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BEA’s Budget: Setting Priorities in the Face of

Tight Budgets

Brian C. MoyerBEA Advisory Committee

Washington, D.C.

May 11, 2012

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Current Budget Environment

Department strongly supports BEA’s mission, but budgets are extremely tight and cuts are likely

BEA needs to continue producing its core statistical products

“Flat” budgets in even a mild inflationary environment erode base funds

BEA’s building lease expires in FY 2013

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BEA’s FY 2012 Budget: $92.2 m

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Industry—$13.2 m (14%)

Regional—$16.3 m (18%)

International—$31.7 m (34%)

National—$31.1 m (34%)

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Spending by Category

People (69%)

Data contracts (2%)

Rent (7%)

IT (8%)

Overhead, other charges (12%)

Training (2%)

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Within-budget Improvements

Prototype quarterly GDP by industry statistics

Work with BLS on an industry-level production account

New quarterly tables that reconcile BEA’s data with the Fed’s flow of funds data

New quarterly IIP estimates

Work on new quarterly GDP by state statistics

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Improvements in Efficiency

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Modernization of IT systems Allows BEA to complete more work with

fewer staff Improves timeliness of the data

Reduction in administrative costs Savings of $600 k in FY 2012

Expansion of electronic filing for BEA surveys

Buyouts/early outs

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Performance/Zero-based Budgeting

▪ Budgets begin at “zero” and each program/product is analyzed by its resource costs and expected results

▪ Two-step process Identify, collect, and analyze cost

information on each program/product Set priorities among

programs/products in consultation with customers and stakeholders

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Past Cuts to BEA’s Programs

▪Discontinued short and long-term macro forecasting units

▪Transferred Leading Indicators to the Conference Board

▪Discontinued regional projections

▪Discontinued benchmark capital flow tables

▪Discontinued FDI surveys, raised reporting thresholds, and reduced the level of detail collected on BEA’s surveys of MNCs

▪Reduced the level of industry detail provided for county personal income

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“Menu” of Potential Future Cuts

▪ Eliminate advance GDP by industry statistics ($1.1 m)

▪ Eliminate county and metro area personal income statistics ($2 m)

▪ Eliminate monthly estimates of personal income and outlays ($2.3 m)

▪ Dramatically scale back projects to modernize the accounts such as better measures of health care inflation ($3 m)

▪ Reduce detail, periodicity, and analysis of FDI/MNC data ($5 m)

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“Menu” of Potential Future Cuts

▪ Discontinue “underlying detail” tables for GDP and the national accounts ($400 k)

▪ Discontinue RIMS program ($1.4 m)

▪ Discontinue travel and tourism statistics (net $150 k)

▪ Discontinue paper publications ($180 k)

▪ Scale back the IT modernization and systems reengineering ($3 m)

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