Statistical Agencies: Proposed Consolidation and Data Sharing Legislation
(Testimony, 03/26/98, GAO/T-GGD-98-91).

GAO discussed Titles I and II of S. 1404, a reorganization proposal
involving parts of the federal statistical system.

GAO noted that: (1) S. 1404 seems to be consistent with the five
principles GAO identified in May 1995 as a framework for analyzing
efforts to reorganize or streamline government agencies; (2) it uses a
novel delegation approach featuring a bipartisan commission charged with
submitting a detailed reorganization plan to Congress for expedited
consideration; (3) the bill's proposed Federal Commission on Statistical
Policy would have a charter that is quite different from most previous
commissions, in that it embodies fairly explicit understanding that the
result of its work will be a detailed series of recommendations on how
to consolidate three federal statistical agencies; (4) also, the
Commission is given a firm, 18-month timetable to devise and get
accepted by Congress, under fast-track consideration priority, a
reorganization plan that is limited to implementing its recommendations
for consolidation; (5) then, and only if its recommended plan is
accepted by Congress, would the Commission continue in existence, with
such further assignments as recommending appointment nominations and
solutions to key policy issues; (6) title II of the bill would also
provide uniform safeguards for the conditional confidentiality of
information acquired for exclusively statistical purposes and improve
the efficiency and quality of federal statistical programs by permitting
limited sharing of records among designated agencies; (7) because the
federal statistical system is decentralized, different agencies are
sometimes responsible for various stages of producing statistics; (8) in
1996, the Office of Management and Budget (OMB) and the Department of
the Treasury sent to Congress proposed legislation that would permit
limited sharing of data among designated statistical agencies for
statistical purposes, subject to procedural safeguards contained in the
proposals; (9) in 1997, both of these bills were retransmitted to
Congress, with indications of bipartisan support in both houses; (10)
while S. 1404 does not include the conforming amendments that OMB
developed with the major statistical agencies, and on which there was
apparently some debate among agencies, it does offer OMB the opportunity
to submit conforming changes within 90 days and in other respects seems
consistent with the OMB proposal; and (11) since the current inability
of federal agencies to share data is one of the principal arguments for
statistical agency consolidation, it is possible that enacting title II
of S. 1404 may lessen the urgency of the consolidation which is the
presumed purpose of tile I.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-98-91
     TITLE:  Statistical Agencies: Proposed Consolidation and Data 
             Sharing Legislation
      DATE:  03/26/98
   SUBJECT:  Interagency relations
             Federal agency reorganization
             Government information dissemination
             Proposed legislation
             Statistical data
             Centralization
             Confidential communication
             Congressional/executive relations
             Congressional oversight
             Agency missions

             
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Cover
================================================================ COVER


Before the Subcommittee on Government Management, Information, and
Technology, Committee on Government Reform and Oversight,
House of Representatives

For Release on Delivery
Expected at
2:00 p.m., EST
Thursday
March 26, 1998

STATISTICAL AGENCIES - PROPOSED
CONSOLIDATION AND DATA SHARING
LEGISLATION

Statement of L.  Nye Stevens
Director, Federal Management and Workforce Issues
General Government Division

GAO/T-GGD-98-91

GAO/GGD-98-91T


(410319)


Abbreviations
=============================================================== ABBREV

  BEA - Burea of Economic Analysis
  BLS - Burea of Labor Statistics
  NPR - National Performance Review
  NABE -
  OMB - Office of Management and Budget

STATISTICAL AGENCIES:  PROPOSED
CONSOLIDATION AND DATA SHARING
LEGISLATION
==================================================== Chapter STATEMENT

Mr.  Chairman and Members of the Subcommittee: 

Thank you for this opportunity to discuss a reorganization proposal
involving parts of the federal statistical system.  Over the years,
we have developed a considerable body of work on statistical issues. 
The related products list that follows my statement contains our most
recent reports and testimonies.  As you requested, my testimony today
brings this body of work to bear on a specific legislative proposal
before the Subcommittee, S.  1404, and its House counterpart, which
has not yet been introduced.  Title I of the bill would establish a
Federal Commission on Statistical Policy with the initial mandate of
considering an organizational consolidation of three statistical
agencies.  Title II, which would be effective upon enactment, is
intended to address the long-standing problem of data sharing among
federal agencies.  In general, we found that this bill responds
constructively to many of the observations and reservations we
expressed in evaluating previous proposals to consolidate statistical
agencies, including our March 22, 1996, testimony before this
Subcommittee.\1


--------------------
\1 Government Statistics:  Proposal to Form a Federal Statistical
Service (GAO/T-GGD-96-93, Mar.  22, 1996). 


