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OVERSIGHT OF STATISTICAL PROPOSALS

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, 

INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON 

GOVERNMENT REFORM 

AND OVERSIGHT 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

JULY 29, 1997

Serial No. 105–87

Printed for the use of the Committee on Government Reform and Oversight

(

(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT 

DAN BURTON, Indiana, Chairman 

BENJAMIN A. GILMAN, New York 

J. DENNIS HASTERT, Illinois 

CONSTANCE A. MORELLA, Maryland 

CHRISTOPHER SHAYS, Connecticut 

STEVEN SCHIFF, New Mexico 

CHRISTOPHER COX, California 

ILEANA ROS-LEHTINEN, Florida 

JOHN M. MCHUGH, New York 

STEPHEN HORN, California 

JOHN L. MICA, Florida 

THOMAS M. DAVIS, Virginia 

DAVID M. MCINTOSH, Indiana 

MARK E. SOUDER, Indiana 

JOE SCARBOROUGH, Florida 

JOHN B. SHADEGG, Arizona 

STEVEN C. LATOURETTE, Ohio 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

PETE SESSIONS, Texas 

MICHAEL PAPPAS, New Jersey 

VINCE SNOWBARGER, Kansas 

BOB BARR, Georgia 

ROB PORTMAN, Ohio 

HENRY A. WAXMAN, California 

TOM LANTOS, California 

ROBERT E. WISE, JR., West Virginia 

MAJOR R. OWENS, New York 

EDOLPHUS TOWNS, New York 

PAUL E. KANJORSKI, Pennsylvania 

GARY A. CONDIT, California 

CAROLYN B. MALONEY, New York 

THOMAS M. BARRETT, Wisconsin 

ELEANOR HOLMES NORTON, Washington, 

DC 

CHAKA FATTAH, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland 

DENNIS J. KUCINICH, Ohio 

ROD R. BLAGOJEVICH, Illinois 

DANNY K. DAVIS, Illinois 

JOHN F. TIERNEY, Massachusetts 

JIM TURNER, Texas 

THOMAS H. ALLEN, Maine 

HAROLD E. FORD, JR., Tennessee 

———

BERNARD SANDERS, Vermont 

(Independent) 

KEVIN BINGER, Staff Director 

DANIEL R. MOLL, Deputy Staff Director 

WILLIAM MOSCHELLA, Deputy Counsel and Parliamentarian 

JUDITH MCCOY, Chief Clerk 

PHIL SCHILIRO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY

STEPHEN HORN, California, Chairman 

PETE SESSIONS, Texas 

THOMAS M. DAVIS, Virginia 

JOE SCARBOROUGH, Florida 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

ROB PORTMAN, Ohio 

CAROLYN B. MALONEY, New York 

PAUL E. KANJORSKI, Pennsylvania 

MAJOR R. OWENS, New York 

ROD R. BLAGOJEVICH, Illinois 

DANNY K. DAVIS, Illinois 

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California 

J. RUSSELL GEORGE, Staff Director and Chief Counsel 

MARK UNCAPHER, Counsel 

JOHN HYNES, Professional Staff Member 

ANDREA MILLER, Clerk 

DAVID MCMILLEN, Minority Professional Staff Member 

(III)

C O N T E N T S 

Page 

Hearing held on July 29, 1997 ............................................................................... 1

Statement of: 

Katzen, Sally, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget, accompanied by Katherine 

Wallman, Chief Statistician of the United States ...................................... 2

Sondik, Edward J., Director, National Center for Health Statistics; Jay 

Hakes, Administrator, Energy Information Administration, Department 

of Energy; Everett Ehrlich, former Under Secretary for Economic Affairs, Department of Commerce, Clinton Administration, ESC Corp.; 

Mark Wilson, Rebecca Lukens fellow in labor policy, Heritage Foundation; and Mary Susan Vickers, research director, Interstate Conference 

of Employment Security Agencies, Inc. ....................................................... 30

Letters, statements, etc., submitted for the record by: 

Ehrlich, Everett, former Under Secretary for Economic Affairs, Department of Commerce, Clinton Administration, ESC Corp., prepared statement of ........................................................................................................... 46

Hakes, Jay, Administrator, Energy Information Administration, Department of Energy, prepared statement of ...................................................... 42

Katzen, Sally, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget: 

Director’s review ........................................................................................ 17

Information concerning requests per year from departments ............... 23

Information concerning survey requests turned down in the average 

year ......................................................................................................... 25

Prepared statement of ............................................................................... 5

Sondik, Edward J., Director, National Center for Health Statistics, prepared statement of ........................................................................................ 32

Vickers, Mary Susan, research director, Interstate Conference of Employment Security Agencies, Inc., prepared statement of ................................ 62

Wilson, Mark, Rebecca Lukens fellow in labor policy, Heritage Foundation, prepared statement of .......................................................................... 51

(1)

OVERSIGHT OF STATISTICAL PROPOSALS 

TUESDAY, JULY 29, 1997 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, 

INFORMATION, AND TECHNOLOGY, 

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:03 p.m., in room 

2154, Rayburn House Office Building, Hon. Stephen Horn (chairman of the subcommittee) presiding. 

Present: Representatives Horn and Sununu. 

Staff present: J. Russell George, staff director and chief counsel; 

Mark Uncapher, counsel; John Hynes, professional staff member; 

Andrea Miller, clerk; David McMillen, minority professional staff 

member; and Ellen Rayner, minority chief clerk. 

Mr. HORN. The meeting of the Subcommittee on Government 

Management, Information, and Technology will begin. 

The economic statistics gathered and analyzed by the Federal 

Government are integral to public and private decisionmaking. The 

financial markets rise and fall based on the data provided by the 

government. Federal aid is determined and distributed using this 

information. Businesses make a wide variety of decisions with reference to these statistics. Although sound statistics and analysis do 

not by themselves produce sound public policy, they do provide the 

necessary foundation from which to identify problems, to evaluate 

options, and to monitor results. 

We are here to consider three initiatives intended to encourage 

greater cooperation and coordination between the Federal Government’s statistical agencies. 

The first is the consolidation of the three main statistical agencies into a single entity. Introduced last Congress as the Statistical 

Consolidation Act, this measure would create the Federal Statistical Service as an independent agency. The Service would incorporate the Bureau of the Census, the Bureau of Labor Statistics, 

and the Bureau of Economic Analysis. This proposal directly addresses the need for better coordination and planning among economic statistical agencies. 

The second initiative under discussion today is the creation of a 

commission. Senator Daniel Patrick Moynihan of New York has 

proposed that a commission be established to provide ‘‘a comprehensive examination of our current statistical system and focus 

particularly on the agencies that produce data as their primary 

product.’’ The commission would be charged with recommending a 

2

strategy to maintain a modern and efficient statistical infrastructure. 

The third initiative is a data sharing proposal put forward by the 

administration. This measure would designate eight statistical 

agencies as statistical data centers and establish new laws to assure confidential treatment of statistical data in this environment. 

The bill would allow agencies to propose data sharing projects and 

would provide protections for the confidentiality of information. 

All of these proposals share the goal of improving Federal statistical systems by reducing the organizational and legal barriers to 

greater coordination. Each seeks to address the fragmented nature 

of the Federal Government’s statistical agencies. Our challenge 

now is to build a consensus for concrete steps toward reform. A 

very productive discussion has been under way for several months 

now between the House and the Senate. We are working for a 

rough outline for reform and are confident that an agreement will 

soon be reached between the two legislative bodies. 

We are fortunate enough to be joined by experts who can help 

us move toward a consensus proposal. We begin with the view from 

the administration: Sally Katzen, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget. 

After Ms. Katzen, Dr. Edward J. Sondik, Director, National Center 

for Health Statistics, and Mr. Jay Hakes, Administrator, Energy 

Information Administration, Department of Energy, will round out 

the testimony from the administration. 

We will continue the discussion by turning to some of the top 

minds working on statistical issues at the Federal level. They will 

help us to sort through the many complexities involved in improving Federal statistics, and we look forward to their testimony. 

So welcome to all witnesses. We will begin with this panel. Since 

this is a separate hearing, we should swear you in. 

[Witnesses sworn.] 

Mr. HORN. We will note both Ms. Katzen and Ms. Wallman, the 

Chief Statistician of the United States, did affirm the oath. 

We will begin with Ms. Katzen. 

STATEMENT OF SALLY KATZEN, ADMINISTRATOR, OFFICE OF 

INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET, ACCOMPANIED BY KATHERINE 

WALLMAN, CHIEF STATISTICIAN OF THE UNITED STATES 

Ms. KATZEN. Thank you very much, Mr. Chairman. It is a pleasure to return to your subcommittee and to return to a discussion 

of this issue. 

Your counsel provided me the opening line that I used the last 

time I was here to testify on this subject, when I said I hope this 

is the first of many opportunities to engage with your subcommittee on how best to enhance the efficiency and effectiveness 

of our Federal statistical activities. I was prescient then, and I am 

delighted to return to this subject. 

In your opening statement you reflected on the goal—it is a goal 

we share—to improve the quality and usefulness of our Nation’s 

statistics, even as we seek to maximize the effectiveness of scarce 

resources for statistical activities and minimize the burden we impose on the American public. 

3

When I testified before you last March, I outlined a number of 

initiatives that we were pursuing to achieve this goal; and I would 

like to report briefly on the progress that has been made since that 

time. 

First, with respect to the strengthening of confidentiality protections, we have now issued the Federal Statistical Confidentiality 

Order which officially took effect yesterday, July 28, 1997. In brief, 

this order establishes a consistent confidentiality policy for a dozen 

agencies initially and which other agencies may aspire to meet in 

the future. The analyses required by the order will provide a comprehensive assessment of current disclosure policies and practices 

for consistency with this governmentwide policy and will result in 

corrective action, if necessary. 

Second, we have completed our work with the statistical agencies 

to prepare and submit to Congress the administration’s proposed 

Statistical Confidentiality Act, which you and Mrs. Maloney introduced during the last session as H.R. 3924. In brief, enactment of 

this legislation would: create a credible governmentwide confidentiality umbrella that would guarantee that the entire government 

stands behind pledges of statistical confidentiality; create the legal 

presumption that data collected for any purpose may be used in a 

safe environment for statistical purposes; provide a consistent policy in all statistical data centers for treatment of confidential statistical data under the Freedom of Information Act; permit the data 

sharing authorities of the Paperwork Reduction Act to work without compromising confidentiality; and provide a privacy sensitive 

alternative to the creation of universal data bases that different departments have proposed at one time or another to support their 

own policy interests. 

In short, the Statistical Confidentiality Act that we have put together permits the designated data centers and statistical agencies 

working with them to share both expertise and data resources in 

order to improve the quality and reduce the burden of statistical 

programs while preserving respondents’ privacy. Moreover, however the organizational boxes for the ideal Federal statistical system may be drawn, this bill will permit the components of the statistical system to manage their data as if they were a single, functionally integrated organization. The administration’s bill was 

transmitted to the Congress again on June 5 of this year, and we 

are eager to continue our work with you toward its introduction 

and passage. 

