ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Tuesday, February 25, 1997 TAG: 9702250104
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Warning that the country risks flying in an economic fog with the radar turned off, a group of leading corporate economists urged President Clinton on Monday to overhaul the government's crunching of economic numbers.
The National Association of Business Economists stressed the importance of accurate statistics to the lives of average consumers and taxpayers: The government uses them to set tax and spending levels and interest rates, and private businesses use them to determine production levels and employee wages.
The group asked Clinton to consolidate the government's three main statistical agencies into a single high-level office similar to those in Great Britain and Canada.
The new agency - a combination of the Labor Department's Bureau of Labor Statistics and the Commerce Department's Bureau of the Census and Bureau of Economic Analysis - would be headed by a statistician general of the United States, who would serve a seven-year term and be removable only for cause.
The recommendation from the 3,200-member association, whose roster includes economists working for the nation's biggest corporations, comes amid growing concern about the quality of federal economic statistics.
In December, a congressional commission headed by Stanford University economist Michael Boskin said the Consumer Price Index overstates annual increases in the cost of living by 1.1 percentage points.
If uncorrected, that would increase the federal deficit by $1 trillion over 12 years by overpaying Social Security and other federal benefit recipients and undercharging millions of taxpayers.
More generally, chronic underfunding of the budget for collecting statistics has resulted in ``a system that does a better job of measuring the industrial economy of the past than the information economy of the present,'' said the association's president, economist Mark Dadd of AT&T Corp. He said services and high-tech industries are not well measured.
That's critical, the association said, because Congress and the White House use the statistics in making tax and spending decisions, the Federal Reserve uses them in setting interest rates, and private businesses use them in deciding how much to produce, how much to pay employees and where and when to invest.
``If the nation figuratively flies into the economic fog with the radar turned off, the risk of policy errors would rise,'' Dadd said. ``Those most likely to be hurt would be consumers and taxpayers of moderate means.''
Everett Ehrlich, undersecretary of Commerce for economic affairs, said consolidating the agencies is worth considering but warned it would produce far less savings than advocates expect.
Katharine Abraham, commissioner of labor statistics, said: ``Given all the disruption and time and energy that would go into a creating a new structure, unless there's a compelling reason, I wouldn't want to do it.'' She added, ``I haven't heard a compelling case.''
LENGTH: Medium: 60 linesby CNB