   BACKGROUND
-------------------------------------------------- Chapter STATEMENT:1

Statistical activities are dispersed throughout the federal
government.  The Office of Management and Budget (OMB) has identified
70 federal agencies that each spend at least $500,000 annually on
statistical activities as comprising the federal statistical system. 
Together, these agencies requested over $3.13 billion for fiscal year
1998 for statistical activities.  Of the 70 agencies, 11 are
considered to be the principal statistical agencies because they
collect, produce, and disseminate statistical information as their
primary mission.  As part of their missions, they are to ensure that
the statistical information they collect, produce, and disseminate is
accurate, reliable, and free from political interference.  They are
also to ensure that they impose the least possible burden on
individuals, businesses, and others responding to requests for data. 
Most of the other agencies that produce and disseminate statistical
data do so as an ancillary part of their missions.  Together, the
principal statistical agencies spend approximately $1.6 billion
annually on statistical activities.  Of these agencies, three--the
Bureau of the Census and the Bureau of Economic Analysis (BEA) in the
Department of Commerce and the Bureau of Labor Statistics (BLS) in
the Department of Labor--account for about $1.1 billion of this
total.\2


--------------------
\2 The other eight principal statistical agencies are the National
Center for Health Statistics (in the Department of Health and Human
Services), Energy Information Administration (in the Department of
Energy), National Agricultural Statistics Service and the Economic
Research Service (both in the Department of Agriculture), Statistics
of Income Division (in the Internal Revenue Service, Department of
the Treasury), Bureau of Justice Statistics (in the Department of
Justice), the Bureau of Transportation Statistics (Department of
Transportation), and the National Center for Education Statistics in
the Department of Education. 


   REORGANIZATION PRINCIPLES
-------------------------------------------------- Chapter STATEMENT:2

In May 1995, we identified five principles as a useful framework for
analyzing efforts to reorganize or streamline government agencies.\3
These principles are: 

  -- Reorganization demands a coordinated approach. 

  -- Reorganization plans should be designed to achieve specific,
     identifiable goals. 

  -- Once the goals are identified, the right vehicle or vehicles
     must be chosen for accomplishing them, including organizational
     structure and tools. 

  -- Implementation is critical to the success of any reorganization. 

  -- Oversight is needed to ensure effective implementation. 

S.  1404 seems to us consistent with these principles.  Rather than
following the approach of detailed legislative specification of a
consolidated statistical organization, however, it uses a novel
delegation approach featuring a bipartisan commission charged with
submitting a detailed reorganization plan to Congress for expedited
consideration. 


--------------------
\3 Government Reorganization:  Issues and Principles
(GAO/T-GGD/AIMD-95-166, May 17, 1995). 


   TITLE I:  THE FEDERAL
   COMMISSION ON STATISTICAL
   POLICY
-------------------------------------------------- Chapter STATEMENT:3

The bill's proposed Federal Commission on Statistical Policy would
have a charter that is quite different from most previous
commissions, in that it embodies a fairly explicit understanding that
the result of its work will be a detailed series of recommendations
on "how" (not "whether") to consolidate the Bureau of the Census,
BEA, and BLS into a new and independent Federal Statistical Service. 
Also, the Commission is given a firm, 18-month timetable to devise
and get accepted by Congress, under fast-track consideration
priority, a reorganization plan that is limited to implementing its
recommendations for consolidation.  Then, and only if its recommended
plan is accepted by Congress, would the Commission continue in
existence, with such further assignments as recommending appointment
nominations and solutions to key policy issues.  These issues include
data sharing with other agencies and levels of government, enhancing
the quality of key statistical indicators, and setting priorities
among various statistical programs.  In specifying its presumption
that consolidation will be the Commission's outcome and providing
both a firm deadline for action and incentives to devise a plan
likely to gain congressional approval, Congress would provide a broad
policy mandate along with a novel solution to the implementation
problems that have often mired down reorganization proposals in the
past, particularly in the years since the presidential reorganization
authority expired in 1984. 

Several key provisions of title I of S.  1404 are consistent with
GAO's reorganization principles that I mentioned a moment ago.  The
make-up of the Commission should help ensure a coordinated approach
to the complicated task of reorganization.  Its members include not
only the Chief Statistician from the administration and a Chairman of
Cabinet-level rank appointed by the President but also 13 members
chosen in a bipartisan fashion from individuals with experience
relating to the 3 key statistical agencies (Census, BEA, and BLS). 