Third, there has been progress to enhance coordination and collaboration among the statistical agencies in other areas as well. 

Perhaps most notably, when Director Raines took the helm at OMB 

last summer, he made clear the importance of greater integration 

of statistical agencies as a priority for budget review; and, to that 

end, he held for the first time in 20 years, a formal Director’s crosscutting review of Federal statistical programs. This review served 

to identify a set of high-priority, cross-agency initiatives that would 

ameliorate the increasing inability of our statistical system to mirror the current economy and to foster accurate allocation of increasingly scarce Federal resources. 

4

In addition, Director Raines challenged statistical agencies to 

demonstrate further evidence of collaboration and to propose interagency initiatives that would address important national priorities. 

I am pleased to report that the agencies have accepted that challenge and identified several activities to further improve the overall 

performance and efficiency of the Federal statistical system, including addressing the significant statistical issues associated with improving the measurement of income and poverty; organizing our efforts to meet emerging welfare and health data needs; strengthening data on national and personal income; and managing the 

transition to the new North American Industry Classification System. These and other collaborative initiatives will more closely link 

the statistical agencies and address important national priorities. 

Mr. Chairman, the rest of my comments are set forth in my written statement; and I will not repeat them here. 

I would like to use this opportunity to stress the importance of 

enacting legislation that would permit limited sharing of data 

among the principal statistical agencies for statistical purposes. I 

cannot overemphasize how critical this effort is, regardless of what 

decisions may be made about reconfiguring the statistical agencies. 

I thank you, Mr. Chairman, for your patience; and I would be 

pleased to answer any questions you have. 

Mr. HORN. We thank you for that statement. 

[The prepared statement of Ms. Katzen follows:]

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Mr. HORN. What I would like to know is, with the Federal Statistical Confidentiality Order which took effect yesterday, July 28, 

1997, how much of the matter of limited sharing of data between 

agencies has been covered by that particular Executive order? 

Ms. KATZEN. It does not cover sharing, but sharing is one part 

of a two-part process. The inhibitions to sharing, whether they be 

legislative or administrative, to date have been concerned about 

how different agencies will treat confidential information. So before 

we got to sharing, we wanted to ensure that agencies would keep 

confidential information confidential in a consistent, governmentwide approach; and the order that I signed was designed, to that 

end, to establish a governmentwide set of standards, or set of practices to ensure confidentiality. 

With that in place, it seems to us that it is now easier to begin 

talking about sharing, since you know that, if you give data to one 

of the other agencies, these data will be treated with the confidentiality they deserve. 

Mr. HORN. As I read your testimony, this really related to carrying out the Paperwork Reduction Act of 1995. Am I wrong on 

what you are saying on page 1? 

Ms. KATZEN. We can use some of the authority under the PRA 

to do administratively the kinds of steps that we took in the order. 

So we used that authority to do administratively. 

In terms of sharing data, which would be the second step, that 

requires legislation; and that is why we have sought to work so 

closely with you. 

Mr. HORN. Give me an example of some of the data sharing that 

is needed, cannot be done now because it hasn’t been authorized 

by the Congress. Give me an example of what you are worried 

about here. What are you trying to achieve? 

Ms. WALLMAN. Do you want me to get into the act here? 

Mr. HORN. Fine. 

Ms. WALLMAN. There are a number of areas where we believe 

that progress could be made. The one that is best known to people, 

of course, has been the issue of lists or list frames for drawing samples, both for economic and other kinds of activities in the survey 

area. 

We also believe that there are areas where having agencies capable of sharing one another’s information could allow them to check 

out some quality issues that have become of increasing concern; but 

the agencies are currently, because of their current confidentiality 

laws, unable to undertake that sharing. 

There are other areas where we see new prospects that merely 

haven’t been examined previously given the history of the earlier 

legislation—areas in health, for example, where there are new opportunities for looking at issues related to industries that have 

health activities—health-related activities and hospitals that have 

health-related activities—a collage of activities—for example, benefits under these different programs. 

My colleagues, actually, from the Energy Information Administration and the National Center for Health Statistics will provide 

better examples when they talk, and we have a number of other 

examples. 

11

Ms. Katzen mentioned the work that the Interagency Council on 

Statistical Policy has been pursuing over the last several months. 

That initiative has come up with a fairly detailed list of opportunities that the agencies see; and, actually, that is what underscores 

our concern that we move forward on this legislation. Many of the 

opportunities for increasing the quality of information and restraining our costs at the same time lie in the passage of this legislation. 

Mr. HORN. Well, is the sharing provisions of that legislation adequate to what you are talking about here? Does that give you the 

authority if Congress were to pass it? 

Ms. WALLMAN. The legislation that we have proposed gives us 

the authority that is needed to carry out the kind of activities we 

are talking about, yes. 

Mr. HORN. Are there any agencies that are exempted from that? 

Ms. WALLMAN. The legislation actually works in the opposite direction, if you will. It empowers eight agencies to become statistical 

data centers. They are the core of the opportunity for sharing. In 

addition to that, other agencies would be able to work with the designated—excuse me, that comes from a historical part of my life—

the statistical data centers. 

So the opportunity is broader than the eight, but the eight are 

the ones that would be the centers of the activity. 

Mr. HORN. So, in other words, as you just suggested, the sharing 

could go beyond the eight with other Federal agencies. 

Ms. WALLMAN. With specific agreements with those agencies, 

yes, sir. 

Mr. HORN. Do you have the eight in front of you there? 

Ms. WALLMAN. I do have the eight in front of me. 

Mr. HORN. Would you mind reading it into the record? 

Ms. WALLMAN. I would be happy to. 

Mr. HORN. What groupings are we talking about? 

Ms. WALLMAN. We are speaking specifically about the Bureau of 

Economic Analysis, the Bureau of the Census——

Mr. HORN. Is that all one? Give it to me one, two, three, four. 

Ms. WALLMAN. I am going to enumerate eight. 

Mr. HORN. OK. Tell me when you move to two. 

Ms. WALLMAN. No. 1 was the Bureau of Economic Analysis. I am 

doing these in alphabetical order, I believe. No. 2 is the Bureau of 

the Census; No. 3, the Bureau of Labor Statistics; No. 4, the National Agricultural Statistics Service; No. 5, the National Center for 

Education Statistics; No. 6, the National Center for Health Statistics; No. 7—it is slightly more complicated—the Energy End Use 

and Integrated Statistics Division of the Energy Information Administration; and No. 8 is the Division of Science Resources Studies 

at the National Science Foundation. 

Mr. HORN. There are two obvious ones that are not there. Let me 

raise them. One is Social Security and the other is Immigration 

and Naturalization Service. 

We have legislation in which would provide access, if they wish 

to, to chief State election officers, to county registrars of voters, if 

they are checking whether a person is a citizen of the United 

States. Since 1982, my understanding is that the Social Security 

Administration asks for documentation of citizenship. 

12

Go ahead, if you want to take Ms. Katzen’s advice. I will stop 

there and get to the next one. 

So why wasn’t Social Security included? This is a basic resource, 

and it isn’t a matter of revealing one’s amount that they are paid 

or anything else, but we also have the problem of hunting for deadbeat dads. 

Ms. KATZEN. The comment I was offering to her is that there are 

two different—they are not totally unrelated and not mutually exclusive, but there are two quite different areas that you can be 

talking about when you talk about sharing information. 

On the one hand, what we have been talking about to date and 

the reason the eight agencies were selected and what is reflected 

in our proposed legislation goes to the sharing of statistical information for statistical purposes. And that is, as we were mentioning 

the other day, we are talking about aggregate information and the 

ability to share information among those agencies that enable you 

to do basically two things: 

One is to check the quality of the data that you have. Again, on 

an aggregate basis, individual personal identifiers are irrelevant. 

You are verifying the quality of the data. 

The second purpose is to reduce respondent burden. In some instances persons will be responding to surveys twice, three times, or 

four times: if those to whom they are responding could share the 

data, we could minimize the burden on respondents. That is not 

just an end in itself, but that would then presumably heighten the 

respondents willingness to respond and that would provide us more 

timely and more accurate information. All of that is on a statistical 

information platform, if I could call it that. 

On the other hand, the references that you have made to Social 

Security, to INS, and indeed even to IRS go to individual data for 

individual personally identified persons or entities. That kind of information can be used, if it were available and for the most part 

it is not because of statutory restraints to check for eligibility for 

benefits, to check for appropriateness of citizenship status or other 

types of programmatic administrative or enforcement efforts that 

are not necessarily aggregate information, but individually based 

information. 

That type of sharing, which you can have under the Computer 

Matching Security Act, for example, and issues that are not the 

thrust of the confidentiality—I am sorry, the statistical data centers that we are seeking to establish here. The sharing of data that 

we have been talking about is the sharing of aggregate statistical 

information. 

As I said, these two areas are not necessarily mutually exclusive. 

In fact, there are people in my office who are looking to expand 

areas where individualized data can, in fact, be shared. But that 

is a separate issue from the issue that has driven the discussion 

so far about enhancing the effectiveness of the statistical agencies 

which are developing statistical information for statistical purposes. 

Mr. HORN. Well, you are talking about having accurate and adequate statistical information. It seems to me one way you do that, 

if you are worried about socioeconomic class, is you find out what 

the income was for those that answered the BLS bread basket 

13

questions. You see if they are eating certain lines of food or certain 

purchases out in the market beyond food, is there a relationship, 

obviously, between income. And you would have accurate income 

data then if you could run the tape of those interviewed against 

what they file for income. So that is a socioeconomic class usage. 

You can do the same with the health center. Maybe it is just too 

obvious that socioeconomic class, some people there with certain 

diseases and certain types of psychological whatevers, have it more 

than another socioeconomic class. So you can use that individual 

data. 

Ms. KATZEN. Absolutely. 

Mr. HORN. It isn’t just a statistical problem on the board. It is 

the reliability of the government’s statistics, which some of us have 

real doubts about, by the way, because we wonder why they do not 

do that. 

To finish with the Immigration and Naturalization Service, obviously one way to check citizenship on voting—and I would hope the 

administration would agree that the sanctity of the ballot box—is 

something that all parties ought to agree about, that you want only 

citizens voting. I would hope the administration would take that 

view. 

If they do, then we need to know the citizenship information held 

by Social Security and we need to know the natu- ralization information. So a person can be made eligible to vote through the naturalization process, and we ought to be encouraging that. 

Ms. KATZEN. I am not saying that it is not desirable to be able 

to link those data bases and provide that information. I am saying 

that is a different subject than determining how many in the aggregate of one socioeconomic class or another—how many have how 

much income, or what type of health problems, what type of other 

types of issues, is very different from saying you are going to track 

a particular person through various data bases. 

That was the only distinction I was making. The two are not mutually exclusive, and to my mind there is enormous benefit to be 

derived from the linking of those types of data bases for the checking and cross-checking purposes. There are costs to that which are 

very significant. 

