 
spending that are based on data from the ACS. They are 
essential for----
    Representative Maloney. Will the gentleman sum up? He is 2 
minutes over.
    Dr. Reamer. Sure. They are essential for legislative 
redistricting and business decision-making. Medicaid 
reimbursement, quarter of a trillion dollars a year, is 
dependent on the ACS.
    A voluntary ACS is not viable, it won't produce reliable 
data. There are ways to address the issues raised by the House 
without making the ACS voluntary; I would be pleased to talk 
about them.
    Regarding the Economic Census, I would echo Congresswoman 
Maloney's point that it is essential for developing accurate 
quarterly and annual economic statistics for the Nation and the 
States. And without the 2012 Economic Census, we would be in 
the dark about the true state of our economy until the 
beginning of the next decade.
    Representative Maloney. Thank you.
    [The prepared statement of Dr. Andrew Reamer appears in the 
Submissions for the Record on page 38.]
    Representative Maloney. Dr. Hall.

   STATEMENT OF THE HON. KEITH HALL, SENIOR RESEARCH FELLOW, 
MERCATUS CENTER, GEORGE MASON UNIVERSITY, FORMER COMMISSIONER, 
           BUREAU OF LABOR STATISTICS, ARLINGTON, VA

    Dr. Hall. Congresswoman Maloney, Vice Chairman Brady, and 
members of the committee, thank you for the chance to discuss 
the economic statistics produced by the Federal statistical 
system. In my testimony, I will talk briefly about some of the 
challenges that the current system is struggling to meet and 
then mention a handful of specific inadequacies in data 
coverage.
    Federal economic statistics are important for both 
policymakers and the public. The reason is simple: Good 
information allows good decisions. Relevant, accurate, and 
credible economic data plays much the same infrastructure role 
for the economy as physical infrastructure like a highway 
system.
    The challenges facing Federal statistical agencies are 
significant and many. Like physical infrastructure, statistical 
systems become obsolete over time as the nature and scope of 
economic activities by businesses and households are becoming 
increasingly complex. While this is a great challenge, 
especially in times of tight budgets, it is also a great 
opportunity. Federal statistical agencies need to recognize 
this opportunity and take advantage of the changes brought 
about by technology. This can not only lead to improved 
economic data but a significant reduction in the burdens that 
they impose upon the survey respondents.
    First, agencies need to modernize their data collection to 
better reflect how households and businesses store and use 
information. This is, to a large degree, simply taking 
advantage of data that is already collected. This can be done 
in a number of ways. They need to continue to find and use 
existing administrative records whenever possible. For example, 
the Current Employment Statistics program at the Bureau of 
Labor Statistics takes advantage of unemployment insurance 
records that companies are required to maintain.
    Agencies also need to find more ways to use existing 
electronic records already kept by private companies. For 
example, the Consumer Price Index Program is researching the 
use of electronic price information held by corporations. This 
could potentially replace the use of data collectors that still 
today walk into a store, pick up an item for sale, and write 
down its price.
    Agencies need to make a serious effort to match businesses 
across different data surveys so that survey responses can be 
shared. This could significantly reduce redundancy in surveys.
    Agencies need to coordinate the data collection from large 
corporations. Just two-tenths of 1 percent of firms employ 40 
percent of the private-sector workers in the United States. 
Agencies could get together, identify a core set of measurable 
objectives, and negotiate with a relatively small number of 
firms to get data into a single survey. And agencies could 
begin to replace personal visits to both companies and 
households with online interviews so we reduce the agency 
travel costs.
    Second, agencies need to improve their use of technology by 
sharing computer information systems. Large statistical 
agencies have a number of independent statistical programs, 
each with its own budget and each with its own independent IT 
system, for data collection and processing. This creates a 
significant amount of redundancy and raises their overhead 
costs. Similar redundancy exists between smaller agencies that 
each have their own information system and do not share a 
common IT platform with each other.
    And third, statistical agencies need to modernize the data 
dissemination. Often, agencies don't seem to realize that the 
data they collect and analyze belongs to the taxpayers that 
footed the bill. They need to make sure that their information 
is available to everyone and that that information is in an 
understandable and usable form. In general, they need to 
improve their Web sites and pool data with other agencies at 
online data warehouses. Agencies also need to encourage and 
coordinate more with the private sector in the creation of 
tools like Google's Public Data Explorer.
    In addition to the challenges faced by most statistical 
agencies, there remain a great many inadequacies in the 
coverage and quality of statistical data. I discussed a few in 
my written testimony, and I will mention just two here.
    First, there is a significant gap in the level of detail 
available in data-owning services. For decades, the statistical 
system focused primarily on goods, yet the service sector is 
now responsible for over 80 percent of total U.S. employment 
and for the past several decades 100 percent of job growth. And 
for the first time ever, more than half of the job loss in the 
recession, in the great recession, was in services.
    Lastly, I want to mention difficulties with the 
unemployment rate. The unemployment rate primarily serves as a 
measure of labor market slack--that is, it should indicate how 
much current employment falls short of the supply of labor. 
However, the U.S., like most other countries, has a very narrow 
definition of the unemployed. Only those completely without 
work and actively seeking employment are counted. It is often 
the case during recessions that many of the jobless become 
discouraged and don't actively look for work. Because of this 
inactivity, they are not considered unemployed, and the 
accuracy of the unemployment rate as a measure of labor market 
slack declines.
    The problem with the unemployment rate has never been worse 
than it is now. To give you some idea of the problem, a simple 
calculation can be done. If we had 63 percent of the population 
in the labor force, as before the recession, and all those 
people were counted as part of the labor supply, there would be 
an additional 5 million people counted as unemployed. This 
would raise the unemployment rate a full 3 percentage points to 
about 11.3 percent, and that would be the highest unemployment 
rate ever recorded by the Bureau of Labor Statistics.
    Thank you.
    Representative Maloney. Thank you. That is startling. Thank 
you.
    [The prepared statement of Hon. Keith Hall appears in the 
Submissions for the Record on page 52.]
    Representative Maloney. Mr. Aldonas.

  STATEMENT OF THE HON. GRANT D. ALDONAS, PRINCIPAL MANAGING 
       DIRECTOR, SPLIT ROCK INTERNATIONAL, WASHINGTON, DC

    Mr. Aldonas. Thank you, Congresswoman Maloney and thank 
you, Vice Chairman Brady. I would ask that my full statement be 
entered into the record. I will summarize it here.