If it chooses to pass this bill, Congress would also be endorsing
several specific, identifiable goals for the Commission to pursue in
its reorganization plan and recommendations.  These are mostly
contained in section 2, the Findings section, where the bill makes
clear that its overall purpose is to solve problems of coordination,
duplication, utility, quality, and paperwork burden reduction in the
collection of federal statistics.  The existence of these problems
has been well documented in our work, and in the hearings held on
predecessor bills by this Subcommittee in March 1996, and by the
Senate Governmental Affairs Subcommittee on Oversight of Government
Management, Restructuring, and the District of Columbia in April
1997. 

In reviewing the status of the 38 recommendations of the 1991
Economic Statistics Initiative, led by former Council of Economic
Advisors Chairman Michael Boskin, for example, we found that only
about half of the recommendations to improve statistical quality were
implemented.\4 In February 1997, the National Association of Business
Economists (NABE) reported that nearly 70 percent of its members who
responded to its survey were dissatisfied with the scope and quality
of economic data in the United States. 

S.  1404 also seems to embody GAO's third reorganization principle
that the right vehicle and tools must be chosen to reach the goals
that Congress endorses.  It correctly recognizes that reorganization
by itself--the process of moving agencies to new locations--is not
enough.  The bill provides that once reorganization is achieved, the
Commission would continue in existence to conduct comprehensive
studies and report to Congress on "all matters relating to the
[f]ederal statistical infrastructure .  .  .  for the purpose of
identifying opportunities to improve the quality of statistics in the
United States." This provision encourages the Commission to address
numerous other statistical policy and organizational issues,
including the selection of priorities for funding, expansion, and
elimination; information dissemination; privacy; international
coordination; and technological adaptation. 

Our past work has shown that implementation is critical to the
success of any reorganization.  This is properly a task for the
Commission itself to address in its recommended reorganization plan. 
When presidential reorganization authority was still in existence, we
recommended that any reorganization plans presented to Congress under
its fast-track authority should have detailed provisions for
implementation as an integral part of the plan itself.\5

Finally, sustained congressional oversight will be needed to ensure
the effective implementation of any reorganization that would emerge
from enactment of this bill.  One specific way to encourage effective
oversight would be to make sure that the Federal Statistical Service
be required to comply with the Government Performance and Results Act
of 1993.  Once the reorganization is implemented, Congress also may
need to consider realigning its committee jurisdictions and budget
account structure if it is to provide coherent direction to and
consistent oversight of the new Federal Statistical Service. 


--------------------
\4 Economic Statistics:  Status Report on the Initiative to Improve
Economic Statistics (GAO/GGD-95-98, July 7, 1995). 

\5 Implementation:  The Missing Link in Planning Reorganizations
(GAO/GGD-81-57, Mar.  20, 1981). 


   TITLE II:  EFFICIENCY AND
   CONFIDENTIALITY OF THE FEDERAL
   STATISTICAL SYSTEM
-------------------------------------------------- Chapter STATEMENT:4

The bill would also provide uniform safeguards for the
confidentiality of information acquired for exclusively statistical
purposes and improve the efficiency and quality of federal
statistical programs by permitting limited sharing of records among
designated agencies.  The issue of data sharing among federal
agencies for statistical purposes has been a long-standing and
complicated problem.  Because the federal statistical system is
decentralized, different agencies are sometimes responsible for the
various stages of producing statistics.  However, agency
confidentiality provisions that permit data to be seen only by the
employees of a single agency currently present a formidable barrier
to data sharing.  In some instances, to comply with confidentiality
requirements, agencies must duplicate the work being done by other
agencies.  For example, because of provisions limiting access to
Census records, other statistical agencies at times have had only
limited access to data the agencies had paid Census to collect. 

For the past 2 decades, we and others have urged legislative changes
that would allow greater sharing of data and information on data
sources among agencies, but so far these efforts have met with little
success.\6 The Paperwork Reduction Act of 1980 gave the Director of
OMB the authority to direct a statistical agency to share information
it had collected with another statistical agency.  However, this
authority was limited since it did not apply to information that was
covered by laws prohibiting disclosure outside the collecting agency. 
In the early 1980s, the statistical agencies, under OMB's leadership,
tried to further enable federal statistical agencies to share data. 
They attempted to synthesize, in a single bill, a set of
confidentiality policies that could be applied consistently to all
federal agencies or their components that collected data for
statistical purposes.  This effort, which was known as the
"statistical enclave" bill, would have allowed statistical agencies
to exchange information under specific controls intended to preserve
the confidentiality of the data providers.  A bill was introduced in
Congress but was not enacted. 