If you go anywhere near the IRS data base, there is a very strong 

wall that is built; and that is done because tax forms are filed, in 

effect, voluntarily. If people feel their tax information will be used 

to their detriment without their knowledge, there may be an adverse effect on the response rate, which conceivably could be very 

significant. 

So those kind of issues I think are very real. I am not saying 

they are dispositive or they are not worthy of consideration. I am 

just saying they are a different type of issue than what we have 

been focusing on in the preparation of our proposed legislation. We 

are working in the other arena as well, but they are two different 

arenas. That was the only point I wanted to make. 

Mr. HORN. As to the walls within the Immigration and Naturalization Service, let’s say, we find for some people those walls are 

easily broken down and we will be checking that. One subcommittee has already. Some people get lists of naturalized citizens, and 

14

the other people don’t get lists of naturalized citizens. So you could 

even write them a congratulatory letter. But it seems to me they make various decisions that don’t necessarily apply to all of us, just some of us. So I am curious about 

that, and another Subcommittee on National Security is probably 

examining that one. Well, what do you think about the commission proposal that was 

outlined? I am sure you are familiar with it. Senator Moynihan introduced it. He and I agreed we will try to work something out, 

that this commission would perhaps come up almost like a base 

closure commission, after taking a lot of testimony, and come in 

with a plan on the integration; and we either vote it up or down, 

one way or another. That is sort of a popular device around here 

on controversial things that we otherwise don’t put our fingers on. So whether that would be the outcome, it is hard to say. We don’t 

know what the commission might do. But have you thought 

through some options of what a commission might do and what its 

agenda should be? We are searching for ideas, in brief. You have always had good 

ideas. So what are they? Ms. KATZEN. When I appeared last time before your committee, 

we spent a lot of time talking about the costs and the benefits of 

rearranging the boxes, and I think a lot of work has gone into 

thinking about those issues. The benefits are fairly obvious; the disadvantages are less so, but 

nonetheless real. A commission might be able to approach it with 

bipartisan, professional individuals of stature committed to the 

same common goals and shed more light on the issue. We know that a lot of work has been done in the past, and that 

undoubtedly more work will be done in the future. Our attempt has 

been to try to make the most effective, efficient use of the resources 

that we have and, within the constraints that are established by 

the shape of the executive branch, once by the organization of the 

Congress in terms of different committees with different jurisdictions, to try to weld this group together in a way that is going to 

maximize the benefits.

Any help that can be given to that effort, any support for our initiatives, would be greatly appreciated. And therefore I would hope, 

if a commission were formed, it would think not just about rearranging the boxes, but also whether, short of reorganization, there 

are important steps that can be taken to enhance the accuracy, 

timeliness, and reliability of statistical information. The items that I identified in my written statement and my oral 

statement that we have undertaken are, I think, very good prospects. We can use all the help we can get in terms of support. And 

I am sure we do not have all of the answers. I am not even sure 

we’d know all of the questions.

So bright minds focused on this issue could be highly desirable.

Mr. HORN. On that point, you mentioned timeliness of data. Are 

there particular concerns in terms of the timeliness related to decisionmaking that any administration has to make? Or what is your 

feeling on that?

Ms. KATZEN. Statistical information is used not just by

decisionmakers within the government, but also by those in the

15

private sector. They run from very large and much anticipated announcements of unemployment increases and decreases, or GDP 

numbers, to more focused, specific—sometimes sector-specific, 

sometimes geographic-specific—types of data. 

In some instances, there have been criticisms in the trade press 

and in the general press of whether they are able to—notwithstanding all of our computer power, whether we are able to gather 

the information necessary, to make it available, particularly to the 

private sector as well as the public sector, on a timely basis. 

Mr. HORN. Director Raines, when he asked for the crosscutting 

study and the analysis, has that come in yet? 

Ms. KATZEN. Yes, we did that—time flies when you are having 

fun; it was last October, in anticipation of the fiscal year 1998 

budget. There is an annual budget review, a Director’s review, preceding the formulation of the President’s budget each year. 

Traditionally, they have gone area by area as set forth in the 

President’s budget. This year, Director Raines called for the inclusion in that process. It was actually October or November, he included a crosscutting review for the statistical agencies; and Ms. 

Wallman and I appeared at the Director’s review with a series of 

proposals that we thought would enhance the effectiveness of the 

statistical agencies, looking for proposals that were not solely based 

in one agency but that would be able to assist a number of agencies. I have identified some of those in my written testimony. 

The last one that I mentioned, for example, has to do with enhancing the use of information for the Government Performance 

and Results Act. We are looking for outcome measures from the 

various agencies as part of the new management approach that I 

think is extraordinarily important and productive for the executive 

branch; and the ability of agencies to provide the information that 

is necessary to make that work is one that no single agency would 

want to devote its particular resources from its statistical agency 

to that effort. But as a crosscutting matter, this is something where 

relatively few dollars could go a very, very long way to everyone’s 

benefit. 

There are a number of other areas that we identified that involved different issues that we thought were very important. Some 

of those I remember were located in BLS, one of them having to 

do with the CPI and the additional work that was appropriate in 

that area that Congress has identified and the executive branch 

has identified and we wanted to support; moving to the North 

American Industry Classification System, implementing that, 

which would assist a number of different agencies. We identified 

five or six different initiatives, and the Director was very positive 

and responsive and approving of our proposals. 

Since then, Ms. Wallman has gone back to the Interagency Council and said, for this year’s crosscutting review, why don’t you all 

help us formulate the initiatives and proposals to present to the Director? They have been very responsive and enthusiastic about 

that, and I expect this October or November we will have a bigger 

and better menu to choose from. 

Mr. HORN. Any comment, Ms. Wallman? 

Ms. WALLMAN. No. Ms. Katzen has it just right. 

16

I think the distinction she was trying to draw at the close of her 

remarks was that much of what was done in the fiscal 1998 budget 

was done internally within the Office of Management and Budget, 

based on knowledge of the staff over the years. The activity that 

is about to come to completion this year toward fiscal 1999 and the 

future—it is not just a 1-year effort—I think I would underscore 

that—that that has been done in a much more outgoing way, if you 

will, with the agencies that form the Interagency Council on Statistical Policy, the 14, and that has helped us identify a broader, richer set of activities, some of which could start immediately, some of 

which we need to put some more thinking into, frankly, before we 

would come forward with specific proposals in a budgetary sense. 

The third group of activities, I underscore again, includes things 

that would be available under sharing capabilities we don’t now 

have. 

Mr. HORN. When the crosscutting study was done, I take it was 

strictly OMB people on that, or were agency people also on that review? 

Ms. KATZEN. Last year it was an internal OMB meeting. 

Mr. HORN. I gathered it was just OMB. 

Ms. KATZEN. This year we expect to have more input, although 

all Director’s reviews are internal only, for each of the departments 

and agencies. OMB staff presents the outstanding issues to the Director. 

Mr. HORN. Can we get a copy of that review to see what the recommendations were? 

Ms. KATZEN. I will be happy to look into that. 

Mr. HORN. Look into it. We will put it at this point in the record. 

If they don’t want it public, we will work out something. I would 

just like to see what some of the thinking is. 

[The information referred to follows:]

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Mr. HORN. The Interagency Council, is that established by Executive order essentially? 

Ms. KATZEN. It was established originally—or a variation of it 

was established originally—by our office, but it was, in effect, codified in the Paperwork Reduction Act of 1995, which gave it a congressional imprimatur and a formal name. Ms. Wallman is the 

chair of that organization. 

Mr. HORN. The 14 include you, Ms. Wallman, or are they in addition to you? 

Ms. WALLMAN. They are agencies, and I am the chair ex officio. 

Mr. HORN. Sure. So the 14 essentially recognize the major statistical agencies in the executive branch? 

Ms. WALLMAN. Yes. 

Mr. HORN. Should it be larger than that? Are there others that 

have their feelings hurt? What are a few more seats at the table? 

Ms. WALLMAN. If I might, the eight I enumerated for you in 

terms of the Statistical Confidentiality Act are indeed the first 

eight in that group. There were four more that were added actually 

by my predecessor in this position. And we have, in fact, entertained petitions, if you will, from agencies that particularly wish to 

be members and sit at this table; and we have embraced a couple 

of additional agencies on that basis. 

The legislation that the Congress passed in 1995 also suggested 

that we include on a rotating basis the heads of some of the smaller agencies. In effect, we have been doing that in adding the extra 

agencies we have embraced already and would certainly be willing 

to entertain others. Most recently, we brought in the Social Security Administration’s office responsible for statistics. 

Mr. HORN. Are they smitten by their title or function within the 

agencies, or does the Administrator simply appoint them? 

Ms. WALLMAN. The members are the heads of the agencies themselves. Dr. Hakes and Dr. Sondik, who will join you shortly, are the 

heads of their respective agencies and sit at the Council table. 

Mr. HORN. Let me ask you one question. I will then call on Mr. 

Sununu. 

I understand from your testimony that under the administration’s statistics 2000 initiatives, private respondents, individuals 

and businesses could save tens of millions of dollars in compliance 

costs and reduced burden hours from filling out Federal Government surveys. Are there any estimates of the burden hours that 

could be saved as a result of the administration’s data sharing proposal? Do you have an estimate on that? And how did you find out 

what that burden-sharing was? 

Ms. WALLMAN. No, we do not have a specific estimate at this 

point of respondent burden hours that would be saved. 

I think that, in all fairness, the only place we could probably 

come even close at this point on giving you some estimates would 

be in the area of developing sampling frames. 

Some of the other opportunities that I mentioned briefly and that 

my colleagues may mention in more detail in a few minutes are 

new proposals where we really don’t have a good base of prior experience to give you a very firm estimate, but it is the kind of thing 

we would hope to look into when this becomes a reality. 

23

Mr. HORN. Well, we would like to hear about that. Because, obviously, everybody that ever walks into a small business, a large 

business or a farm, they all hear about Federal paperwork and surveys, no matter how useful some of that might be. 

I recall in the Roosevelt administration Secretary of Agriculture 

Wallace went out visiting some farmers. When he came back, he 

was livid at all of the forms his own agency was sending to farmers; and that is when he invested in a fairly sophisticated statistical operation in the Second World War. So it is not a new problem. It is an old problem. 

Of course, that is why old BOB, and now OMB, your job is to 

clear statistical surveys; and, hopefully, that burden thing is somewhere in the mind and we can say do we really need to know this 

when somebody has a great idea. It might make a terrific doctoral 

dissertation, but do we need to burden the American people with 

that? 

Ms. KATZEN. The burden is very much in the forefront of our 

mind. 

Mr. HORN. How many requests do you get a year from departments, a ball-park total, or file it for the record if you want. 

Ms. KATZEN. I will be happy to provide a general statement. 

[The information referred to follows:]

Over the past ten years, we have received between 2500 and 3500 requests for 

information collection approvals annually. These totals include all types of collections—those required to carry out regulations and to administer benefit programs, 

as well as statistical surveys.