    My mother always said to me when I was a kid that the 
surest way to get the wrong answer was to ask the wrong 
question. And what I feel we have been doing is asking the 
wrong question.
    Both when I was on the Finance Committee as the chief 
international trade counsel and when I was Under Secretary of 
Commerce, what I realized was, although I depended on a lot of 
the great work that Keith did in the Bureau of Economic 
Analysis, that in the part of the world that we were 
responsible for in terms of trade statistics, we had learned 
how to calculate the static effect of a tariff change to four 
or five decimal points in a world where the pace of economic 
change was accelerating and the dynamics were what mattered. In 
other words, we had perfected the technique right when it was 
no longer needed.
    The reality is, in the world of international trade we live 
in today, time to market is far more important than the static 
effect of tariff changes, but it is not something we measure. 
And to give you a sense of what that implies is that, while we 
are discussing the two surveys, even accepting what the other 
witnesses have said, it pales by comparison to the idea that we 
are undercounting our services exports by 30 percent. It would 
offer a totally different perspective about trade policy, 
international income accounts, in terms of what drives job 
creation, if we had that information.
    If you looked hard at how we create value in this country 
and how value is created in the global economy, it would 
fundamentally alter the way you thought about our tax code, the 
question of tax reform, what we would do in terms of trying to 
encourage job creation, and create the right kind of 
environment at this point. None of those questions are actually 
answered or addressed by the surveys that we have in hand. But 
they are far larger in terms of their actual implications for 
whether Americans can create their own economic future than 
anything in the existing surveys at this point.
    What I really would like to focus on is what we should 
measure. And here I just want to come back to the chairwoman's 
fundamental question. There are two great values in American 
society. One is individual liberty; the other is equality of 
opportunity. The sad reality is that we don't have a measure of 
either. If, in fact, you are serious about what you want to do, 
then I think this is the time to use the opportunity that the 
House bill has created to have a serious discussion about how 
we do measure individual freedom and how we do measure our 
progress toward equality of opportunity. What I would suggest 
is that knowing the average commuting time of a white male over 
55 in a one-ton pickup is not going to inform our judgment 
about either of those two values or our progress toward those 
great American goals.
    Turning to the specifics of the surveys, I just want to 
make couple of points, which really are, I think, fairly 
straightforward. The census does a great job, in my estimation, 
of every time they look at a survey and, every time they look 
at the census, they ask themselves hard questions. And I think 
they need to do that with you, with the committee, and with the 
Congress. You are the representatives of the people; they 
certainly are trying to carry out your will. But in doing that, 
it is time for a fundamental rethink. And I think that is true 
both because of the questions we need to answer in the economic 
challenges we face, but also because of the cost implicit in 
collecting the data and the cost imposed on individuals who 
have to respond.
    So, what I would suggest is a simple three-part test. 
First, I think both you and the Census should explore whether 
there are alternatives available that would eliminate the need 
for the surveys in whole or in part.
    Second, where there is no alternative to the government 
collecting the data, along the lines Keith was suggesting, 
explore whether government could acquire such information by 
other less costly means.
    A good example is that many of the questions in the 
personal survey in the ACS relate to your veterans disability 
benefits. The reality is the Department of Veterans Affairs has 
that information. There is no need to be asking that as a part 
of the survey. The same thing happens with the IRS. There is 
even a question that asks you your opinion about value of your 
home, rather than actually looking at prices in the market for 
which they are sold. There really is no need for that question, 
to be honest. It doesn't actually inform either economic 
policymakers, or, as I certainly can attest from my own 
experience in business, does it actually inform the judgment of 
an economic actor in the marketplace.
    The last point, I would say, is that you should ask the 
Census to reassess the reasons for asking certain information, 
with a view to limiting the cost and burden of reporting in 
those instances where there is no other alternative to a survey 
either from public or private sources.
    So my point is not to suggest that the ACS and the Economic 
Census don't provide data of considerable value. Rather, it is 
to suggest that there are certain instances where the juice 
certainly isn't worth the squeeze in terms of the information 
those surveys provide. The fact of the matter is, what we ought 
to be doing is trying to reduce the impact on the average 
American citizen in trying to cut the budget at the same time 
as we are trying to accomplish the data needs that you have to 
have as policymakers.
    Thank you.
    Representative Maloney. Thank you.
    [The prepared statement of Hon. Grant D. Aldonas appears in 
the Submissions for the Record on page 56.]
    Representative Maloney. I want to thank all the panelists 
for their statement.
    And before we begin, I would like to ask for unanimous 
consent to include Mr. Barabba's testimony in the record. Due 
to a medical emergency, he was unable to attend today's 
hearing. And also the letter from the prior census directors.
    [The prepared statement of Hon. Vincent P. Barabba appears 
in the Submissions for the Record on page 67.]
    [Letter dated October 27, 2011, to Hon. Frank Wolf appears 
in the Submissions for the Record on page 70.]
    Representative Maloney. I would first like to question 
Professor Andrew Reamer of the George Washington Institute of 
Public Policy.
    In your personal testimony, in your prepared testimony on 
page 9, I would like to quote: ``Further and quite importantly, 
the termination of the ACS would cheer our nation's economic 
competitors, including China and India, who know full well that 
without the ACS, U.S.-based businesses would be flying blind,'' 
end quote.
    Could you elaborate on this? And are you saying that if the 
Congress did end the ACS or make it voluntary, that we would be 
helping economic competitors like China and India and others?
    Dr. Reamer. Yes.
    China is in a difficult place because it has basically 
funded our deficit for the last decade, so it doesn't want us 
to do too badly because it needs to get paid back.
    U.S. businesses use the American Community Survey to site 
locations of business operations on the basis of the 
characteristics of the workforce--educational attainment, 
languages spoken, age, the type of degree somebody has--and the 
commute times, the relationship between where people live and 
where they work. Businesses that compete internationally, 
whether U.S.-based corporations or international corporations, 
and are looking to build a plant here, rely on the ACS data for 
site location and site comparison.
    So the ability of the U.S. to attract and keep businesses 
that are competitive internationally would be harmed by the 
absence of the ACS.
    Representative Maloney. And when the amendment to defund 
the ACS or make it voluntary was debated, many of my colleagues 
stated that the ACS was unconstitutional. In your opinion, is 
that correct?
    Dr. Reamer. I am not a constitutional lawyer, but it sounds 
like the Members of the House who said they are substituting 
their opinion for that of James Madison, who is known as the 
father of the Constitution.
    Representative Maloney. And Jefferson.
