The Consequences of Budget Cuts

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Written by: Director Robert Groves

I have devoted much of this blog over the last two years to discussions about how the taxpayers who finance federal statistical findings can evaluate the quality of our work. Federal statistics play a critical role in our democracy, providing objective and documented measures of our economy and society. We often take these measures for granted, assuming that the federal statistical system will continue to provide timely, reliable, and relevant current measures of our economy and society as well as periodic benchmark measures.

Each year the Congress and the Executive Branch work to formulate a budget for the Federal government, including the Census Bureau. Given our nonpartisan mission, we are careful both to avoid any appearance of partisan views, and to be straight about the statistical and scientific consequences of budgetary decisions. To do otherwise would erode public confidence in the statistics themselves.

As the country continues to debate about its fiscal future, the budget spotlight this week came to focus on the Census Bureau. We began developing our Fiscal Year 2012 budget last spring. In formulating that budget, we reviewed our existing economic and demographic statistics programs and determined that we needed to terminate a number of existing programs such as the Current Industrial Reports program, the Statistical Abstract, and our foreign demographic analysis program to mention a few, in order to fund higher priority programs. In anticipation of tight spending limits, we have been making numerous cost efficiency moves throughout the Census Bureau. Last month we announced a decision to close six of our twelve regional offices. We have delayed filling hundreds of vacancies at our Suitland, Maryland headquarters, and have taken steps to achieve long term savings through consolidation of IT resources and innovative business processes. I have tortured readers of this blog by repeated notes about my beliefs that we must become more efficient to survive.

The President presented a Census Bureau budget to Congress that was a real 11% cut from our funding the previous year. The Appropriations Committee in the House of Representatives has taken the first official action on that proposal, and cut that proposed budget further by 16.5 percent; our periodic programs request was cut 21 percent. The next steps for our funding bill are to be considered and then passed by the full House, then sent to the Senate.

A cut of this magnitude in our periodic programs account means we cannot do all the work the Congress has asked us to do. Our ability to provide high quality and comprehensive statistical data will be severely diminished if we sustain such a large budget cut and we will be forced to cancel major programs that provide critical benchmark measures. This reduction also will force the layoffs of up to 700 employees from our headquarters workforce of almost 4,600. In addition to the personal hardships that would cause the hard working, dedicated employees of the Census Bureau, the loss of scientific, technical, and professional expertise that would result from losing such a high percentage of our workforce would have programmatic and data quality repercussions for years to come.

If you are reading this blog, you probably already know how the data provided by the Census Bureau underlies much about what we know about our economy and our people. For example, the Bureau of Economic Analysis uses the statistics from the Economic Census to benchmark Gross Domestic Product (GDP) estimates and prepare input-output tables – the fundamental tool for national and regional economic planning. During benchmark years such as 2012, about 90% of the data used in calculating GDP comes from the Census Bureau. The Bureau of Labor Statistics uses Census Bureau statistics to benchmark producer price indexes and prepare productivity statistics. The Federal Reserve Board uses our statistics to prepare indexes of industrial production.

Businesses use our statistics for site location, industry and market analysis, to make investment and production decisions, to gauge competitiveness, and to identify entrepreneurial opportunities. Detailed industry information for small geographic areas permits state and local agencies to forecast economic conditions, plan economic development, transportation, and social services. Using our statistics, national and local news media report back to investors and the general public their personal evaluations of how well the economy is doing and how our society is changing.

We too are taxpayers, and we greatly appreciate these are difficult fiscal times. That is why we took steps to shrink our budget and find efficiencies that would not put our major, key surveys at risk. I will be writing more here as our funding legislation works its way through Congress.

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12 Responses to The Consequences of Budget Cuts

  1. these “difficult fiscal times” need not be difficult if only the Congress made corporations pay a fair tax, in many cases they are paying no taxes at all. Also, how about those at the top, pay their share too, getting rid of the Bush tax cuts surely will not make the millionaires and billionaires suffer financially. If everyone must “tighten” our belts, then let EVERYONE mean EVERYONE, including(if not starting) with those at the top, please pass this on to the Congress and President. Thank you Director Groves.

  2. Carol Elliott says:

    I second the commnets by Leopold Cuevas!

  3. A WOlf says:

    Stop telling me your worth the Money! Now get back to work.

  4. Sean Davis says:

    Cutting budgets just to cut spending does nothing to stem the rising costs of doing business or solving the problems that waste money. Over time the budgets will need more funds which means that new revenue streams need to be explored such as closing tax loopholes and stopping corporate welfare for those companies that are making billions of dollars.
    in order to control costs any practice that is unneeded, redundant or just wastes money needs to be stopped and any practice that feeds them needs to either be dropped as well if there are no other uses for the practice.
    The republicans need to step up and prove that the low taxes on the wealthiest of the nation, the tax loopholes and the corporate welfare really does what they state they do, no proof then the practice should stop.

  5. Ellen says:

    Sadly they are only hurting themselves. They too use Economic Census data to tell them about their constituents. Wonder what will happen when they want the data and are told sorry but we can’t give that to you anymore because you cut our budget so much we had terminate that program.

  6. Jennifer says:

    Hello Director Groves,
    According to this article
    http://newsbreaks.infotoday.com/NewsBreaks/US-Census-Bureau-to-Eliminate-Strategic-Publications-Including-Statistical-Abstracts-74588.asp
    You will not be cutting Economic Census, is that true?
    Jennifer Boettcher

  7. Cynthia says:

    It seems so foolish to cut back on the very numeric data that we need for the country and its’ citizens to make informed decisions regarding the budget and our economy. Frankly I am still reeling from the cancellation of the Statistical Abstract, a publication I use every single day in my job as a Librarian.

  8. Jennifer,
    The article you cite is from three months ago and discusses many of the cuts we initiated in order to fund higher priority programs, like the Economic Census. We’re now at a different point in the budget process where the House Appropriations Committee has proposed deeper cuts. These cuts mean we cannot do all the work the Congress has asked us to do, which would force us to cancel major programs.

  9. Richard says:

    these “difficult fiscal times” need not be difficult if only the Congress made corporations pay a fair tax, in many cases they are paying no taxes at all. Also, how about those at the top, pay their share too, getting rid of the Bush tax cuts surely will not make the millionaires and billionaires suffer financially. If everyone must “tighten” our belts, then let EVERYONE mean EVERYONE, including(if not starting) with those at the top, please pass this on to the Congress and President. Thank you Director Groves.

  10. Barry says:

    It’s a sad day when the air supply for a transparent society goes dark.
    Restore the tax structure of the 1950′s and stop military adventures and this would not be necessary. This is akin to the burning of the library in Alexanderia so many generations ago.

  11. SteveASmith says:

    This is exactly what needs to happen. The GOP always wants to ahrken back to the good ole days of yesteryear aka the 50s. Well elts go back then fiscal policy wise.

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