(Updates with elimination of regional economic data in 15th paragraph. For more on the budget debate, see EXT7.)
March 1 (Bloomberg) -- A program tracking U.S. green jobs that was faulted by Republican lawmakers will be scrapped by the Bureau of Labor Statistics as part of automatic budget cuts set to take effect today, according to a person familiar with the decision.
The move is a harbinger of program reductions that may occur across the government following the $85 billion in across- the-board cuts, known as sequestration, for the current U.S. fiscal year.
Their cumulative effect won’t be immediately apparent.
“Sequestration will finally swing into effect tomorrow, causing flags to stop fluttering, soldiers to run barefoot, and bullets to halt in midair,” Yair Reiner, an analyst at Oppenheimer & Co. in New York, said in a note to investors yesterday.
“Well, not exactly,” Reiner said. “As large and painful as the sequestration cuts are likely to be, their impact will take weeks, months, and in some cases years to play out.”
Congress and President Barack Obama’s administration remain far apart on how to replace the cuts, part of $1.2 trillion in across-the-board spending reductions to begin this year and be spread over nine years.
Defense programs will absorb about half of the cuts. The Pentagon has warned that as many as 750,000 civilian workers may be forced to take unpaid leave averaging one day a week in furloughs that wouldn’t begin until April 25. Today, Defense Department managers are to submit lists of essential employees they propose exempting from the furloughs.
“Not everything will happen Day One,” Pentagon spokesman George Little told reporters yesterday. “But we’ll have to make some very quick decisions about programs that we may have to pare back.”
Defense spending fell 22 percent in the fourth quarter of 2012, the largest drop since 1972 following the Vietnam War. The cuts are keenly felt.
“It is absolutely affecting us,” Kenneth Moore, a vice president for Advatech Pacific Inc., a closely held engineering firm based in San Bernardino, California, said in an interview.
Early this year, Advatech Pacific expected to share in a $400,000 order for military communications gear. The contract still hasn’t been let and has been cut to “a fraction,” Moore said. One-third to half of Advatech Pacific’s workers have taken delays in pay, or days off without pay, he estimated.
Sequestration could cost more than 2 million jobs, with about half of those drawn from defense workers, contractors and their suppliers, according to an estimate in September by Stephen Fuller, an economist with George Mason University’s Center for Regional Analysis in Arlington, Virginia.
“The furloughs that could happen wouldn’t take place until April,” because of the need to provide notices to affected workers, Fuller said in an interview yesterday. “Tomorrow or next week most citizens won’t notice there’s a sequester, other than what’s in the newspaper or on television.”
Government agencies including the Commerce and Labor departments, will discontinue some economic data collection. Commerce, which houses the Bureau of Economic Analysis, will eliminate a tool used to measure regional economic activity, according to a person familiar with the decision.
The Regional Input-Output Modeling System supplies data that researchers and economists use to measure the impact of a localized event -- such as a hurricane or political convention - - on a particular industry. Commerce charges a fee for the data, though the system doesn’t pay for itself.
Major economic indicators tracked by Commerce, including those used to measure gross domestic product, won’t be affected by the cuts, the person said.
In a Feb. 26 e-mail to employees, the Labor Department’s statistics unit said a clean-energy survey, which according to Republicans included everything from oil lobbyists to drivers of hybrid buses, would be one of three data reports canceled because of the cuts, according to the person who asked not to be identified because the announcement wasn’t official.
Gary Steinberg, a BLS spokesman, referred questions to the Labor Department about the discontinued data reports. Labor spokesman Steve Barr didn’t respond to a request for comment.
The BLS also will discontinue reporting on mass layoffs and international labor comparisons, and trim spending on travel, bonuses and training.
The cuts disappointed clean-energy advocates who say wind, solar and other renewable-energy industries are among the fastest-growing in the U.S. The department released its first industry survey in 2012, finding at least 3.1 million Americans had green jobs.
“It’s a huge loss,” said Bracken Hendricks, a senior fellow at the Center for American Progress who wrote a book on green energy. “This means the U.S. will be flying blind on the growth of a very, very important sector in the U.S. economy.”
If the clean-energy industry’s rate of growth outpaces other segments of the economy, it will still fall short of Obama’s goal for added jobs -- a point Republicans have emphasized in attacking the administration’s economic recovery efforts.
During the 2008 campaign, Obama said green energy could produce about 5 million jobs in a decade. The 2009 economic stimulus, which provided about $90 billion in loans, grants, and tax breaks for clean-energy programs, created about 225,000 jobs by 2010, the White House has said.
John Berlau, a senior fellow at the Competitive Enterprise Institute, a free-market research group in Washington, said cutting the programs was “wise” and said their absence would “leave the American people none the poorer.”
“It is inherently subjective because there is no standard definition of what a green job is,” Berlau said. “When an employment survey starts from the premise that some jobs are better than others, it is propaganda.”
Republicans including Representative Darrell Issa of California, chairman of the House Oversight and Government Reform Committee, have criticized the administration for overselling the promise of renewable energy as a source of new jobs.
“This was never a real report, but rather propaganda designed to advance a misleading political narrative,” Issa said in an e-mailed statement. “From its inception it was an abuse of taxpayer dollars and it’s unfortunate it took the sequester to make the Administration realize it.”
-- With assistance from Tony Capaccio, David Lerman and Jim Snyder in Washington. Editors: Jon Morgan, Steve Geimann