    Dr. Reamer. And Jefferson as the father of the Declaration 
of Independence, who both--from the get-go, you have 
Congressman Madison on the floor of the House in February of 
1790 saying, we need to go beyond bare enumeration to collect 
information that can help us understand the needs of the 
population and economic conditions and so guide public policy.
    Representative Maloney. And, also, could you respond to my 
dear friend and colleague's statement that this should be 
voluntary? What is your response, Dr. Reamer and Mr. Simonson?
    Dr. Reamer. Regarding voluntary, about 10 years ago 
Congress, I think it was actually the House, asked the Census 
Bureau to look at what the impacts on cost and data reliability 
would be if the ACS went from mandatory to voluntary, and it 
got back results. The results were updated in a memo the Census 
Bureau published last July. In that it said the response rate 
would fall by 20 percentage points, and as a result, to get the 
same level of reliability, the Census Bureau would have to 
expand the sample significantly and/or do more household 
nonresponse follow-up.
    I know one of the complaints of constituents is that they 
don't like the Census Bureau calling them and knocking on their 
door. Well, with a fall in 20 percentage points in response, 
there would be more of that. And the cost of this extra effort 
would be millions of dollars.
    If nothing is done, then the reliability of the data are 
destroyed. Essentially, they would be useless. So Congress and 
taxpayers would have spent billions of dollars over more than a 
decade on the ACS, and that data would be useless. You could no 
longer do time series. Unlike the long form, which gives 
neighborhood data for 1 year, the ACS neighborhood data is 5-
year average. If you lose a year, you can't do the averages.
    Representative Maloney. Mr. Simonson, would you like to 
comment?
    Mr. Simonson. I agree with everything Dr. Reamer said about 
that, that making it voluntary would drive up the cost, and 
even then you would not have the same quality of data. And I 
think the additional burden on those who are asked to respond 
would be greater than through the process that we have now.
    Representative Maloney. Okay. Thank you.
    Mr. Brady.
    Representative Brady. Good points.
    I think the American Community Survey is important. I think 
it can be even more accurate. And with a little work, we could 
remove the objections of compulsory compliance as we do with 
the Current Population Survey, designed where it receives 
almost a 93 percent response rate. It is accurate. We use it to 
rely upon both national and State and from data and the 
information, as well as critical data for our 12 largest 
metropolitan areas--all done voluntarily.
    So I think, thank goodness the Census Bureau wasn't 
listening to this advice we hear today, because they actually 
came together, working with Congress and together, to develop a 
survey that works for everybody.
    I want to follow up a point. Dr. Hall made a great point. 
Good information creates good decisions. And Mr. Aldonas 
followed up with that, as well.
    My frustration has been that, in this ever-changing world, 
as hard as they have tried, we have not been able to stay up to 
date in the data of this world. My frustration--and Dr. Hall 
has heard me say before, it is frustrating that we can follow a 
job created at the local pub but not one created through 
international trade, which is a huge part of our economy. And 
Mr. Aldonas has heard me whine that we continue, policymakers 
continue to get information on whoever shipped the last product 
to us rather than the global supply chain that created that 
product, which may have started in a small town in Iowa, you 
know, moved through several countries, only added value at the 
last stop, and will come back with 80 percent of U.S. content. 
U.S. lawmakers and policymakers are in the dark about that.
    So I want to follow up with that point. You made the point, 
30 percent of our services sector is consistently undercounted. 
Yet the exports from China--the current trade statistics 
overestimate the value of manufactured goods from China. You 
have made the point that the current trade statistics don't 
capture the shift to date, the global supply chain and the 
growing share of trade in your immediate goods.
    And so I guess my point to you, a broader one, is it looks 
like we have a lot of work to remedy the outdated and flawed 
assumptions at the core of some of our economic data. What 
approach would you take in order to correct these assumptions? 
What approach would you recommend we take to work with these 
agencies to come up with the data that actually inform, as Dr. 
Hall has said, good decisions?
    Mr. Aldonas. Thank you very much for the question.
    One thing I would like to pick up from what Keith said is 
that there is a wealth of information that companies do provide 
to you--tax returns, security filings, and a variety of 
databases that can be used to develop some of the information 
asked for in the survey. But the other thing is to actually 
look harder at how you measure transaction costs, which we 
don't do well. We don't actually do a very good job of 
measuring the information barriers that prevent a small 
business from trying to find a buyer, whether that buyer is a 
company in the United States that is going to pull them through 
into global markets or whether it is through an export sale at 
arm's length. So trying to get a better grasp on what the real 
barriers are from the perspective of trade would be the most 
important thing to start out with.
    Second, I am surprised by the comments from some of the 
other folks on the panel, Vice Chairman Brady, about how 
businesses make decisions. I have to say, honestly, I would 
prefer to see that there was more information available about 
the things that actually drive business decisions. Those things 
are generally price and what the local market is. But, I have 
advised investors over a lifetime, and the reality is I have 
never used the ACS, to be honest with you, to advise an 
investor. I have never had an investor actually use the ACS to 
determine whether they were going to make an investment. What 
that says to me is that we are not actually feeding decisions 
of the economic actors in the market place.
    On the international side, if I said we needed to know more 
about a market, my interest would be to say, what are the 
points of access into that market? That means trying to find 
out from American companies what their approach is in terms of 
their sales. Is it a sale to, at arm's length? Or is it a sale 
through--as my great friend Jim Zawacki in Grand Rapids said, 
he would never export to Japan; he exports to a country called 
Toyota Land. If that is the route, we need to know more about 
the barriers to reaching the market through Toyota, not simply 
counting the stuff that is crossing the border when it comes to 
customs.
    Representative Brady. Good. Thank you.
    And, Dr. Hall, would you comment broadly, advice to us to 
try to more accurately capture the global supply chain in the 
economic activity?
    Dr. Hall. Well, sure. One of the big challenges on services 
in general--certainly it is with trade--is pricing, trying to 
price services. And services has particular problems with 
pricing, the BLS has particular challenges with it. There has 
been some progress, but there is still a lot of progress that 
needs to be done.
    I can tell you, for example, that import prices that are 
collected by the Bureau of Labor Statistics, the BLS, in fact, 
has had reductions in budgets, so in fact the coverage of 
services has now actually declined over the last number of 
years, and a lot of detail in that has been lost. I think that 
is significant. Just pricing even domestically for services I 
think is a real challenge.
    Let me point out another thing, too. This focus on 
services, it is sort of an unrelated issue, but we are all used 
to thinking about trade deficits. The U.S. has a trade deficit. 
