1. Data Collection in a Decentralized Statistical System – The U.S. Perspective Friends of the Chair Group on Integrated Economic Statistics, Work Group Meeting June 6-8, 2007 J. Steven Landefeld Director

2. www.bea.gov 2 Background to U.S. Decentralized System  Statistical system and laws grew over time to meet specific policy needs  Increasing regulation and monitoring of industries and institutions  Deregulation has dismantled parts of the system but much of it is still in place

3. www.bea.gov 3 Imprint of Regulation and Monitoring on the U.S. Statistical System Agriculture NASS, ERS Financial FRB, Treasury, SEC, FDIC Health Care NCHS, CMS Energy EIA Transpiration BTS Labor BLS Commerce Census, BEA Environment EPA

4. www.bea.gov 4 Characteristics of U.S. Decentralized System  Almost all agencies have separate enabling legislation and data collection authorities  No comprehensive statistical “law”  Reflecting public concerns, there are strong confidentiality protections  Civil and criminal penalties for disclosure  Sharing of data among agencies prohibited, with exception of limited data sharing relationship between BEA/BLS/Census

5. www.bea.gov 5 Characteristics of U.S. Decentralized System: Privacy  Strong U.S. resistance to provision of “too much” information to the Government.  Such concerns major determinant of the structure of the U.S. Statistical system  Decentralized – no single agency able to access and share data  Strong confidentiality – limited access to tax and administrative records for statistical purposes  Collection system mainly based on Censuses with extrapolation using sample surveys designed to minimize respondent burden

6. www.bea.gov 6 Chief Statistician of OMB  Key role is coordination of decentralized independent system  Charged with managing the trade-off between respondent burden and statistical needs  No direct budget or management control of individual agencies, but  Can exert significant effect through cross-cutting OMB review of budgets  Statistical agencies independent but report to both OMB and parent departments  Parent departments have direct budget and management control

7. www.bea.gov 7 U.S. Business Accounts  Statistical and Regulatory Reporting based on Generally Accepted Accounting Principles (GAAP)  Significant flexibility in GAAP  Significant differences between GAAP, IRS, and Economic Valuations  Significant adjustments required to provide consistent accounting  Key Issues  “Gaps in GAAP”  Rules-based, but significant flexibility  Stocks options, intangibles, pensions and “off-the-book” liabilities  Harmonization with IFRS  Principles based; also significant flexibility

8. www.bea.gov 8 Sample Frame/Business Lists Census Federal-tax based and Census identification and collection BLS State-tax based and BLS identification and collection BEA BEA identification and collection, tax based supplement IRS/SOI Federal-tax based EIA, ERS, NASS, FRB, Treasury Agency identification and collection

9. www.bea.gov 9 Comprehensive Data Available for Benchmarks  Censuses – virtually complete and most detailed data available – used for benchmarking  Quinquennial Economic Census  Quarterly Census of Wages and Earnings (State & local data)  Benchmark FRB/BEA International Capital and Investment Surveys

10. www.bea.gov 10 Good Annual Coverage From Survey Data  Annual Surveys: most comprehensive survey coverage (lower filing thresholds) and most detailed survey data:  Annual Census Surveys: Manufacturing, Trade, and Services  Annual BEA Surveys of Multinational Company Operations  Annual IRS Business Tax Filings (Federal tax data)  Annual BEA/FRB/Treasury International Capital and Investment Surveys  Other annual survey data: EIA, ERS, NASS  Challenges: Services expansion, updating, consistency, data sharing, and level of detail

11. www.bea.gov 11 Rich Set of Quarterly and Monthly Current Business Indicators  Quarterly and Monthly Surveys: higher frequency but less complete – higher filing thresholds and limited detail  Quarterly and monthly Census trade, manufacturing, services and financial surveys  Quarterly BEA international services surveys  Monthly BLS payroll survey  Monthly CPI, PPI, and IP prices  Other public and private data  Challenges: Services expansion, updating, consistency, and level of detail

12. www.bea.gov 12 Strengths of Decentralized System  Resulting system good at providing timely measures on issues of interest to public and private decision makers:  Good at innovation in concepts and methods  Good at updating the estimates to reflect changes in the economy  Good at addressing current policy and business concerns  Good at balancing timeliness, accuracy, and relevance

13. www.bea.gov 13 Challenges to Decentralized Systems  Challenges associated with decentralized system:  Developing consistent and well integrated estimates  Developing new measures on issues/areas with no constituency and Federal agency management  Balancing respondent burden with need for detail  Lack of a well-established conceptual foundation and organizational framework (true of all national accounts)

14. www.bea.gov 14 Bottom Line  U.S. Decentralized System largely reflects U.S. public’s demand for:  Timely data that answers the “big picture” questions,  Gets the answer “about right,” and  Doesn’t impose too heavy a respondent burden.