Mark Warner Emphasizes The Importance Of The Bureau Of Labor Statistics Amidst DOGE Cuts

Forbes Breaking News

During Wednesday’s Senate Banking Committee, Sen. Mark Warner (D-VA) questioned Federal Reserve Chair Jerome Powell about the Bureau of Labor Statistics.

Transcript

00:00It's funny, Senator Kennedy, I didn't interpret his comments that same way.

00:04Oh, I'm sorry.

00:05I would also say that, one, thank you, and we echo what Senator Reid said, thank you

00:09for your independence and doing the job.

00:12At the end of the day, I think tariffs are a tax and they're going to hit, I think, starting

00:20next quarter.

00:22And again, I think the reciprocity argument, that would be a nice goal, I guess.

00:28I hope we can then explain to the Australians, who are a strong ally of us, who we have a

00:35free trade agreement, so we don't have tariffs, who we have a trade surplus with, who I'm hoping

00:41we're going to be able to build jointly submarines, why they, with all those things, still got

00:46whacked with a 10% tariff.

00:48Doesn't seem rational or logical to me, but let me get to, I've been very concerned about

00:54some of the Trump administration's, I think, mismanagement of the federal workforce.

01:01I can tell you some of the doge approach in the national security and intel world, cuts

01:06are having dramatic effects.

01:09But today I want to mention something that, frankly, doesn't get a lot of attention, a very

01:12small entity, the Bureau of Labor Statistics.

01:16U.S. economic data, which has always been independent, it's really been viewed as the gold standard

01:24across the globe.

01:26And frankly, the BLS data often is the guidepost that investors use regularly.

01:31BLS helps us get information about cost of living increases, policy making for you guys,

01:39it's used to adjust payments on the roughly $2 trillion in treasury bonds.

01:46The truth is that the BLS data shouldn't be degraded on any basis, yet the administration

01:56is so dramatically, and I hope my Republican colleagues will hear on this, cut back the staffing

02:00at BLS that the BLS has had to significantly cut back on the collection of critical price and

02:07inflation data.

02:09Normally, BLS staff, when you don't have all the data collected, will estimate about 10%

02:19of the inputs into the CPI.

02:21Now with these cutbacks, they've had to estimate close to 30% of the data.

02:26That means faultier data.

02:30How can we grapple with this, and what does the undermining and staffing shortages at a BLS

02:36mean in terms of your ability at the Fed to do your job?

02:39You know, we can still do our job.

02:41I would not want anyone to think that the data have deteriorated to a point where it's difficult

02:47for us to understand the economy as well as we can understand it, which is not perfectly.

02:52But the direction of travel is concerning.

02:54You know, the U.S. has been a leader globally in investing in how to measure the output of

03:03a modern economy, which is something that we've led the world in for a long time.

03:09And it really helps not just policymakers but also businesses if we have accurate information

03:13about what's going on in the economy.

03:15You're making decisions based on that economy, not just the Fed, not just you, but private

03:20companies as well.

03:21So I think it's something we should continue to invest in.

03:27And I don't like to see any deterioration in the public data, which has been the gold

03:34standard.

03:35The BLS, Bureau of Labor Statistics, and others have really been the bedrock that people really

03:40do look to as solid data that tells us what's happening in the economy.

03:43And these people who do collect this input, who do some of this analysis, they are experts.

03:49They are not fungible.

03:51You fired one and hire another.

03:53I mean, there's an expertise here that has been, I think, being undermined.

03:57And again, you just look at the fact that if you have to do your estimates, move up from

04:02about 10 percent estimate to a 30 percent estimate, that is not good for the markets.

04:07Let me move to one other topic in my last minute.

04:11Stress tests, really important.

04:13Those of us who are involved in Dodd-Frank, really important as we try to particularly think

04:16about the most significant banks.

04:20But there has been concern.

04:21I've shared some of this concern that the stress test process was so opaque that while

04:30the regulators may fully have understood, sometimes the very banks being regulated didn't understand

04:36fully the criteria.

04:37I know you're taking a look at how we can bring more transparency to the process.

04:41When do you think we'll see that and what kind of changes you think we'll make?

04:43Well, later this year, we've said that we're going to, you know, fully disclose the models.

04:49And you know, that's the main thing.

04:51If you're going to set, it's like the IRS, you know, if you're going to charge people taxes,

04:56you have to have the transparency about what that is.

04:58It's going to be the same as that.

04:59We're going to show how the calculations are made.

05:03And we're working on all that right now.

05:04We're also going to, we have a proposal out to sort of smooth the results of the test from

05:09year to year.

05:11So this is something we're working on hard and expect to have important progress later

05:17this year when we begin to publish the models.

05:19I'm anxious to see it.

05:20Thank you, Mr. Chairman.

05:21Senator Ricketts.

05:22Yes, sir.

05:23Thank you, Mr. Chairman.

05:24Thank you, Mr. Chairman.

Category

Transcript

Recommended