In services, the U.S. has a surplus and has had a surplus for 
years. The U.S. is widely recognized as having a comparative 
advantage in services. And services remain the most protected 
worldwide--goods and services--that is where all the future 
trade globalization comes, is in services, not in goods.
    Representative Brady. Thank you, sir.
    Madam Chairman.
    Representative Maloney. And, Dr. Burgess, nice to see you 
again.
    Representative Burgess. I want to thank our witnesses for 
being here.
    I just have to share with you, I was home in my district 
last week doing town-halls. Had my obligatory meeting with my 
county medical society. Of course, you might imagine what they 
were all exercised about. But one fellow came up to me, stuck 
the American Community Survey under my nose, and said, how dare 
you require this type of information from me under penalty of, 
I guess, fine. Is that right? Somebody gets fined if they don't 
do this? Do we know what the fine is for not filling this thing 
out? I am told by staff it is $5,000.
    Dr. Reamer. Yes, up to $5,000. And it has not been enforced 
for half a century. I mean, it has not been--there has not been 
a case brought to court in half a century.
    Mr. Aldonas. Although a misstatement of information on that 
form is a Federal felony.
    Representative Burgess. And a $10,000 fine.
    Mr. Aldonas. Yes.
    Representative Burgess. So that is a pretty hefty load for 
someone to carry. And yet you look at the information, I could 
see why this doctor was upset. I mean, there is a lot of 
personal information. You get name, you got address, you got 
age, you got birth date, all the family members' or household 
members' names, ages, and birth dates, telephone number. I 
mean, a passably good identity thief would be able to construct 
a fairly good alter ego of this person just with the 
information that is being disclosed on the government form.
    So, I mean, people are nervous about drones looking in 
their backyard on their cattle herd. I can well understand why 
someone is concerned about--at the point of government 
intrusion, having to give up this information.
    So I share with Mr. Brady the observation that there may 
well be a way to get this information, the information may be 
important. But, certainly, the way we are going about it has 
got people rocked back on their heels, and they are resisting.
    Look, we have an approval rating of 8 percent in the United 
States Congress. No one trusts us to do anything anyway. Why 
are they going to trust us with this type of information? And 
the whole concept of mistrust of government is something that 
has been obviously generated over some time, but this doesn't 
help.
    Dr. Hall, we just had a big hearing in our Oversight 
Investigations Subcommittee on Energy and Commerce this 
morning, all morning long, on green jobs. Can you tell us what 
a green job is?
    Dr. Hall. Sure. I can tell you what the Bureau of Labor 
Statistics did in defining a green job.
    One of the things that BLS encountered is that there are 
lots and lots of definitions of green jobs, and there is not 
very much agreement as to what should be green and what should 
not be green. But the approach that was taken in the Green 
Goods and Services survey, which identifies output that is 
green and counts the number of jobs that are associated with 
it--let me just say, most occupations in those industries are 
normal occupations. You know, there is nothing special about 
them. Somebody who works pouring concrete in a windmill and 
somebody who works pouring concrete in a foundation, that is 
the same sort of job. There is nothing special about green jobs 
in that way.
    My concern a little bit with green jobs comes with putting 
my economist hat on. When BLS designed this program, the 
biggest reservation I had personally, as an economist, was how 
this data was going to be used. I don't think the data should 
be used as a count of green jobs. It doesn't really mean much 
to come up with a definition of green jobs and just count it.
    In fact, I have problems with the idea that regulation 
might be viewed as a jobs program. What is important about 
green is the output, not the jobs. It is somewhat ridiculous to 
view it as a jobs program. And if it is worth doing, if green 
regulation is worth doing, it is because of the output, you are 
getting an output that is valuable, not because it is a hiring 
program.
    Representative Burgess. If I could just stop you there, we 
heard testimony this morning from an economist named Dr. Green, 
ironically, that the tradeoff for green jobs in various 
economies looked at across the world--in Italy, two jobs were 
given up, two regular jobs were given up for every green job 
created--no, I beg your pardon, that was Spain. Italy, it was 
seven jobs lost for every green job created. In England, I 
think it was 3\1/2\. So there is actually a toll on jobs by 
taking the money from the private sector and putting it into 
these activities.
    I mean, you ended up your testimony--I got to admit, you 
woke me up. You said unemployment is never worse than it is 
now, but if it were accurately reported it would be 3 
percentage points higher? Is that what you said?
    Dr. Hall. If we had a better measure of labor supply, I 
think it would probably be up in that range, yes.
    Representative Burgess. I mean, that is pretty startling 
information. So, part of our activity is killing the very 
activity that we want to enhance. It makes no sense to continue 
doing it.
    Dr. Hall. Well, that is true. And you have touched upon my 
other problem with counting green jobs, is that it is only 
counting half the story.
    Representative Maloney. The gentleman's time has expired.
    Mr. Mulvaney.
    Representative Mulvaney. Thank you, Madam Chair.
    I want to explore two different things, things that have 
been touched on by the previous Members, but I want to explore 
it a little bit. Because the questions that I wanted to start 
with have already been asked, which is, why isn't it voluntary?
    I don't think anybody is making the argument here today 
that this is part of our constitutional obligation. The 
American Community Survey goes beyond what is required of 
Congress in Article I, section 2.3, where we have to count 
everybody for purposes of doing representative government. So I 
think everybody recognizes the fact that this is not part of 
our constitutional obligation but that we do it because it has 
a certain value.
    And I think, Dr. Reamer, it was you who said that the 
reason it can't be voluntary is that the response rate would 
drop 20 percent and that the quality of the data might go down, 
the cost would go up. And I think that was the result of a 
congressional inquiry or a congressional study. So, really, 
what we have it boiled down to is it is not voluntary because 
it would be more expensive if it were voluntary. Is that fair? 
And the data might not be as helpful.
    And I am just wondering, gentlemen, if you are aware of the 
ramifications of taking that particular position. And once you 
start to say, look, we want to make the American people do 
something because it will be cheaper for us to run the 
government if we make them do something, then tell me how we 
are supposed to run the government and have a society like we 
have had for the last couple years, or last couple centuries? I 
mean, it would be cheaper for Medicare if we made everybody 
exercise. It would. It would be cheaper to do national defense 
if we made everybody serve in the Army or the Navy. It might be 
cheaper for law enforcement if we made everybody register their 
guns and their bullets. But we don't do that.
    So tell me, Dr. Reamer, why is data so much more important 
than health? And why is it a felony to lie on this report but 
not a felony to eat a Big Mac?