Ms. KATZEN. A wide variety of information collection requests 

that we receive, whether it be for statistical agencies per se, we 

have now again—as part of the GPRA approach, we have a series 

of departments and agencies who are interested in sending out 

something which might be considered customer service surveys to 

find out whether the department or agency is, in fact, serving the 

needs of the constituent interests. 

That is a very different type. Some of those are on a voluntary 

basis. They still would be counted under the Paperwork Reduction 

Act. We would still look at those to ensure that not only the burden 

is kept to a minimum, but they are structured in a way to produce 

accurate, responsible information. 

Then you have a lot of other types of information collections, 

ranging from tax forms to applications for passports, applications 

for loans from the SBA, or from an educational student loan. Each 

of these is called an information collection request, and they all 

come through our office, and they are very different kinds of animals. 

Mr. HORN. I would hope, since we are trying to get results under 

the Government Results Performance Act, that those surveys, if 

they make some sense, are just good public policy. I think they are 

useful in one agency head or more in fulfilling that law which we 

feel very keenly about. So I would hope those are not dumped. And 

if they are not very well-designed, then I would hope the administration or OMB would just redesign them. 

Ms. KATZEN. We are actually working toward that. We have a generic clearance process to enable us to quickly approve certain 

types of forms; and where there are issues spotted, Ms. Wallman’s 

24

able staff has been of assistance to the departments and agencies 

to redesign them so that the resulting information is more valuable. 

Mr. HORN. How many survey requests do you turn down in the 

average year? 

Ms. KATZEN. I would have to get you that information. 

Mr. HORN. Could you, please? 

[The information referred to follows:]

In 1996, we received a total of 2433 requests for information collection approvals. 

Of those, 19 ultimately were disapproved. Details on the submissions and disapproval’s by department were as follows:

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Ms. KATZEN. Our objective is not to turn them down but rather 

to enhance their utility or point the department or agency to another place where they could get that kind of data without having 

to conduct their own survey. It is therefore a false measure to say, 

if we turn a certain amount down, it says something about either 

how careful or how creative we are being. 

Mr. HORN. Well, we will save a little place in the record for that 

exhibit. I would be interested, as stupid as I am sure it is, to see 

how many you turn down and say this shall not pass the gate. 

If it makes sense to share data, which you are into sharing data, 

to get more cooperation between agencies through data sharing, 

why not go one step further and just combine agencies? How do 

you feel about that? 

Ms. KATZEN. As I mentioned to you the last time I testified, there 

may be certain benefits of efficiency of operation, although those 

would be more long-term, and in the short-term there is enormous 

disruption from moving agencies around. We have seen this in 

other areas of reorganization within the executive branch. 

In addition, as many in business have discovered with their R&D 

projects, for example, it is very different to have a centralized R&D 

office and R&D groups that are located in the heart of a product 

manufacturing area or service provision area, so that the R&D is 

actually tied to the products or services rendered. Using that analogy in the statistical agencies, it is clear that in addition to several 

major statistical agencies, there are a number of—I don’t want to 

call them minor—but less major agencies in each of the departments that are responsive to the programmatic needs of that department. 

If one consolidated all of the major statistical agencies and each 

of the small pieces of statistical agencies found in the executive 

branch, there is, to my mind, a very strong likelihood that what 

would be created would not be responsive to the needs of the Department of Education or to the Department of Agriculture or the 

Department of the Interior; and those Departments would then, in 

effect, recreate to meet their own needs certain information-gathering processes. 

There is, of course, a distinction between the collection of information and the analysis and the application of that information. 

Those are three different steps. But once one speaks about consolidating, one has to think about the uses of information. That is why 

I said earlier I think it is a more complicated question than just 

taking an organization chart and moving a bunch of boxes around. 

And the agencies in many instances, have well served their departments and in turn have been enhanced in their approach to collection by being located in a department or agency that has a particular programmatic jurisdiction or objective. It can go either way, 

functional or programmatic. 

So my own view, as I expressed last year, was that I thought it 

would be more productive to form a, if I can use the term, ‘‘virtual’’ 

or functionally integrated statistical system from the existing decentralized system and not try to centralize it all. 

My experience in the past year, particularly with the efforts that 

Director Raines undertook, that Ms. Wallman has done with the 

Interagency Council, has reinforced that view, that we can make 

27

the decentralized system work more effectively, more efficiently, 

and we do not need to centralize it. 

Mr. HORN. On that note, I will yield to the gentleman from New 

Hampshire for as long as he likes, Mr. Sununu. 

Mr. SUNUNU. Thank you, Mr. Chairman. I have only one focus 

question, and that is on the issue of the States’ interaction and the 

States’ relationship to any data sharing that might occur. 

I would imagine a number of government surveys rely on State 

and local governments for data collection and that these collections 

would have certain confidentiality restrictions associated with 

them. With the data sharing legislation that you have been discussing, what would be the effect on the States doing the collection 

and what kinds of confidentiality agreements that would be in 

place might hinder the data sharing once it gets to a particular 

agency? 

Ms. KATZEN. Well, I think there are three types of possibilities, 

and that is State information, which is then shared with the Federal Government; Federal information, which is shared with the 

States; and sharing among the States. Each raises different kinds 

of issues. 

With respect to State information that is given to the Federal 

Government, I think that with the confidentiality order that is in 

place now and the action that will be taken following on the heels 

of the effective date of that order, I expect that information that 

the States give to the Federal Government would be treated with 

confidentiality and that we could so persuade the States of the confidential treatment that will be afforded to that information so as 

to minimize, if not eliminate, the concerns that they may have from 

their respondents. 

Mr. SUNUNU. Would that simply require a rewriting of the confidentiality agreements to include all of the agencies involved in 

the data sharing agreement? 

Ms. KATZEN. To some extent, many of those are already covered 

by the order that is in place. If there were others that would be 

affected, new agreements probably would have to be crafted. Although, as I indicated, the standards set out and the processes set 

forth in our order are ones which we hope other statistical agencies 

will aspire to meet, and that would solve that problem. 

With respect to sharing of Federal information with the States, 

that is a bit more problematic in that some of the States do not 

have the experience with what we call the functional separation 

principles that have often been at the heart of the discussions of 

these kinds of issues in which you are separating out statistical information for statistical purposes from the use of statistical information for programmatic, administrative, or enforcement purposes. 

If that functional separation principle is in place and followed, 

then there would be less concern with sharing Federal information 

with the States or among the States. All of this would depend in 

part upon the legislation that we have proposed. In fact, it depends 

in large part on the type of legislation we have proposed, because 

virtually all of the agencies and departments have existing provisions that preclude such sharing, and we would have to legislate 

that matter before we even begin to think in terms of contractual 

agreements to that end. 

28

Mr. SUNUNU. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. HORN. I thank the gentleman. 

Let’s now take a look at a few other areas. Let’s discuss the dissemination of Federal Government statistical products. 

Where do we stand on creating a single point of access to the 

Federal Government information? 

Ms. KATZEN. We stand beautifully. Several months ago we initiated Fedstats, which is a website that would enable someone who 

does not know ahead of time where information is deposited to access information in a variety of different ways. You can do it by 

topic, alphabetically, there is a finder’s guide that shows different 

topics. You can do it thematically, and there are other types of 

user-friendly tools. 

Once you accessed the system and we showed how you did not 

need to know in advance whether automobile accidents by persons 

during working hours, was it BLS or Department of Transportation, you could just get the information. And once you got on to 

that, it would take you directly to the home page of the agency that 

had the information and cross-linked to a number of the other 

agencies. 

We got extraordinarily positive response, in addition to a lot of 

what they called hits on Fedstats when it first went up, and it has 

continued since then. We were chosen for a particular commendation by a number of the trade press, site of the week, site of the 

month, latest, greatest breaking events in town type commendations and awards. 

We have continued to watch that and are continuing to build 

that; and our objective is to have all 70 agencies up there with 

their information. This is something which, as you know, the Office 

of Information and Regulatory Affairs takes very seriously the responsibilities to disseminate government information. It is, in fact, 

a national resource and asset; and the American people should 

have access to it in the most user-friendly way possible. 

Mr. HORN. Is it correct that the Bureau of the Census plans to 

put the year 2000 census on the Internet? 

Ms. WALLMAN. I guess——

Mr. HORN. As Chief Statistician of the United States——

Ms. WALLMAN. Who didn’t know the answers this morning. I 

guess I was trying to better understand your question, Mr. Horn. 

If you mean the results of the census, the kinds of information that 

have previously——

Mr. HORN. I mean the results, once you get them. 

Ms. WALLMAN. You are speaking of aggregate information again? 

Or information that can be released pending assurance of the confidentiality of the information? 

Mr. HORN. I am talking about simply the normal census which 

we now have in libraries. 

Ms. WALLMAN. Yes, sir. The answer is yes. 

Mr. HORN. Now, if you do that, are you also going to publish it 

in normal book form? 

Ms. KATZEN. This has been an ongoing discussion we have had. 

Under Circular A–130, which is the bible for information dissemination, our position is we are clearly entering an electronic age, 

29

and information should be made electronically. But that does not 

mean that everybody has a computer or a website or modem, and 

that paper-based products remain a very important part of our law 

and literature and life in this country. 

One of the issues that we are grappling with is ensuring that the 

depository libraries, who receive many of these products, continue 

to have their shelves restocked, both electronically and in paper, as 

we sort through these kinds of issues. This has been an ongoing 

discussion that has had to do with the Government Printing Office 

and the printing policy and title 44 of the U.S. Code that we are 

involved in, even as we speak and at present I think are very challenging but great opportunities for us all. 

Mr. HORN. Well, I think you are absolutely correct on that, and 

I am not undecided on that question that we do need both. And it 

might change 20, 40 years from now; but, certainly for the depositories, I think it is needed to continue those series so the people 

that do not work the Internet, fine, although I am sure that some 

people will say all 5 years old and up over the next 50 years will 

have them appended to their body and carry around the key. But 

we haven’t gotten there yet. So I am glad to hear rationality still 

prevails in this area. 

Let’s see, do we have anything else we want to talk about? I 

think that is about it. If we find something that we wish we had 

asked and didn’t, I know you are good enough to answer the question or have 60 people answer it, and you will at least clear it. So 

that is what we are going to work out. 

Sorry to keep you so long on the stand. Sorry I was a little late. 

But I think we are getting there. 

Thank you both for your help, as usual. 

OK, we now have our next panel, panel II: Edward J. Sondik, Director, National Center for Health Statistics; Jay Hakes, Administrator, Energy Information Administration, Department of Energy; 

Everett Ehrlich, former Under Secretary for Economic Affairs, Department of Commerce, Clinton administration, ESC Corp.; Mark 

Wilson, Rebecca Lukens fellow in labor policy, Heritage Foundation; Mary Susan Vickers, research director, Interstate Conference 

of Employment Security Agencies, Inc. 

Welcome to all of you. 

As you have gathered, since this is a Government Reform and 

Oversight Committee, we do ask you to take the oath when you 

testify. 