More recent proposals concerning data sharing have called for
enactment of legislation that would allow statistical agencies to
share data and information with appropriate safeguards to protect
against breaches of confidentiality.  These proposals were not
adopted, in part because of general concerns that greater data
sharing might endanger the privacy of individuals.  Both the Economic
Statistics Initiative under President Bush and the National
Performance Review (NPR) under President Clinton have recommended
such actions.  NPR recommended the elimination of legislative
barriers to the exchange of business data among federal statistical
agencies, and we agreed with this recommendation.\7 The NPR
recommendation did not address the sharing of information on
individuals.  Some officials of statistical agencies and Members of
Congress, however, have argued that a distinction should be made
between the sharing of business data and the sharing of personal data
about individuals.  They noted that breaches of confidentiality
protection when personal information is involved may be more serious. 
The National Academy of Sciences has made recommendations regarding
the need for appropriate legislative provisions on data sharing that
the Subcommittee may wish to consider in its deliberations on S. 
1404.\8

In 1996, OMB and the Department of the Treasury sent to Congress
proposed legislation that would permit limited sharing of data among
designated statistical agencies for statistical purposes, subject to
procedural safeguards contained in the proposals.  In 1997, both of
these bills were retransmitted to Congress, with indications of
bipartisan support in both houses.  While S.  1404 does not include
the conforming amendments that OMB developed with the principal
statistical agencies, and on which there was apparently some debate
among agencies, it does offer OMB the opportunity to submit
conforming changes within 90 days and in other respects seems
consistent with the OMB proposal. 

We as well as others who have studied the federal statistical system
believe that the inability of statistical agencies to share data is
one of the most significant issues facing the statistical system and
one of the major factors affecting the quality of data, the
efficiency of the system, and the amount of burden placed on those
who provide information to the agencies.  Since the current inability
of federal agencies to share data is one of the principal arguments
for statistical agency consolidation, it is possible that enacting
title II of S.  1404 may lessen the urgency of the consolidation
which is the presumed purpose of title I. 


--------------------
\6 After Six Years, Legal Obstacles Continue to Restrict Government
Use of the Standard Statistical Establishment List (GAO/GGD-79-17,
May 25, 1979). 

\7 See Management Reform:  GAO's Comments on the National Performance
Review's Recommendations (GAO/OCG-94-1, Dec.  3, 1993). 

\8 See Private Lives and Public Policies:  Confidentiality and
Accessibility of Government Statistics, National Academy Press
(Washington, D.C.:  1993). 


------------------------------------------------ Chapter STATEMENT:4.1

Mr.  Chairman, that concludes my prepared statement.  I would be
pleased to respond to any questions you or other Members of the
Subcommittee may have. 

RELATED GAO PRODUCTS

Statistical Agencies:  Consolidation and Quality Issues
(GAO/T-GGD-97-78, Apr.  9, 1997). 

Statistical Agencies:  A Comparison of the U.S.  and Canadian
Statistical Systems (GAO/GGD-96-142, Aug.  1, 1996). 

Statistical Agencies:  Statutory Requirements Affecting Government
Policies and Programs (GAO/GGD-96-106, July 17, 1996). 

Federal Statistics:  Principal Statistical Agencies' Missions and
Funding (GAO/GGD-96-107, July 1, 1996). 

Government Statistics:  Proposal to Form a Federal Statistical
Service (GAO/T-GGD-96-93, Mar.  22, 1996). 

Commerce Dismantlement:  Observations on Proposed Implementation
Mechanism (GAO/T-GGD-95-233, Sept.  6, 1995). 

Statistical Agencies:  Adherence to Guidelines and Coordination of
Budgets (GAO/GGD-95-65, Aug.  9, 1995). 

Government Reorganization:  Observations on the Department of
Commerce (GAO/T-GGD/RCED/AIMD-95-248, July 25, 1995). 

Economic Statistics:  Status Report on the Economics Statistics
Initiative (GAO/GGD-95-98, July 7, 1995). 

Economic Statistics:  Measurement Problems Can Affect the Budget and
Economic Policymaking (GAO/GGD-95-99, May 2, 1995). 

Bureau of the Census:  Legislative Proposal to Share Address List
Data Has Benefits and Risks (GAO/T-GGD-94-184, July 21, 1994). 

Gross Domestic Product:  No Evidence of Manipulation in First Quarter
1991 Estimates (GAO/GGD-93-58, Mar.  10, 1993). 

*** End of document. ***