    Dr. Reamer. Let's see. So, several things. One is that the 
mandatory nature of the American Community Survey you can 
directly trace back to the mandatory nature of the census since 
1790. Congressman Webster's soundbite regarding his pleasure at 
the House vote was that it saved the country $2.4 billion over 
10 years. So Mr. Webster was making the case that it was about 
saving money. He didn't really talk about the uses of the ACS. 
I am glad that you are. It----
    Representative Mulvaney. Well, we will get to that in a 
second, but I was trying to explore that part of it first.
    Dr. Reamer. Sure, sure.
    It is certainly up to Congress to make a decision--it is 
Congress that passed the law and has kept the law for 2 
centuries about the mandatory response. Congress can change the 
law and make it voluntary and be prepared to spend the extra 
money.
    The amount of money involved in economic statistics is so 
teeny, it is dust on the Federal budget. So we are not talking 
much money here. But Congress is very reluctant to spend, you 
know, seven figures for data and is willing to tolerate waste 
in many, many other areas. So----
    Representative Mulvaney. But you are making the argument it 
is actually cheaper to leave it voluntary. And I am just trying 
to----
    Dr. Reamer. No. No. It is not cheaper----
    Representative Mulvaney. Excuse me, that it is cheaper to 
leave it as mandatory.
    Dr. Reamer. The point is that the amount of money involved 
is so teeny that we are talking nickels here at a Federal 
level. So it is up to Congress, if it wants to make the survey 
voluntary and spend the extra hundred million bucks a year, to 
design a survey that has the same reliability.
    Now, I will take issue with the vice chairman's point that 
because the CPS is voluntary we can make the ACS voluntary. The 
CPS sample is what, 60,000 households? The American Community 
Survey sample is 3.5 million a year, okay? Sixty thousand 
versus 3 million. You can have a lot of leeway with a survey 
where you are asking 60,000 households around a nation of 314 
million people to get data for the Nation and for some big 
States.
    The purpose of the ACS is to produce data at the 
neighborhood level. And, therefore, to get decent information 
on the characteristics of the constituents of your district, of 
your district, you need a large enough sample and reliable data 
to make that happen.
    Representative Mulvaney. I understand how statistics work, 
and I hope we do get a chance to do a second round. But what I 
am hearing is that you have no philosophical objection to 
voluntary participation; it is just a question of cost. But we 
will return to that in a second round.
    Dr. Reamer. Yes. So I am interested in the ends; I am very 
open to the means. I think this is an issue for oversight 
rather than appropriations, and that there are ways to reduce 
the public angst about the ACS other than making it voluntary. 
And I am happy to discuss those if you want to ask me that 
question.
    Representative Mulvaney. I can't because I am out of time.
    Dr. Reamer. Okay. But somebody can.
    Representative Maloney. Thank you for your testimony.
    And, Dr. Hall, if the ACS and the Economic Census were not 
funded, would or could the private sector step in to fill the 
void? What is your opinion?
    Dr. Hall. Yes, I think the private sector would have a 
difficult time stepping in to fill the void. That is true.
    Representative Maloney. And would the private sector 
provide information uniformly across the country, including the 
rural area of the country? Would businesses and policymakers be 
able to compare the information in different geographic areas?
    Dr. Hall. No, it is certainly true, that is a real value of 
government statistics, is that you know the government has no 
agenda----
    Representative Maloney. Uh-huh.
    Dr. Hall [continuing]. And you know that there is a 
standard of quality in the government data.
    Representative Maloney. I would like to ask all the panel 
members two questions, with a yes-or-no answer.
    Do you think that Congress eliminating the ACS is a good 
idea?
    Mr. Simonson. No.
    Dr. Reamer. No.
    Dr. Hall. No.
    Mr. Aldonas. Yes and no.
    Representative Maloney. Okay.
    And the second question is, do you believe that the 
Economic Census should be funded? Yes or no.
    Mr. Simonson. Yes.
    Dr. Reamer. Yes.
    Dr. Hall. Yes.
    Mr. Aldonas. Up to a point.
    Representative Maloney. And what happens--I would like to 
ask Dr. Hall, but if anybody else would like to comment, fine--
what happens when we eliminate a statistical program? If a 
program is eliminated, can we make up the lost months and years 
of data? Or are the investments we have already made in these 
programs made useless?
    Dr. Hall. Yes, destruction of data is a real problem 
because a lot of the use of data is not just seeing a data 
point but seeing how it has changed over time.
    Representative Maloney. And we are still in the middle of a 
debate on health care. And do you believe that the data that we 
have at this moment gives the accurate assessment of the number 
of un- and under-insured?
    Again, Dr. Hall, since you have worked in this area for so 
many years, and then anyone else who would like to comment.
    Dr. Hall. Well, I believe probably the most complete data 
is through government provision of health insurance. And that 
is collected, actually, at the Bureau of Labor Statistics.
    Representative Maloney. And how does the data collection 
collected by the ACS help medical research?
    Mr. Simonson or Dr. Reamer.
    Dr. Reamer. Help medical research, let me think about that 
one.
    Well, it certainly, back to the issue--so I will think 
about that as I am talking--back to the issue of health 
insurance, the CPS--again, those data are very high levels of 
geography. And the value of the ACS is that we can tell how 
many people in each of your districts do not have health 
insurance and what kind of health insurance they have if they 
do. So that, I think, is, again, very valuable to understand at 
a very small geographic level how people are doing in terms of 
health insurance coverage.
    On the question about medical research, there is a question 
on the ACS that has been there since 1850 in various forms 
about disability. And so there are, I guess, opportunities for 
clinical trials--I am making this up because I have no idea if 
medical researchers do this. But different populations, there 
are certain concentrations of certain kinds of medical problems 
in certain locations. And they may be looking for a community 
that has a certain kind of problem.
    Representative Maloney. And how does the information 
collected by the Economic Census affect statistics on how the 
economy is faring? And will we have accurate statistics on 
output if we can't benchmark the economy every 5 years?
    Mr. Simonson. No. I think that we have seen many examples 
of rapid shifts in the economy that the statistical agencies 
haven't been able to keep up with because there is isn't a 
benchmark survey. Ideally, we would want the level of detail 
that is gathered from the Economic Census more frequently than 
every 5 years. And it would be a big blow to have that go away 
for a 10-year period or until 2020 or beyond. So I think that 
is essential.
