The GIGO Effect, FDA's Budget, and FDA Spending

Back in the early days of computing, it was common to hear the term GIGO (meaning “garbage in, garbage out”) applied to all kinds of data analysis. Although I haven’t heard the phrase used recently, we are not safe from erroneous conclusions drawn from elegant-seeming analysis of useless or misinterpreted information.A case in point is the report released this week by the Regulatory Studies Center at the George Washington University and colleagues at Washington University in St. Louis. According to a column in the Regulations Blog of The Hill newspaper:

A survey of federal budgets devoted to developing and enforcing regulations found that many agencies will spend more in 2013 and 2014 than in previous years, indicating that the writing and enforcing of new regulations is largely unimpeded by the massive cuts, known as sequestration.

That certainly sounds authoritative ... until you look at the analysis and realize that the authors apparently know nothing about the federal budget and have used inherently unreliable source material in calculating FY 13 and FY 14 spending levels. It’s pure GIGO -- and one can only hope that they know more about regulatory policy than they do about federal budgets.The first (of many) errors is the use of the proposed spending levels in the FY 14 President’s Budget Request as the measure of what agencies will have to spend in fiscal year 2014. One immediate and substantial error from this methodology is that FDA’s “regulatory growth” is calculated by including the President’s request for more than $200 million in food user fees, for which, at least to date, there is no Congressional effort to enact.

More broadly, no one really knows what the actual FY 14 spending levels will be. They are dependent on resolution of the difference between the House and Senate budget bills (about $90 billion in FY 14 discretionary spending), the actual spending levels adopted by Congress in appropriations bills, the vagaries of funding under (likely) continuing resolutions, and the very real threat of yet another sequester in FY 14. Most federal agency heads would be exceedingly grateful to wind up with as much money as the President requested for them.The study’s assertions about the FY 13 spending levels are equally unfounded. The GW/Washington University report uses estimated “outlay” numbers contained in the appendix to the President’s FY 14 budget. Since these tables were compiled before the passage of the FY 13 Ag/FDA appropriations or the final FY 13 continuing resolution, the GW study is using estimates based on the President’s FY 13 request (as ungrounded in reality as the FY 14 request), perhaps modified by part-year CRs passed in late 2012.

In short, the actual FY 13 spending levels were not used in the analysis (indeed, weren’t even determined at the time of the President’s FY 14 budget request). Here’s the further problem: the numbers in the report (themselves unreliable) are unadjusted for the subsequent rescission and sequester. How can the authors conclude that “agency spending levels for regulation have increased modestly despite sequester,” without having reliable numbers that reflect the sequester?Mark Twain once observed:

There is something fascinating about science. One gets such wholesale returns of conjecture out of such a trifling investment of fact.

Thinking of the GW study, I can only say “Amen."

Note: This analysis and commentary is written by Steven Grossman, the Deputy Executive Director of the Alliance for a Stronger FDA.