BLS Congressional Testimony

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Mr. Chairman and Members of the Subcommittee:

I appreciate this opportunity to discuss the Bureau of Labor Statistics (BLS) appropriation request for 2004.

The BLS is the principal fact-finding agency in the Federal Government in the broad field of labor economics and serves as a statistical resource to the whole Department of Labor. As such, the BLS collects, processes, analyzes, and disseminates data on employment and unemployment; projections of the labor force and employment by industry and occupation; prices and inflation at various levels of the economy; consumer expenditures; wages and employee benefits; occupational injuries and illnesses; and productivity and technological change in U.S. industries. Most of the BLS data come from surveys conducted by BLS field staff, by the Census Bureau on a contract basis, or jointly with cooperating agencies of State governments. The BLS strives to have its data satisfy a number of criteria, including relevance to current social and economic issues, timeliness in reflecting today's rapidly changing economy, reliability and consistently high statistical quality, and impartiality in both subject matter and presentation.

The BLS is responsible for some of the Nation's most sensitive and widely used economic data series. These data are a key source of economic intelligence, and represent critical inputs to economic analysis, planning, research, and decision making by businesses, non-profit organizations, governments, and individuals. BLS data also are used in the development of other important Federal statistics, such as the Gross Domestic Product. Both the private and public sectors rely heavily upon BLS data for use in a wide range of sensitive contexts, including wage setting, contract and payment escalation, and the allocation of Federal and State funds. Ensuring the high quality of these indicators is of critical importance.

The 2004 BLS request of $512.3 million and 2,529 FTE (including reimbursable activities) will provide the funds necessary to continue core programs that are of vital concern to the Congress, the policy making and program agencies of the Executive Branch, and the public. This level includes a program increase to produce two Current Population Survey (CPS) supplements on key labor force issues every year, such as volunteerism and job turnover. The supplements will provide trend data on the labor force issues they address, which will be used to better inform decision-makers in both the public and private sectors.

The budget includes an increase of $21.8 million for the program increase and built-in increases, such as Federal pay raises and increased costs of data collection by the Census Bureau and the States under contract with the BLS.

The BLS will continue with efforts funded in recent years, including modernizing the computing systems for monthly processing of the Producer Price Index (PPI) and U.S. Import and Export Price Indexes and to improve both programs' outputs. The BLS is replacing its older PPI subsystems with ones based on a more secure, stable, and expandable computing platform. The request level also continues resources for important improvements to both programs, such as annual weight updates to the U.S. Import and Export Price Indexes and experimental PPIs for goods and services that will provide the first economy-wide measures of changes in producer prices.

The BLS will continue to refine the plan for revising the Consumer Price Index (CPI) sample by geographic areas as well as the sample of housing units used for measuring rent change. In 2004, the BLS will begin publishing American Time Use Survey data. Data from the Survey will improve assessments of national well-being, as well as produce diary estimates of time spent in market work that will be used to evaluate existing estimates of work hours.

Work also will continue to extend Producer Price Index (PPI) coverage for the first time to the construction sector of the U.S. economy and to enhance service sector coverage; to develop new industry labor and multifactor productivity series for the service-producing sector; and to improve the statistical quality of local area unemployment statistics.

In addition, the BLS will continue with its multiyear initiative of expanding the Employment Cost Index. The expanded ECI sample will allow the BLS to produce more precise indices of the changes in employer wage and benefit costs by major industry and major occupational groups and to produce better annual estimates of employer compensation cost levels.

The 2004 President's Budget is an integrated performance budget. It includes BLS strategic and performance goals that are supported by outcomes, clusters of outputs, and strategies. The integrated budget links full costs to BLS performance goals and indicators, describes past performance results, and shows how the inputs resulted in the desired outcome for prior years.

The BLS has met its performance goals for 2002 and is on target to meet its goals for 2003. Recent accomplishments include developing and making available employment and wage data quarterly by detailed industry and by State, metropolitan area, and county; beginning the publication of monthly Job Openings and Labor Turnover Survey data as a developmental series, with regular production following in 2004; publishing a superlative CPI, which reflects more fully consumers' responses to changes in relative prices; and publishing new measures of productivity and unit labor costs for 18 service-producing industries.

The BLS was included among the Federal programs the Administration assessed as a basis for the preparation of the 2004 President's Budget. The Office of Management and Budget developed and used the Program Assessment Rating Tool (PART) for this evaluation. The BLS overall rating, classified as "moderately effective," was the Department's highest. The assessment recognized the BLS as a pioneer in performance budgeting. In response to the PART findings, the BLS is revising its performance goals to be more transparent to the general public.

The BLS also demonstrates its commitment to accomplishing the five government-wide initiatives in the President's Management Agenda (PMA) by integrating its strategies for achieving these initiatives with its own internal management goal. For example, the BLS Human Resources Strategic Plan is built around five goals that lead to the accomplishment of the PMA's strategic management of human capital initiative. BLS objectives, strategies, and results pertaining to the management of human capital are reflected in the BLS integrated budget, specifically in the management goal.

In summary, Mr. Chairman, the BLS seeks to provide high-quality statistics that are used to make well-informed decisions. Support for the 2004 budget request will enable the BLS to continue production of essential data series; continue moving forward with important initiatives; and further efforts to produce information on key labor force issues every year. This budget reflects a commitment to maintain and improve the programs of the BLS.

Mr. Chairman, I will be pleased to answer any questions the Committee might have.