Three federal government agencies that collect and analyze American economic data could face spending cuts under the House Republican budget, jeopardizing important funds won by the agencies in the wake of the 2008 financial crisis.
The U.S. Census Bureau began fighting for extra funding in the 1990s and pushed for more money to study real estate and financial data in 2003, arguing that the analysis was important to measure growing markets in the American economy. It didn’t win the funding until 2009, though, after the financial crisis had already hit, Bloomberg BusinessWeek reports:
Finally, in early 2009, after the real estate-fueled financial crisis, Congress gave Census what it had been asking for?an extra $8.1 million. In the view of many, it was too late. ?That?s a grand example of how nickel-and-diming statistics agencies can screw up the economy,? says Andrew Reamer, a research professor at the George Washington University Institute of Public Policy and a member of the BEA?s advisory committee. ?The government saved $8 million, but how many trillions were lost as a result of not being able to see the crisis coming??
That extra data, says Reamer, would?ve revealed just how quickly certain parts of the economy were slowing down. For example, in April 2008 the BEA, with no quarterly data to work with, estimated that finance and insurance sector activity fell 0.3 percent in 2007. In July 2011, the BEA recrunched those numbers using quarterly data and showed declines of 2.2 percent, 5.3 percent, and 9.9 percent for those sectors in the last three quarters of 2007.
According to Bloomberg, the three agencies that collect and analyze most economic data — the Census Bureau, the Bureau of Economic Analysis, and the Bureau of Labor Statistics — have combined budgets of $1.6 billion, less than a tenth-of-one-percent of the federal budget. But under the Republican budget authored by House Budget Committee Chairman Paul Ryan (R-WI), the agencies are likely to face budget cuts that wipe away the extra funds they received after the financial crisis, a move not even the Chamber of Commerce — a typical GOP ally on deficit reduction — supports.
The House GOP’s budget makes also makes cuts to other programs that resulted from the financial crisis. It repeals reforms that were a part of the Dodd-Frank Wall Street Reform Act, slashes the Consumer Financial Protection Bureau’s budget by two-thirds, and eliminates the federal government’s foreclosure prevention program.