    In terms of whether the government should do this and 
should it be mandatory, personally I find it much more 
intrusive to have private surveyors calling me up every week, 
it seems, and putting emails in front of me asking for 
information several times a day than a government survey which 
I know is going out to a fair distribution of the population 
and will be used objectively and will be made publicly 
available and not just for the benefit of some client of the 
callers taking up my time.
    So, like jury duty, I think it is an obligation of being a 
citizen in a democracy or being a business that operates under 
a system that provides a lot of liberty and protection of 
property to give something back in this nature.
    Representative Maloney. Thank you very much.
    Mr. Brady.
    Representative Brady. Two quick points. And I know a lot of 
constitutional history has been cited today, but just fact-
check: American Community Survey began in 2005. Unless Thomas 
Jefferson figured out a way to text us some real key messages, 
this is not a constitutional issue. It is about how best to 
actually survey and acquire accurate, timely, reliable data in 
a way that the public supports.
    I think the vote on the House floor did exactly what I 
think it intended to do, which is jump-start a long-overdue 
discussion about how we modernize the data so that lawmakers 
can make better, not just--both private enterprise and 
government lawmakers and legislative lawmakers have the ability 
to get the most reliable, accurate data. And I think that is 
what, frankly, this hearing has been helpful in discussing.
    Dr. Hall, from your perspective, what is the most 
economically significant gap in Federal statistical data? In 
other words, without having adequate information in a specific 
area, obviously decision-making suffers. What would that area 
be, in your view?
    Dr. Hall. Yes, there are a number of gaps. I still think it 
is probably our lack of detail in services.
    Representative Brady. On services. Because that is what, 80 
percent of our economy, 80 percent of most of the jobs in our 
congressional districts, average salary these days of almost 
$60,000 a worker, so these are key. And we are very good at it, 
when compared to the rest of the world. And your point, that 
major part of our economy we are not accurately assessing?
    Dr. Hall. Yes, it is not nearly measured nearly as well as 
the goods sector. And I think there is a real element here of--
there is an old joke about you lose your contact in the bedroom 
but you look for it in the living room because the light is 
better there. It is easier to measure goods. It is harder to 
measure services. And only in the last 10 years have we started 
to close the gap and measure services better, but we are not 
there yet.
    Representative Brady. Don't you think that is, sort of, a 
part of the helpful discussion we are having today, is to raise 
the profile of the gaps that we need to be closing in our 
economy and in our economic activity?
    Dr. Hall. Absolutely.
    Representative Brady. Mr. Aldonas, you talked a bit again 
about the global supply chain. Can you give some examples of 
how, the way the economy and business work today, where 
lawmakers miss the data as they are discussing or making key 
decisions on trade or other issues?
    Mr. Aldonas. Well, sure. And I think you alluded to the 
largest one, which really is the idea that we don't know where 
value is created and that the trade data that you see and is 
reported in our national income accounts doesn't reflect 
accurately what is being done in the global economy.
    So the best examples are a series of studies at UC-Irvine 
that looked at Apple's supply chain and where the value was 
created. What those studies reflected, if I pulled out my 
iPhone, you would see that about 65 percent of the value is 
made in the United States. Much of it is through manufacturing 
of the microprocessors, which are the brains behind everything 
that Apple does, and some of the glass finishes. But it is 
really the high end of what we manufacture and certainly what 
they do. Another large share of that remaining 35 percent is 
done variously in Southeast Asia or north Asia in Japan, 
Taiwan, Singapore, and Malaysia. And roughly 8 percent comes 
off the final assembly in China.
    And yet, our trade statistics would tell you that my entire 
phone is going to be counted as a product of China, because the 
rules of origin dictate that the point where ``a new article of 
commerce'' was created is going to be associated with the 
origin of the country. We keep trade statistics based on the 
customs rules of origin, but the customs rules of origin make 
absolutely no sense in the world we live in today.
    If you take it one step further, Vice Chairman Brady, if 
you think about where technology is created today, it doesn't 
matter whether the engineer is in the United States, or in 
India. You can't locate where that is being created. So the 
idea that somehow we are going to have a geographic measure of 
the final good and we are going to miss the more fundamental 
point--because, remember, it is the innovation and the step 
change in technology and the process improvements on the shop 
floor that flow from that that drive productivity and drive 
economic growth.
    So if you understand what I am saying, it is that we are 
not measuring how value is created, which is the most important 
thing to understand in terms of whether we are gaining 
productivity. And there is nothing about the trade statistics, 
particularly the endless debate about a trade deficit, that 
actually informs your judgment about that.
    Representative Brady. Well, I think one of the key benefits 
would be--most Members of Congress are eager to create jobs. 
Most of them would prefer it happen in their State or district. 
When you don't know where that value is being added and you 
don't have a good idea of where your companies are selling and 
exporting goods or services in a way that can connect it, we 
are not going to make good decisions on economic issues.
    Mr. Aldonas. And, frankly, even the distinction between 
manufacturing and services in jobs is something of a fiction. 
You know, we were at the high-water mark of vertical 
integration with the Rouge plant in Detroit, where you had coal 
and iron going in one end and a Model T coming out the other 
end. That has been gone since the 1930s.
    The reality is that when, for example, Motorola decides to 
turn to FedEx or UPS to handle all of their logistics, all of 
their customs processing, those jobs that used to be 
manufacturing jobs when they were in Motorola are now services 
jobs in the rest of the economy. But the reality is, Motorola 
as an enterprise became more competitive as a part of the 
process. And that is really what we need to be measuring. Did 
they gain their productivity through that? Does that make them 
more competitive globally?
    Representative Brady. Okay. Thank you.
    Representative Maloney. Mr. Mulvaney.
    Representative Mulvaney. Thank you very much.
    Gentlemen, the lady from New York asked you all a question 
a little bit ago about whether or not you thought the private 
sector would provide this if the government stopped doing it. 
And everybody, I think, said no, or at least I think Dr. Hall 
and Dr. Reamer said no.
    I know we are not famous in Congress for actually listening 
to what you are saying and asking follow-up questions, but I 
think it probably merits the follow-up question, why not?
    Dr. Reamer.
    Dr. Reamer. It depends what kinds of data you are talking 
about.
    Representative Mulvaney. I think you can anticipate why I 
am asking the question. I mean, I used to be in the private 
sector. If I wanted data, I went out to pay for it. I didn't 
actually even think to call the government up to see if they 
had the information that I had needed. I applaud the company 
that was going to move to Houston that at least knew to call to 
ask about the number of a particular minority within a certain 
area, but it never occurred to me to do that. When we built 
houses, for example, we actually paid a firm to go out and 
count the number of apartments within a certain area or 
distance from the project that we were looking at.
