United States General Accounting Office

GAO Testimony

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

Statement 

Statistical Agencies: Proposed

Consolidation and Data Sharing Legislation

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

Background 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

1

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

1996).

Page 1 GAO/T-GGD-98-91
Statement 

Statistical Agencies: Proposed

Consolidation and Data Sharing Legislation

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

Reorganization

Principles

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.

Title I: The Federal

Commission on

Statistical Policy

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,

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.

3

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

Page 2 GAO/T-GGD-98-91
Statement 

Statistical Agencies: Proposed

Consolidation and Data Sharing Legislation

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.

4

Economic Statistics: Status Report on the Initiative to Improve Economic Statistics (GAO/GGD-95-98,

July 7, 1995).

Page 3 GAO/T-GGD-98-91
Statement 

Statistical Agencies: Proposed

Consolidation and Data Sharing Legislation

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.

Title II: Efficiency and

Confidentiality of the

Federal Statistical

System

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

5

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

Page 4 GAO/T-GGD-98-91
Statement 

Statistical Agencies: Proposed

Consolidation and Data Sharing Legislation

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

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).

Page 5 GAO/T-GGD-98-91
Statement 

Statistical Agencies: Proposed

Consolidation and Data Sharing Legislation

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.

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.

8

See Private Lives and Public Policies: Confidentiality and Accessibility of Government Statistics,

National Academy Press (Washington, D.C.: 1993).

Page 6 GAO/T-GGD-98-91
Page 7 GAO/T-GGD-98-91
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).

(410319) Page 8 GAO/T-GGD-98-91
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