[Witnesses sworn.] 

Mr. HORN. The clerk will note that all five witnesses have affirmed, and I think we will just go down the line with Mr. Sondik 

at this side and work our way down. So the Director of the National Center for Health Statistics. 

30

STATEMENTS OF EDWARD J. SONDIK, DIRECTOR, NATIONAL 

CENTER FOR HEALTH STATISTICS; JAY HAKES, ADMINISTRATOR, ENERGY INFORMATION ADMINISTRATION, DEPARTMENT OF ENERGY; EVERETT EHRLICH, FORMER 

UNDER SECRETARY FOR ECONOMIC AFFAIRS, DEPARTMENT 

OF COMMERCE, CLINTON ADMINISTRATION, ESC CORP.; 

MARK WILSON, REBECCA LUKENS FELLOW IN LABOR POLICY, HERITAGE FOUNDATION; AND MARY SUSAN VICKERS, 

RESEARCH DIRECTOR, INTERSTATE CONFERENCE OF EMPLOYMENT SECURITY AGENCIES, INC. 

Dr. SONDIK. Thank you very much, Mr. Chairman. 

Protecting confidentiality is a fundamental value at NCHS and 

in all statistical agencies. It is impossible to overstate its importance. 

We also recognize that we have a responsibility to respond to the 

taxpayers to maximize the use of their data. We continue to develop new approaches to making data available and the detail 

needed without compromising our responsibility to avoid disclosures about individuals. 

I am pleased that the subcommittee is considering perhaps the 

most important of these approaches, data sharing. I would like, 

first, to address briefly two related topics: coordination within our 

departments and across the statistical system. 

Within our departments, we Federal statistical agencies work 

closely with programs, subject matter specialists, and policy-related 

offices. As NCHS Director and Senior Adviser to the Secretary, I 

work with the HHS Data Council to integrate the department’s statistical efforts and bring a strategic focus to our information needs. 

Each of the statistical agencies also has a distinct role in coordinating statistical efforts across departments. I have been impressed 

by the agencies ideas and actions for coordinating our efforts, promoting system-wide efficiency and minimizing duplication. The 

strength of this decentralized system is that it allows relevance by 

keeping data close to its use. This makes for a solid foundation that 

allows us to tap into each other’s unique expertise, resources, and 

technologies. It also enables us to serve multiple purposes—at the 

macro level, with national economic and social indicators, and at 

the micro or program level, where data is critical to the operation 

and accountability of innumerable Federal programs. 

Data sharing is important to many of the most important interagency initiatives. It can only be accomplished with legislative 

changes proposed by the administration and introduced by you and 

cosponsored by Representative Maloney of the 104th Congress. 

Many of the confidentiality statutes currently in place were written narrowly to address statistical agencies on a one-by-one basis 

rather than apply to the system as a whole. As the agencies have 

evolved, efficiencies and analytic benefits could result from greater 

flexibility. 

Indeed, our efforts are increasingly interrelated with the other 

agencies. For example, with health at 13.6 percent of the gross domestic product, there is a considerable confluence of interest, you 

might say, between NCHS and its counterparts in economic statistics. 

31

In my written statement I have included several examples of how 

data sharing authority could be used to improve the design and 

sampling of our population, business and health care organization 

surveys, and to establish joint research data centers. Data sharing, 

for example, could foster the development of new longitudinal studies of children that would begin at birth and address the interaction of child health, education, development and so forth. With 

data sharing, NCHS and the National Center for Education Statistics could more readily collaborate on such efficient multipurpose 

studies. 

Regarding scope, I believe that data sharing should not be limited to just three agencies, the three involved with the greatest involvement in economics; and I have three reasons. First, as I noted, 

there is a growing confluence of interest in the subject matter addressed by all of the agencies. Second, the scope of coverage of BLS 

and Census make the agencies’ resources—their comprehensive 

sampling frames, for example—of particular use to us at NCHS 

and other smaller agencies. Third, a limitation would simply not 

support collaboration between the smaller agencies such as the 

child health education example I described. 

Before closing, I want to comment briefly on another aspect of 

confidentiality, the privacy of medical records. The lack of uniform 

privacy protections in a new era of electronic medical records poses 

major potential risks to individuals. 

As mandated by the Health Insurance Portability and Accountability Act of 1996, HHS is nearing the end of a review of privacy 

protection. The Secretary will make recommendations for privacy 

legislation at the end of August. The implications of legislation in 

this area are important, both in providing for the protection of individuals and in providing for important statistical research and public health uses of medical information. Indeed, advances in biomedical research, the detection and control of disease, and in our 

health care system often derive from the aggregation of individual 

medical records. 

In closing, I want to reemphasize the importance of achieving 

dual objectives, assuring privacy protection, and assuring we maintain our ability to provide answers to important health questions 

through carefully controlled access to medical records. 

I am looking forward to working with the subcommittee as it considers the Secretary’s recommendations; and, again, I thank you for 

the opportunity to discuss all of these issues; and I would be 

pleased to answer any questions. Thank you. 

Mr. HORN. We are most grateful for your testimony. 

There has been a bill that the subcommittee has worked on in 

both Democratic and Republican Congresses on the confidentiality 

of records. I would like to have the staff make sure that you and 

your staff have looked at it. Some in HHS have been advising us. 

I don’t know if it is your direct staff. I would like to have your 

input. 

[The prepared statement of Dr. Sondik follows:]

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Mr. HORN. Our next witness is Jay Hakes—am I pronouncing it 

right—Administrator, Energy Information Administration, Department of Energy. Welcome. 

Mr. HAKES. Thank you, Mr. Chairman. 

In addition to serving in the Administrator’s position at the Energy Information Administration, I also serve on the Interagency 

Council on Statistical Policy; and I think during the relatively 

short period it has been a statutorily authorized body, it has accomplished quite a bit. 

The website that was mentioned in earlier testimony is a very 

substantial contribution to improving access to information. I 

would say a high school student in California today probably has 

better access to Federal statistics than many top analysts here in 

Washington had 2 or 3 years ago. I think that is a substantial 

achievement. 

Today we are looking at opportunities for data sharing which do 

have potential to reduce costs, improve quality, and reduce respondent burden. We feel that part of this is a management challenge. All of us have to sort of work on this and make it happen. 

But we feel that it will require removing the barrier of different 

standards of confidentiality. 

Different agencies are authorized to protect data under different 

statutes. The Energy Information Administration is, in some ways, 

kind of the poster child for confidentiality problems, because we 

have very weak statutes governing confidentiality; and, therefore, 

we have even more problems than other statistical agencies in getting access to information that we need. 

We view this bill’s provisions on confidentiality very helpful, and 

we feel that there will be real benefits. In my written testimony I 

just referred to three types of benefits. One is, if we can share the 

frames from which samples are drawn, there is a lot of efficiencies 

to be gained from that. Second, when there are discrepancies in 

data, we can get into the individual respondent level and identify 

the causes of those discrepancies. I think that is very important. 

Third, when a new question comes along, we don’t have to develop 

a new set of data. We can often use the data we already have. 

I think the Bureau of Economic Analysis makes a number of 

good points about how it can use existing data. We have one example at the Energy Information Administration. We actually have 

many, but I know there is an interest in seeing how this works in 

the concrete world. We go out every 4 years and survey residential 

energy customers. We are interested in things like: are they using 

double or triple pane windows, what percentage of the square footage is heated, how many showers do they have installed. We have 

a sample of about 6,000 people, which doesn’t give us State-level 

data, but gives us regional data at a national level. 

It would make a lot of sense for us to use the census information 

as the frame for that study, but we cannot do so under the current 

situation. It forces us to make a lot of compromises. It costs us 

more money, it has an adverse effect on quality, and, in this case, 

there is a little bit more respondent burden, although I think in 

this case that is not as big of an issue. There is some real, practical, quality enhancements that would come if we could share data 

with census. 

41

Then just one other example occurs that may stimulate your interest. When I was talking with Steve Landefeld last week, the Director of the Bureau of Economic Analysis, he mentioned that in 

the 1980’s there was a lot of interest in the Congress in foreign direct investment, and the Congress couldn’t get the type of statistics 

that it wanted. There was one proposal that BEA or somebody go 

out and collect a whole new data series. What the Congress did at 

that time was, in the Foreign Direct Investment Act, took care of 

the confidentiality problem, so new data series were created without having to collect new data. 

Although that effort has lapsed a little bit in recent years as interest in that area has dropped, I think it shows that legislation 

in this area can make a difference. There are real savings that can 

be realized, and we look forward to working with you to expand 

these opportunities. 

Mr. HORN. That is very helpful comment. That might be an interesting model to see what really happened there. 

[The prepared statement of Mr. Hakes follows:]

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Mr. HORN. Mr. Ehrlich, we are glad to see you again. You testified last year when you were still at the Commerce Department. 

It is nice to have you back. 

So, Mr. Ehrlich is former Under Secretary for Economic Affairs, 

and I take it you are now with the ESC Corp. 

Mr. EHRLICH. That is right. 

Mr. HORN. Based in Washington? 

Mr. EHRLICH. Here in Washington. 

Mr. HORN. We are glad to have your views. 

Mr. EHRLICH. I appreciate that, Mr. Chairman. I appreciate the 

opportunity to be here, and it gives me an opportunity to thank you 

for your role and your constructive assistance during my tenure in 

the previous 4 years, which were very much appreciated. I learned 

as Under Secretary to treasure the friends you had, and I did. 

Let me respond to, or amplify on one or two other points that 

had been made, particularly those you asked of the previous panel. 

In 1993, when I first arrived at Commerce, I asked the leading 

economic survey managers at Census, BEA, and BLS, which was 

then under the direction of Acting Director Bill Barron, to put together a list of efforts that they could pursue if they weren’t obstructed by the obstacles that this bill would remove. 

That group was called the Mesenbourg Commission after Tom 

Mesenbourg, who was the Associate Director at Census for Economic Programs. It gave estimates in their report. They listed 40 

initiatives with the burden hours that would be saved if those were 

to be implemented. 

I don’t have a copy of it with me today, but it is an official Census document, and it would be available to your staff. Particularly 

in the area of the business register, which is the largest area of duplication between Census and BLS, the savings could be in the tens 

of millions of dollars in private sector burden reduction. 

My colleague, Mr. Hakes, also made the point about BEA and 

BLS sharing data in the link project, which allowed us to look at 

the characteristics of plants that were owned by foreign affiliated 

capital. That was extraordinarily productive and another good example of what might be done. 

Data sharing legislation is good and long overdue, and the movement to a virtual agency is also long overdue. But, as I am fond 

of saying, virtual is nineties speak for ‘‘not.’’

There are still remaining opportunities to pursue aggressive coordination, and I think for that reason the Congress should still 

consider the various dimensions of the consolidation issue as it 

works through this legislative vehicle. 

I think it is important to keep in mind as we pursue these coordination efforts, including consolidation, that the goal has to be a 

better statistical product. I think you will find that the cash savings are extraordinarily low, that the level of purely duplicative 

work is very low, but we do have the opportunity through greater 

coordination—if not outright consolidation—to pursue a variety of 

goals. We have the ability to set national statistical priorities. 