    Data has value to it. So what is unique about the stuff on 
the American Community Survey that you think that no one would 
want to actually get into this business?
    Dr. Reamer. Okay, so I am going to start a long answer, and 
you can cut me off at any time.
    Representative Mulvaney. I feel like I have to because you 
have 3 minutes and 42 seconds.
    Dr. Reamer. Okay.
    Representative Mulvaney. We are also not famous for asking 
short questions.
    Dr. Reamer. Yeah. So, one thing is that the private sector 
does not have the capacity to collect the breadth of data in a 
consistent way over time and space.
    Representative Mulvaney. Well, tell me how that could 
possibly be. You just hosted a symposium on new data points and 
all the wonderful new technologies that were available within 
the data-collection business. I know that Apple knows a lot 
more about me, probably, than the government does. I know that 
Facebook probably knows more about my wife than the government 
ever did.
    Tell me how it could possibly be, in this day and age, that 
the private sector doesn't have even better information about 
us than the government can glean from a survey like the 
American Community Survey?
    Dr. Reamer. The private sector collects slices of data. It 
is actually quite exciting. Mike Horrigan, at BLS, is in charge 
of all the price indices. At my data fair was a group called 
PriceStats. PriceStats scours the globe using the Web to 
collect price information on everything. I think they have a 
Big Mac index, you know, with the price of a Big Mac in any 
country of the world.
    BLS has standards of reliability and accountability that 
the private sector doesn't. At the same time, BLS recognizes 
that this new spidering technology is allowing the private 
sector to do things that the public sector can learn about. So 
the folks at BLS are talking to the folks at PriceStats about 
how to join forces. And that is a lot of what happened at the--
and so I will make one other point.
    Representative Mulvaney. Actually, I am going to cut you 
off because I do want to get to--but the reason you saw that 
look on my face is that now, in just the last couple minutes, a 
member of this panel has said that the government has much 
higher standards and deals in a higher quality than the private 
sector, which I think is absurd.
    And then earlier somebody said that the nice thing about 
having the government do this, as opposed to the private 
sector, is that the government has no agenda. I can assure you, 
gentlemen, we have an agenda. We had--I think Eric Holder was 
in front of a committee last week and was talking about a 
statement he made earlier that he was being pursued in a 
certain fashion because he was pursuing a liberal agenda while 
at the Department of Justice. I can assure you that we have 
agendas, and it would surprise me if that did not filter down 
into the data.
    You all send out 3 million of these things. Mr. Simonson 
mentioned that there are literally thousands of entities that 
use this data. I need a good answer, gentlemen, because we have 
a minute before I finish here. Tell me why the private sector 
is--I am thinking about doing this after I am out of Congress. 
If it is in such great demand, it costs us billions of dollars 
to send out 3 million of these things, I think I might be able 
to do it better than we do. Tell me why I am wrong on this.
    Mr. Simonson. Well, let me mention very quickly two 
examples.
    The Survey of Residential Alterations and Repairs was 
discontinued. Nothing has replaced it, and the quality of those 
estimates has gone down, the GDP estimates also.
    The construction spending figures for years have been built 
in part on data produced by McGraw-Hill, and there is another 
firm--Reed Construction Data also tries to get information on 
construction starts. They cover about half of what the 
government does and leave some sectors completely untouched.
    Current Industrial Reports from the Census that have been 
discontinued have not been replaced by a similar quality from 
the private sector.
    Representative Mulvaney. Thank you, gentlemen. I am out of 
time.
    Representative Maloney. Our time is up for the use of this 
room, so I would like to thank all of our panelists.
    The American Community Survey is an important annual survey 
which can help us better understand the past and be smart about 
the future. Let's make sure that policymakers have the 
information we need to do our jobs. But more importantly, 
today's panel has made it clear that businesses depend on this 
survey to plan their operations and that the loss of this 
information will put the United States at a competitive 
disadvantage.
    I would like to thank all of my colleagues for 
participating, and the panelists. This hearing is adjourned. 
Thank you.
    [Whereupon, at 3:55 p.m., the committee was adjourned.]
                       SUBMISSIONS FOR THE RECORD

Prepared Statement of Hon. Carolyn Maloney, a U.S. Representative from 
                                New York
    I want to thank Chairman Casey for working with me to hold today's 
hearing.
    I wish we were having a hearing on job creation--instead we're 
having one on why the House voted to strip job creators of the tools 
they need to grow the nation's economy, expand exports, and hold us in 
the government accountable for how well the country is doing. Right now 
there is a concerted effort to cut funds for the Census Bureau and 
eliminate several of the vital surveys they conduct or weaken them by 
telling our nation that certain crucially important surveys should not 
be required of all its citizens.
    In studying this issue, I remember reading about what 
Representative James Madison said when he served in this House, who 
wrote and I quote:

        ``this kind of information all legislatures had wished for, but 
        this kind of information had never been obtained in any country 
        . . .
        if the plan were pursued in taking every future census, it 
        would give [Congress] an opportunity of marking the progress of 
        the society, and distinguishing the growth of every interest.''

    This is not a fight about if the funds for these surveys are the 
best return on the taxpayer's investment; because I think we will hear 
today that it is. It's a fight over ideology. This is a slippery slope, 
where ideological bullies threaten the trust, confidence, and 
independence of our nation's most critical statistics. As we continue 
to compete in a world economy, it's imperative that we know how we're 
doing relative to other global economies. In our current economic 
times, it makes no sense to stop collecting such invaluable information 
that guides economic recovery and growth.
    Let me be clear, the surveys that the House voted to eliminate are 
the best measurement of our nation's progress. The information from the 
American Community Survey and the Economic Census allow both the 
private and public sectors of our economy to be more efficient, and 
because we are more efficient they allow us to better compete globally 
and maintain our standard of living. It is that simple. Doing away with 
these surveys or weakening some by making them voluntary hurts the 
nation and takes away a competitive advantage.
    The American Community Survey is unique for its ability to produce 
annual economic and social data for the nation, down to the smallest 
geographic areas. Policymakers and federal agencies use census 
information to distribute more than $450 billion in federal funds to 
state and local governments, based, in whole or in part, on ACS data. 
Local governments use ACS information to decide where to build new 
roads, schools, and hospitals.
    But it is not just government that uses this information; the 
private sector, the business community, the ``job creators'' use it to 
make assessments about location, local labor force, new markets, and 
customer needs.
