Sunday, October 18, 2015

Congressional Complications May Delay GDP Data

WSJ reports:
 [L]egislative delay may cause a key government economic survey to be scrapped for the quarter, depriving a half dozen agencies, including the Commerce Department and Federal Reserve, of data that they use to build some of the nation’s main economic indicators, including the gross domestic product and the nation’s flow of funds.

At the heart of this potential mishap is a little known and uncontroversial program from the Census Bureau that surveys U.S. businesses. The survey required reauthorization at the end of September, but with lawmakers confronting a potential government shutdown and disarray in the House of Representatives, the required legislation to keep the survey alive floundered....

“This isn’t a question of a dispute over whether the data should be collected,” said Dan Newlon, the director of government relations for the American Economic Association. “Nobody in Congress thinks the data shouldn’t be collected. It’s a question of Congress getting its act together, as best I can understand, and authorizing an essential survey.”

The House passed the bill reauthorizing the survey on Sept. 24 by an uncontroversial voice vote. The Senate also passed the bill with unanimous consent on Oct. 6, but that version added a requirement that the Census Bureau produce a report on its cybersecurity practices. By then the House of Representatives was in disarray because Speaker of the House John Boehner (R., Ohio) had announced he would resign. Just two days after the Senate vote, Kevin McCarthy (R., Calif.) the leading candidate to succeed Mr. Boehner, withdrew from consideration. The necessary votes to reconcile the two measures did not get scheduled before the House went into recess for the Columbus Day holiday.

Despite budget pressures in Congress, the report’s funding is intact. The Census Bureau just lacks legal authority to use the funds for this survey—about $5 million a year, according to the Congressional Budget Office....
As of Oct. 1, the Census Bureau has ceased collecting data on the survey. The House comes back into session on Oct. 20 and the Census Bureau could resume collecting data as soon as the survey passes. But the House has a packed agenda of crucial items—the U.S. Treasury is poised to run out of room to maneuver on the debt ceiling in less than a month—and at some point, the quality of the survey could be too low to publish

Free market economists may not be too concerned about this. SEE: The Evils of Government Data Collection (And Its Origins) 


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