Ms. Katzen, in the earlier panel, talked about the problem of 

agencies wanting to have model or sectoral data to answer their 

own policy problems. Well, a consolidated or much more highly coordinated system would give us the opportunity to talk about 

45

whether that data was really a national statistical priority or if it 

should be funded by the agency out of its own resources. Consolidation would also allow far greater competition among the different 

modal types of statistical gathering because congressional patrons 

and departmental champions and constituents wouldn’t be able to 

segment the system in its appropriation. The consolidated agency 

would also allow us to realize new opportunities. Mr. Hakes talked 

about some of those. 

One that we were trying to pursue when I left Commerce was 

getting Census and BLS to get the same data set for retail sales 

and for consumer price information using bar codes. That had a variety of difficulties, some of which would be solved by statistical 

data sharing legislation, but some require simply a far higher level 

of management attention that is unclear to me that the current 

system can provide. 

I am concerned that we are moving toward a consolidated agency 

that would be independent in the administrative sense of the word. 

That is, we put economists together and send them out to Rockville, Springfield, Morgantown, Suitland, or wherever and tell them 

to come back when they have the problem solved. That is not what 

happens in Canada, although there is confusion about that point. 

I am worried that an independent agency in the classic sense 

would be a political orphan when it came time to fight for budgetary resources or to keep agencies accountable. Accountability is 

very important in our agencies. It is what stops, for example, the 

career professionals at the Census Bureau from writing articles or 

producing product about why there is poverty in the United States 

as opposed to measuring it, or preventing the professionals at BLA 

from talking about what ought to be done in the business cycle at 

a certain stage as opposed to measuring the business cycle. 

For those reasons, I think we need to always think about a Cabinet-level steward for any consolidated statistical agency. 

The problem, Mr. Chairman, is that the obvious and ideal choice, 

to my thinking, is the Commerce Department, much as the central 

statistical entity in Canada reports to Industry Canada. I think we 

are engaged still in the remnants of a snipe hunt about the Commerce Department here in the Congress, and we need to get over 

that so that we can start to make decisions about the statistical 

system that are governed not by the desire to dismantle Commerce, 

or to adjust the CPI, or to perpetuate the undercount in the decennial census, but rather decisions that are made with the best interests of the statistical users and our Nation in mind. 

I appreciate the opportunity to edit the submitted remarks I 

have given the committee. Now that I am on my own, my only opportunity to perfect the product has been reduced. 

Mr. HORN. We thank you for that statement of clarity. 

[The prepared statement of Mr. Ehrlich follows:]

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Mr. HORN. Mark Wilson, Rebecca Lukens fellow in labor policy, 

Heritage Foundation. Welcome. 

Mr. WILSON. Mr. Chairman, thank you for inviting me to testify. 

My name is Mark Wilson. I am the Rebecca Lukens fellow in 

labor policy at the Heritage Foundation. I would like to lend my 

voice to the discussion today on how consolidating Federal statistical agencies would free up additional resources and enhance the 

production of individual privacy and improve data quality. Please 

accept my written testimony and enter it in the record. 

I must also emphasize my remarks are my own opinions and 

should not be construed as representing any official position of the 

Heritage Foundation. 

The American statistical system, as everyone realizes, is one of 

the most decentralized data producing systems in the world. Although other countries have moved toward centralizing their statistical work within a single agency, the United States has moved in 

the opposite direction, creating more and more separate statistical 

agencies throughout government, more often than not with separate confidentiality provisions and requirements and mandates on 

each one. The result has been a patchwork of statistical agencies 

and confidentiality provisions with little or no data sharing requirements or mandates or provisions amongst or between them. Despite spending almost $2.7 billion per year, the Federal statistical system is in somewhat of a crisis these days. The country’s decentralized system hinders improvements and squanders resources 

on, at times, duplicitous bureaucratic overhead. As a result, the 

quality of the Nation’s economic and social statistics has deteriorated over time. Poor data, in turn, has a damaging effect on the 

Federal budget, a detrimental effect on the public policy debate, 

and disastrous implications for business decisions, points that the 

General Accounting Office acknowledged in a July 1995 report. 

Over the years, numerous improvements that have been cited by 

the experts as necessary for ensuring the quality of U.S. statistics 

have not been implemented. The decentralized fragmented Federal 

statistical system means no single agency or official is really answerable for the modernization and improvement projects that cut 

and sweep across agencies, such as improving measures of the 

service sector of our economy. I am not sure whether a virtual 

agency would have a clearly defined, singularly answerable, and 

identifiable person in this fashion that could do this. 

The chief statistician can assert leadership and attempt to encourage such action but currently is very limited in terms of what 

ability they have to ensure the accountability that the agencies 

that currently conduct updates to our statistical system carry out 

those improvements. 

The fragmentation and confusion of the current system has left 

many key areas of our society unmeasured, while resources are expended on collecting data of what I feel are limited public policy 

interest. For example, we have quarterly data on the number of 

goats that are lost to predators going back a number of years, but 

we have precious little data on the role of religion in creating stable and well-adjusted families. 

The topic that has been discussed here at great length has been 

tangentially the decline in the public trust of Federal surveys and 

49

the Federal statistical system as a whole. Protection of the confidentiality of data collected for statistical purposes is basic to the 

development of high-quality data in any statistical system. Unless 

respondents can be assured that the data that they provide to the 

government for statistical purposes will not be used for regulation 

or enforcement, they will either not respond or report inaccurate 

information. 

The protection of confidentiality, again, as these gentleman have 

pointed out in previous testimony, is not uniform in the current 

Federal statistical system because the individual agencies have 

been created at different times for different legislative reasons. As 

a result, the system operates currently under a complex set of regulations, Executive orders, and laws that differ in application 

among the statistical agencies. 

Although OMB’s new confidentiality order is a step in the right 

direction, I believe that legislation is necessary to correct this 

patchwork of confidentiality requirements that we have. Currently, 

the U.S. system has neither the advantages that come from centralization nor the efficiency that comes from strong coordination. 

While centralization alone is not a sufficient measure to solve all 

the problems facing the system, significant improvement, I believe, 

cannot occur without it. 

According to former Commissioner of the Bureau of Labor Statistics, Janet Norwood, consolidating the fragmented and decentralized Federal statistical system is one of the most effective solutions 

to the problems it is currently under. It would provide better data 

at a lower cost. It would create a single statistical agency that 

would facilitate the creation of a coherent national research strategy and development of better statistics. It would also have greater 

independence and improve the confidentiality and public trust in 

our statistics. 

As the 105th Congress begins its debate over the Federal statistical system, it should bear in mind four important principles to ensure the taxpayers and data users receive the greatest benefit from 

any reform. 

Combine as many agencies as possible. Although consolidating 

the four largest statistical agencies would eliminate some duplication, the largest budget savings and benefits from economies of 

scale will occur and come from integrating as many of the smaller 

agencies as possible. 

Improve privacy and confidentiality. The confidentiality protection laws established piecemeal among the different statistical 

agencies should be replaced with uniform privacy provisions that 

would permit the exchange of confidential information for statistical purposes only and ensure the independence and objectivity. 

Two of the most important attributes of an objective statistical 

agency are the longevity of leadership and the independence from 

political pressure. 

You should also strengthen coordination by giving a consolidated 

agency the authority and the management structure to enable it to 

develop an overall statistical research and development agenda and 

to implement modernization and improvement projects across agencies. 

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Thank you for your time. I would be happy to answer any questions you might have. 

Mr. HORN. We thank you for your time. 

[The prepared statement of Mr. Wilson follows:]

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Mr. HORN. Let me go to our last witness before we ask questions. 

Mary Susan Vickers, research director, Interstate Conference of 

Employment Security Agencies, Inc. 

Ms. VICKERS. Thank you, Mr. Chairman, for this opportunity to 

testify on behalf of the Interstate Conference of Employment Security Agencies. 

My name is Mary Susan Vickers, and I am director of labor market information for the Interstate Conference, or ICESA. ICESA is 

the national organization of State officials who administer the Nation’s employment and training services, unemployment insurance 

laws, and labor market information programs. The State Labor 

Market Information Divisions, or LMI units, within employment 

security agencies produce, analyze, and distribute labor statistics to 

improve economic decisionmaking. These statistics include employment, unemployment, and wage information produced primarily 

through cooperative Federal-State statistical programs with the 

Bureau of Labor Statistics. 

The BLS programs are housed in State employment security 

agencies because their existence depends directly on their connection to unemployment insurance administrative data. BLS’s contracts in each State rely on access to and use of confidential administrative records collected by the States for the administration of 

unemployment insurance programs. The collection of unemployment insurance data is authorized by State law and conducted according to State policies and regulations. The disclosure of unemployment information is also governed by State statute and policy. 

These Federal-State statistical programs are a fully integrated 

component within State employment security agency functions. 

Within the unemployment insurance programs, for example, they 

are used to set unemployment compensation benefits and to determine tax rates for employers. For job training and employment programs, they are used to allocate resources to sub-state areas. These 

statistical programs, using supplemental resources from the U.S. 

Department of Labor’s Employment and Training Administration, 

are key to developing knowledge about where there are current 

jobs, what they pay, and the background and education job seekers 

need to obtain them. 

Within the context of the Federal-State cooperative programs 

with the Bureau of Labor Statistics, the States perform two critical 

functions: First, they are the producers of the statistical data. Second, they provide the analysis requested by State and local users 

to create that data into information, labor market information. 

Labor market information is a key driving factor in the planning 

and delivery of State work force development systems and major 

State welfare reform initiatives. State staff are responsible for 

keeping employers informed of the confidential statistical use of the 

data and have a vested interest in data quality and timeliness. 

States are also strong advocates for reducing employer reporting 

burdens; for addressing State confidentiality concerns in State data 

sharing proposals; and to ensure that the States, as producers of 

labor market information, achieve equal status within the FederalState statistical system. 

Federal sharing of State data represents a transfer of authority 

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thority means that the States require assurance that Federal practice does not violate State statute. 

If, as a result of consolidation, for example, confidential data 

from State unemployment insurance records provided to the Bureau of Labor Statistics were to be shared with another Federal 

agency, statutes in several States would have to be changed. State 

legislatures might agree to some of these changes only if qualifiers 

were stipulated. These qualifiers might include that States be advised of the nature of the use of the data and the State would be 

reimbursed for the cost of providing the data to the additional Federal agency or the Federal reciprocal agency would abide by State 

disclosure rules. 

It is also our position that the States should have access to data 

held by Federal agencies for statistical purposes. Data sharing 

agreements should be reciprocal. An agency receiving data and 

then sharing that data should also provide access to the original 

collecting agency, which may be a State. 

Finally, we believe that a reformed system should ensure a State 

rule that encourages the Federal statistical system to evolve as the 

needs of our mutual customers evolve. In other words, consolidation for greater efficiency is important, but consolidation will not 

be effective if it is not responsive to our customers’ needs or if it 

does not recognize the interdependence between Federal and State 

needs. 