    The Economic Census also is under threat, with funding cuts meaning 
the 2012 effort would be halted even as the Bureau is ramping up to 
distribute the survey to thousands of businesses in the coming months. 
The Economic Census is the fundamental building block of Gross Domestic 
Product and national income and product accounts, and essential to 
accurately measuring industrial productivity, changes in price indices, 
and annual and quarterly indicators of business activity.
    In a letter last fall to House and Senate Appropriators, six former 
Census Bureau directors noted that absent the 2012 Economic Census, 
public and private decision-makers would have to use a 2007 model of 
our country's economy until 2022. The former directors--who 
collectively led the Bureau for four decades, serving six Presidents 
from both political parties--stated that,

        ``going without a 2012 Economic Census in the midst of the 
        worst recession in half a century is akin to turning off the 
        country's economic GPS at the very moment it is critically 
        needed.''

    This is deja vu all over again. We had this debate when we were a 
new nation and Madison and Jefferson strongly urged Congresses to put 
questions about age, gender, citizenship, occupation, manufacturing, 
and industry on census forms two centuries ago. We had it again during 
the Eisenhower Administration when Congress failed to fund the Economic 
Census and the outcry gave us the 1954 act that mandated an Economic 
Census every five years. We had it again on the eve of 1970 census when 
Senator Ervin held three days of hearings about the long form. Each 
time Congresses came to their senses and turned to the Census experts 
to professionally design the surveys and questions needed by the nation 
in a manner that put the least burden on the public.
    This time is different, as the House has effectively defunded both 
the ACS and the Economic Census without so much as a witness, let alone 
a hearing or meaningful debate. This Congress should not be the first 
in history to deny itself, the executive, state and local governments, 
and the nation's business community information that the Founders and 
every Congress since have judged essential for a growing, prosperous 
nation. Today we are trying to remedy that by hearing from some experts 
on the impacts of this stunning decision. My hope is that this hearing 
causes the Congress to reconsider its impulsive decision, and that we 
act quickly to fully restore funding to these programs and give the job 
creators the tools we promised them, and that we have provided as a 
nation for two centuries.
                               __________
    Prepared Statement of Representative Kevin Brady, Vice Chairman,
                        Joint Economic Committee
    I thank the witnesses for appearing at today's hearing.
    The Joint Economic Committee has a long history of interest in the 
accuracy, relevance, and timeliness of U.S. economic statistics. 
Washington relies upon these statistics to make policy decisions, and 
American job creators use these statistics to make employment and 
investment decisions.
    I wish this hearing had been called to make a broad inquiry into 
the accuracy, relevance, and timeliness of all U.S. economic statistics 
instead of focusing narrowly on the American Community Survey. Since 
this Committee is unlikely to have another opportunity during this 
Congress to explore how to rectify deficiencies in U.S. economic 
statistics, the Republican Members of this Committee will not confine 
our inquiry to the American Community Survey. Instead, the witnesses 
invited by the Republican side of the aisle, Mr. Grant Aldonas and Dr. 
Keith Hall, will broadly explore how Congress and U.S. statistical 
agencies can work together to improve the quality of economic 
statistics for the benefit of the American people.
    Frankly, this hearing is being held because the House of 
Representatives agreed to two amendments in the appropriations bill for 
fiscal year 2013 that covers the Census Bureau. One would prevent the 
Census Bureau from using funds to compel Americans to fill out the 
American Community Survey; the other would defund it altogether.
    Compulsory participation in the American Community Survey is the 
number one objection that I hear over and over from my constituents. In 
my opinion, this objection swayed the majority of the House on these 
two amendments concerning the Census Bureau.
    Recognizing the importance of the statistics generated by the 
American Community Survey to economic decision-making by both 
governmental and private entities, I believe that there is a way 
forward. As former Commissioner Hall will testify, participation in the 
monthly Current Population Survey that generates the unemployment rate 
and other employment statistics is voluntary. The Bureau of Labor 
Statistics and the Census Bureau jointly design the Current Population 
Survey in such a way as to generate accurate statistics on a voluntary 
basis.
    If the Census Bureau were to make participation in the American 
Community Survey voluntary rather than compulsory, most public 
opposition would disappear. The Bureau of Labor Statistics and the 
Census Bureau can jointly use a voluntary survey to obtain the 
necessary data from the Current Population Survey to generate accurate 
employment statistics, so why can't the able statisticians at the 
Census Bureau design a voluntary survey for the American Community 
Survey that would generate accurate statistics?
    Now, let me turn to other issues. I have long been concerned about 
the quality of our statistics measuring international trade and 
investment flows and the output of the services sectors. For example, 
we cannot accurately count the number of jobs created by exports of 
American goods and services. Moreover, we rely on outdated rules of 
origin that ignore global supply chains and attribute, for example, all 
of the value of an i-phone assembled in China as a Chinese export even 
though final assembly accounts for only 8% of an i-phone's total value. 
From his experience as both Under Secretary for International Trade at 
the Department of Commerce and Chief International Trade Counsel at the 
Senate Finance Committee, Mr. Aldonas will outline what steps Congress 
and the statistical agencies should take together to improve the 
quality of U.S. international trade and investment statistics.
    Many statistical issues involve the price indices that are used to 
deflate gross service revenues into real services output. As a former 
Commissioner of the Bureau of Labor Statistics, Dr. Hall will offer his 
suggestions on how to improve not only the quality of labor statistics, 
but also the quality of price indices affecting the measurement of 
international trade and the real output of the services sector as well.
    U.S. statistical agencies have a proud tradition of reporting 
economic data objectively regardless of the political ramifications for 
the incumbent administration. In the Green Jobs Act, however, the 
Democratic leadership in Congress inserted an ill-defined and ill-
conceived mandate for the Bureau of Labor Statistics to count ``green 
jobs.''
    This ``green jobs'' mandate, which is a thinly disguised attempt to 
create a metric to support a policy agenda, reeks of politics. 
Something is not quite right when, as I understand it, ``green jobs'' 
include EPA bureaucrats and attorneys that are suing to block the 
construction of the Keystone pipeline--a project that would create up 
to 20,000 jobs and reduce our nation's dependence on unfriendly oil 
sources in the Middle East and Venezuela. Is there any economically 
meaningful definition of a ``green job?'' As the official formerly 
charged with executing this mandate, Dr. Hall, I would like to hear 
your opinion.
    I look forward to the testimony of today's witnesses.




                                  