The Federal statistical agencies have direct customers, such as 

the Federal Reserve Bank, while States’ customers are employers 

planning business expansions, job seekers, and economic developers. The needs of all of these customers are important and must 

be met. 

As you develop your reform proposal, ICESA is prepared to assist 

in additional study and planning for change. Thank you for the opportunity to share our comments. 

Mr. HORN. Well, thank you. I appreciate your testimony. 

[The prepared statement of Ms. Vickers follows:]

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Mr. HORN. Let’s ask a few questions, and then I think we will 

wrap it up. 

Just in general are the Federal Government statistical agencies 

focusing too much of our statistical resources on the more traditional parts of the economy and not enough on the rapidly growing 

information, technology, and service sector? 

Just to pick one, pick biotechnology, which is the most rapidly 

growing industry in California. Any feelings on that? I realize some 

of you are specialists in a particular area. 

Mr. EHRLICH. Let me speak to that. 

Mr. HORN. What do you hear? 

Mr. EHRLICH. The short answer is yes. The problem is not as profound as it was several years ago. 

As you understand, Mr. Chairman, 21⁄2 years ago we had the 

first comprehensive strategic review of the Nation’s economic statistics in 40 years, held at the Chamber of Commerce downtown; 

and started to get rid of old programs. For example, regional economic projections, sub-national retail sales: the leading economic 

indicators were farmed out to the private sector so that we could 

free up resources for exactly those kinds of measurements. In the 

1997 economic quinquennial, I think we will have real balance between the service and non-service sectors. 

On the other hand, the service sectors pose special problems 

about their conceptual being. How do you measure a unit of software? How do you measure a unit of insurance being provided or 

a financial derivative? Who sold what to whom? That requires more 

resources so we understand their quality and understand their contributions to economic growth. 

With that said, if I may move to my third hand. I believe it is 

not the structure of the system that obstructs our ability to answer 

those questions right now. It is the level of resources provided to 

it, and, to some extent, there are questions of management. 

Mr. HORN. What sort of questions of management come to your 

mind? 

Mr. EHRLICH. Are you willing to establish priorities and enforce 

them within the individual agencies as to what is more important 

than the next thing? What we did at BEA and Census was establish that measuring the quality and concept of output and therefore 

prices was our most important priority. And while we regretted 

very deeply cutting such programs as regional economic projections 

or nonresidential building permits that had real value to real 

users, they weren’t as important as the central question—are we 

getting inflation and growth right? Therefore, they had to go. 

Mr. HORN. On that very point, the regional Federal Reserve officers usually have a chief economist and a number of economists on 

the staff and generally try to watch some of that local economic 

data. Have you found them wanting? Does that make sense that 

they have that role? I realize the two are good for each other, competition and all that. 

Mr. EHRLICH. They have that role, but what they provide is not 

a substitute. The beige book, which is the summary of their findings, is really qualitative in nature. It is an essay as opposed to a 

data series that can be used for business planning and the like. 

69

I think they use their anecdotal reservoir as a substitute, to some 

extent, for data that they used to provide, and when they provided 

it, we used it as a complement. 

Mr. HORN. OK. Are the Federal Government agencies taking advantage of the improved methods that businesses use to track information in order to improve the Federal data collection methodologies? For example—and this is a rather interesting one—do 

Federal statistical agencies incorporate the universe America product code information tracked by scanners into surveys of economic 

data? What is the answer on that one? 

Mr. EHRLICH. Not yet. We are designing programs to do so. The 

product code isn’t a full universe of products. 

The obstacle to using bar code data in a statistical system is to 

find a way to bridge between those products that are bar coded and 

those establishments that are bar coded, even though they are the 

great preponderance of products and establishments, and those 

that don’t, so you avoid double counting and the like, and you can 

seamlessly capture the entire household goods sector. 

I referred in my testimony, in the statement I gave to the subcommittee, to our ability, once we have that, to get both price and 

quantity data from it. I think that the price and quantity data 

found in bar codes could be very useful for experiments in measuring the changing quality of goods and, therefore, what the real 

impact of inflation has been. But we are not yet at a point where 

we can use them as the basis for all of the GDP calculations. 

Census is also working on software that a respondent firm could 

load into their own accounting systems and that would automatically report to us. At first, it sounds almost nightmarish that you 

would allow that, but, in fact, it is the same level of confidentiality 

and the same level of assurance that over-the-phone or pencil and 

paper reporting provides. It is simply allowing it to happen automatically at lower cost. That is another example of the kinds of 

technological opportunities they are pursuing. 

Mr. HORN. As you talk, I have been thinking of interesting studies; and, of course, they probably all would run into the Hawthorne 

effect. 

For example, if you had a card that you are picked in a random 

sample nationally by BLS, BEA, Census, or one of the statistical 

agencies, you use that card whenever you make a purchase. That 

is registered, obviously. You can pull all of that together. 

Now, the mere fact you are designated to be on such a select 

panel, Hawthorne told us it didn’t matter what you do. The more 

somebody cared about people, they would increase productivity. 

Would they go out eating hamburgers and grease when they think 

that is the normal thing to do, when the rest of us are out eating 

vegetables to avoid hamburgers and grease? 

Mr. HORN. Dr. Sondik. 

Dr. SONDIK. Actually, we are using that technology in the National Health and Nutrition Examination Survey which we are in 

the process of implementing. We use it not so much in identifying 

products that someone is using but use the technology within the 

centers that we have to track the samples that are derived from 

the individual and track individuals as they move within our trailer examination centers. 

70

We use it in terms of the home interviews that are done; and we 

use it, in fact, in nutrition monitoring, in which we found that the 

Hawthorne effect is perhaps not as strong as we might hope that 

it would be in terms of what this country is eating. 

So I think in that survey, and I would like to think in some of 

the other things we are doing, particularly in information dissemination, we are trying to make as much use as we can of technology 

that is really not behind the wave but really is ahead of the wave, 

and we are certainly doing it with this survey. 

Mr. HORN. Anybody else? 

Mr. HAKES. I think all of us favor electronic reporting. We have 

used some version of it now for 3 and 4 years, and it keeps getting 

better. I think we have to be sensitive to our respondent base. If 

even as many as 10 percent of our respondents have difficulty reporting electronically, that may be a barrier to us using it for the 

whole universe. 

Another thing we noticed is once you have a system in place, the 

reporting entity is sometimes reluctant to change it. We have suggested removing certain questions to reduce respondent burden; 

and the respondent says, don’t take out the question; we don’t want 

to change the system. 

It gets complicated, but I think there are tremendous potentials 

in electronic reporting. A person can get a screen of what they reported last time, simply change the data, or maybe have the data 

go in in an automated fashion from their accounting system. That 

improves the quality at both ends, and I think that there will be 

a lot of movement forward in this area. 

The difficulty will come mostly in the small business area, where 

that will be a more difficult transition. But that will come, also. 

Mr. HORN. Would those of you that operate energy, health, any 

of the data banks before us, do you draw on BLS and Census data 

in any of your statistical operations? Do you need to use their duplications, their series, whatever you want to describe it as? 

Dr. SONDIK. Yes. They are actually vital to what we do. But we 

have limitations in what we can do now, because we can’t share 

data. 

For example, the Census Bureau actually implements the health 

interview study, which is the core of the Health and Human Services survey integration activities. In fact, we are trying to build 

surveys around that in a process we call survey integration. But 

when we do that, we actually have to derive the sample from that, 

and they implement it for us. We could save considerably if we 

were actually able to use their sampling frame. 

The same goes for BLS, in which we have ongoing discussions, 

but, for example, provider surveys—the Secretary tells me she 

hates that word provider—but for those who deliver or are involved 

in health care, we need to be involved more with them in understanding exactly what they are doing. The frames that we could derive from BLS and from Census would be enormously useful in 

that. 

There are frames that I am not sure we even know about that 

could be very useful in health at this point. For example, in energy, 

in helping us understand the implications of various forces. 

71

When we study health, the issue is really the interaction of different forces. Studying health is not only looking at particular 

genes, because, in fact, what happens to a person is not just a function of your gene structure. It is a function of all of the other interplays—the social ones, the ones that have to do with food intake, 

for example, and actually the care that is delivered. All of those are 

derived from information from different areas and this could be 

handled much more efficiently if, in fact, we were able to share information with confidentiality, which now, with the statistical confidentiality act, we would be able to do. 

So it would be of enormous benefit to us, not only in saving 

money but from the standpoint of how much it would open the 

kinds of studies that we are able to do. 

Mr. HORN. I would think your colleague next to you, you have 

got energy surveys, probably home heating oil, New England, the 

health relationships there, when the price goes up or the energy 

deliveries go down in either case. 

Dr. SONDIK. As he was speaking, it certainly occurred to me that 

was an area that would be important to us, particularly if we could 

segment and look at the impact on us and do it on the basis of income. It would be very important. 

Mr. HORN. Things generally happen incrementally in Congress 

and in the executive branch, too, for that matter. What I am interested in, since we did have a bill in the last Congress and will 

probably have it in again, in terms of Bureau of Economic Analysis, 

Census, Bureau of Labor Statistics, are those agencies, the ones we 

could start with first, that consolidation might help you more than 

it does now? 

I would just be curious if there is any reaction on this. I want 

to go down the line and see what the views are. 

Dr. SONDIK. It would certainly help us. But I would much rather 

see data sharing expanded so that the other agencies could also be 

involved. 

Agriculture is another area in which the study, for example, of 

the environment that the farmer is in, pesticides and so forth, 

would be much easier, and it is a very important area. These studies would certainly be enhanced with that freedom. 

Mr. HAKES. From our perspective, I don’t think the issue is consolidation. It is confidentiality. 

On the residential survey, for instance, we use the Census data 

down to about the level of 50 households, and we can go that far 

and not have the confidentiality problem. 

Then we get the logical thing at that point would be just to continue right on with the Census data down to the individual household, but we cannot do that. From that point on, we are on our 

own. 

Another point of interaction with Census is we actually contract 

with them to do the Manufacturing Energy Consumption Survey. 

We don’t really deal with the individual respondent data. It does 

create somewhat of an awkward situation because I think analysts 

having access to that data is important from a quality standpoint. 

But we sort of cobble together things now, using the Census as 

much as we can, but we sort of reach a point where we have to 

stop. 

72

Mr. HORN. We could solve the confidential situation and then 

have some things centralized, others decentralized with access because of changing the confidentiality access situation that exists 

now. So that is another model we might think about. 

Canada has presumably—what—a centralized statistical agency? 

They include all departmental statistics in their particular operation? 

Dr. SONDIK. I believe they do. 

Mr. HAKES. The answer is yes, but I would caveat that in several 

ways. For instance, most of what is called—of the energy mining 

activities that occur in Canada occur in the Province of Alberta, 

and actually the statistics there are collected by the provisional 

government, not by the Federal Government, so it is certainly more 

centralized than the United States system, but it is not a totally 

centralized system. 

Mr. HORN. Mr. Ehrlich, how about it? 

Mr. EHRLICH. Mr. Hakes makes a good point. The provinces are 

more important in Canada. They do bear a much greater portion 

of the burden, and they also create a burden of their own, insofar 

as the Canadian system is asked to calculate GDP by province on 

a quarterly, if not monthly basis. It is an ungodly task. 

Were you to consolidate, I would advise you out of my own experience to start with the five agencies, not the three you mentioned, 

and Energy and Agriculture. 

You say first why in terms of what I’ve left out. You have four 

agencies in NCES, NCHS, the Bureau of Transportation Statistics, 

and Justice Statistics. They have very important functions, and it 

provides important analytic and policy direction to the data-gathering processes over which they preside. 

The operations of those agencies share two characterizations. 

One is that the Census is used, as you’ve heard, to be the wedge 

to the system. Census has a world class field force. It’s well organized. They know how to go out on a low-cost basis and get work 

done. In that sense, the system is already centralized at the point 

of production. The other thing they share is that they are a conduit 

for money to States. And the States then go out and report back 

to those four agencies. So there are problems. Their issues are different regarding consolidation or higher levels of coordination. The 

five agencies, I think, would allow you to sit down with the managers’ most formidable weapon, a clean piece of paper, and start reorganizing in a way that some past efforts—Dr. Norwood’s, for example—have not. 

I think simply taking BLS, BEA, and Census, and creating an organization chart that has them as three operating divisions misses 

all of the nuances that are possible in centralizing functions related 

to national income, to personal and household incomes, to industry 

studies, to labor market studies, to demographic-based surveys, 

and the like. But we do have the opportunity to put common things 

together and arrive at common methodological approaches and to 

relieve ourselves of duplicate work where it exists. I think we start 

at those levels. 

Mr. HORN. Interesting. 

Mr. Wilson. 

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Mr. WILSON. I agree with Mr. Ehrlich. I think it’s important to—

again, to be considering consolidation, which I hope that you do, 

that you consolidate along the lines, I think, functionally rather 

than just organizationally as it is now with just being separate divisions, of BLS being one division, and Census the other, and BEA 

being another. 

I think it’s also important to consider that the statistical system 

of a Nation generally provides two forms of statistics, public statistics—which are of wide interest and are used by the general public 

and data users—and the administrative statistics—which are of 

narrow interest and are used primarily by the Federal or State 

Governments for policymaking purposes, regulatory purposes, and 

others. 

In that regard, it may be useful to take a look at how the United 

Kingdom, Great Britain, has consolidated their statistical system 

and how they’ve set up a public statistics service as well as the 

government statistics service and see what we can learn from that 

and perhaps integrate in the United States. 

Mr. HORN. Ms. Vickers. 

Ms. VICKERS. Yes, in terms of a consolidation of Federal statistical programs, I think the point we would like to make is just that 

the States are definitely involved in the system and interested in 

what will happen about it. The national system is a little bit different, in our mind, than a Federal system. 

Mr. HORN. Sure. 

Ms. VICKERS. Building a system from a local level up would be 

a system that would be helpful to our customers. 

Mr. HORN. Just for the record, the agencies you represent, the 

employment agencies. 

Ms. VICKERS. Yes. 

Mr. HORN. The Federal-State partnerships since, what, 1934 or 

so, somewhere around there. 

Ms. VICKERS. Our organization has existed since 1937. 

Mr. HORN. 1937. They are providing unemployment data in particular, aren’t they——

Ms. VICKERS. Yes. 

Mr. HORN [continuing]. Through those offices? 

What else are they providing? 

Ms. VICKERS. They are collectors for the Bureau of Labor Statistics, statistical programs on wages, occupations, current employment on a monthly basis. The CES programs have a 90, as well as 

the unemployment, and employment statistics. 

Mr. HORN. Interesting. 

Ms. VICKERS. Mass layoffs is another area that the States collect 

for the Bureau. 

Mr. HORN. While we’re on some of this question, Mr. Ehrlich, 

you’re a very eloquent person. I knew that from the first hearing 

with you. Let me read one of your eloquent statements you once 

made in the Chicago Tribune. 

Mr. EHRLICH. Oh. 

Mr. HORN. No, it’s OK. Don’t worry. 

Mr. EHRLICH. OK. 

Mr. HORN. Quote: If we can’t maintain a pace of improvement in 

collecting economic data as rapid as change in the economy, we’re 

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going to have the world’s most advanced economy with a statistical 

system worthy of a middle tier nation. We need to start looking at 

economic data as being as much a part of our infrastructure as our 

roads, our ports, and our bridges. They’re part of what makes the 

economy go. 

Is that a correct quote? 

Mr. EHRLICH. Yes, it is. 

Mr. HORN. Could you elaborate on your comment about having 

a statistical system worthy of a middle tier nation. 

Mr. EHRLICH. This goes to a remark that has been made in various places in the panel. The economy is changing very rapidly. 

When we think about, for example, the problems that we associate 

with the statistical system, the measurement of services, our questions about whether or not we’re overstating inflation and understating growth, they’re all various dimensions of the problem of 

economic change. 

We have the most innovative, advanced, and technologically progressive economy in the world, probably the most that the world 

can imagine. And that means that we’re continually creating new 

kinds of goods and services and that old ones are changing in nature and scope. And the statistical system has to accommodate 

those as they occur. 

I’ve often, Mr. Chairman, used the metaphor of the tailor, that 

we think of the statistical system being like a tailor measuring 

someone for a suit of clothes. And you hold the ruler or the tape 

measure up to them, and you read off the numbers, and you write 

them down in books. That makes sense only if we accept the fact 

that the person that we’re measuring is sprinting as fast as they 

can, which means the only way we can do our jobs—and I’ll allow 

myself to dignify myself by still saying ‘‘we’’—is by running as fast 

as the person we measure and being twice as agile. It’s a formidable challenge. 

To some extent, moving toward consolidation would help us meet 

that challenge in the various ways that I mentioned. But there are 

other dimensions of the problem, and they have to do, as I mentioned earlier, with the level of resources we’re provided and with 

management will. 

The economy has grown by around 40 percent in the last 15 to 

20 years, and the number of establishments—number of places 

where businesses conducted per unit of GDP—has grown by around 

30 percent. And yet in real terms, the resources we’re providing are 

still what they were 15, 20 years ago. 

Mr. HORN. Yes, Mr. Hakes. 

Mr. HAKES. I of course can speak most authoritatively about energy statistics. I believe that the United States has by far the highest quality energy statistics of any in the world, and I think most 

countries in the world would agree to that. When the trade press, 

which is, I think, the most frequent and eligible user of our data 

in many instances or refers to our data, the word ‘‘authoritative’’ 

is used as an adjective on many, many occasions. 

Last week, one of the trade press referred to our statistics as the 

‘‘Bible of Energy Statistics.’’ Although I think we need to be aware 

of opportunities to improve, I think we certainly have within our 

system some statistics that are considered the finest in the world. 

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And we advise many governments around the world on how to upgrade their statistics. 

I think as we look for opportunities to improve, which I think all 

of us are very committed to, I think we have to look at the centralization versus decentralization question. 

I, like others in the room, used to teach political science. But I 

started in government 20 years ago, and one thing that struck me 

over and over again is—after I worked in several different agencies—there is a tendency if an agency is highly centralized, to believe that decentralization will substantially improve that agency’s 

performance, and if the agency is decentralized, it can be substantially improved by centralization. 

Now, any change may cause progress, but any change like that 

also has very high transaction costs. And let me give you an example. Right now, in energy, there’s a lot of changes going on in the 

energy industries. The deregulation of the electric industry that is 

going on at the State level may get some boost at the Federal level. 

Those industries will look very different a few years from now than 

they look now. 

Now, if energy has to go through four more layers to get approval 

to fix the system, that may cause problems. So that there are some 

potentials of integration. There are also some dangers of integration in not being able to turn the battleship always quickly when 

things need to be changed. 

I would just mention one more thing from our experience. EIA 

itself is a unified agency combined out of several previous agencies. 

It was formed in 1977 out of the Bureau of the Mines, the Federal 

Energy Administration, and other agencies that were brought in. 

When I arrived in 1993, and even to some extent today, you can 

see those operating independently within our operation. Whether 

you can tell whether they came from the Bureau of Mines, this is 

essentially a management project. It is difficult even within our 

statistical agencies to do the amount of integration that needs to 

be done. And so I think we have to see that there are some potentials in a decentralized system, some in a centralized, and hopefully we can find the advantages of both. 

Mr. HORN. That’s a very helpful comment. 

We have a vote on the floor, and I don’t want to have to recess 

and hold you here. But is there any other comment members of the 

panel would like to make that we haven’t asked you the right question where you should make it? 

Dr. SONDIK. Just in terms of consolidation, and perhaps this is 

from the health point of view, but I would think it applies across 

the board—the statistical agencies are not only archivists, if you 

will, but they’re involved in providing the information that we need 

for making decisions. And I think in order to do that, you have to 

be close to the communities that you’re serving or at least have 

very strong links to those communities. 

And I see in the health-related statistical agencies, the involvement of each of those with their communities is absolutely invaluable to what it is they bring to the table in knowledge concerning 

where the country is going. In our case, I think it’s even worse 

than the tailor running after the person who is sprinting. I’m not 

sure we have an idea of any direction that the person is going in 

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at this point and really need to be as close to that as we can be, 

at the same time that we don’t lose the past thread, so to speak. 

Mr. HORN. Any other comments to be made? Ms. Vickers. Mr. 

Wilson. 

Mr. WILSON. No. 

Mr. HORN. Mr. Ehrlich. Mr. Hakes. 

Dr. SONDIK. Thank you. 

Mr. HORN. Well, let me just thank each of you. I think the country can take great pleasure in the fact that we’ve got such able people running some of our key statistical agencies. I’ve learned a lot 

from this, and we’re going to be consulting you, because I think 

that the point that you’ve made in our legislation, we’re just trying 

to keep it very simple, but there ought to be some goals and aims 

in there. 

And when you mention the national economic data and the different series that one might think about, not as definitive but simply as illustrative, we would simply welcome your comments in the 

months ahead, and both my colleagues and the staff, I think, would 

want to be interacting with you and some of your other counterparts. 

I’m familiar with the Bureau of Justice Statistics, because I 

spent, I think—well, maybe 15 years on the National Institute of 

Corrections after helping found it. And you are right about the 

linkages with the community you serve, because I remember when 

we wanted to make suggestions to the FBI uniform crime survey 

to get women and some of their problems into it, it took quite a 

battle almost. And I think some of those days are in our past, but 

there are questions that ought to be asked, that if you aren’t close 

to the people that are affected, you are not going to really think 

about them very much. 

So I thank you all for coming. It has been an immensely interesting hearing for me. And with that, we are adjourned exactly at 

4 p.m. 

[Whereupon, at 4 p.m., the subcommittee was adjourned.]

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