September 6, 2012

Which party platform promises data transparency? Neither.

The presidential campaign is in full swing, and each major party has released its platform. The candidates get far more attention. But the platforms, hammered out laboriously by each party's establishment and activists, are the most detailed previews of what the candidates and their parties would try to do if elected.

Does either platform embrace data transparency? The short answer is no. Here's the long answer:

First, take a look at the Democratic platform. The Democratic platform touts President Obama's Open Government Initiative (page 45):
We are committed to the most open, efficient, and accountable government in history, and we believe that government is more accountable when it is transparent. The administration was the first to make public the list of visitors to the White House and create a centralized ethics and lobbying database available to the public online ... President Obama launched the Open Government Initiative to empower the public - through greater openness and new technologies - to influence the decisions that affect their lives. We are committed to using government as a platform to spur innovation and collaboration. Forums such as Data.gov release more information to the public so that the private sector can pioneer innovative new services.
(On page 68, the Democratic platform also mentions the U.S.' leadership of the Open Government Partnership with governments worldwide.)

The Democrats are absolutely right to recognize that government should become a "platform" that allows everyone access to its valuable data. Once the government begins standardizing and publishing its fundamental data compilations, citizens will use them to hold their representatives accountable. Developers will use them to build new high-tech products and services. And the goals of the President's Open Government Initiative are the right ones. The administration is right to establish Data.gov, reach out to developers, and promote smart disclosure.

The trouble is this: the data compilations that are most crucial to true data transparency, especially spending and regulatory, are not being standardized or published. And neither the Open Government Initiative nor the Democratic platform, which cites it, promises to change that.

Spending data. The most valuable information the government generates is its spending data. Standardized, transaction-level financial data would allow citizens to understand exactly what the government is doing and would generate untold business opportunities for software developers.

But federal spending data is opaque. Federal agencies report their spending to at least six different places, and each set of reports is formatted differently. Without standardized identifiers and formats, there is no way to isolate all spending by a particular agency or program, compare different contractors to one another, or compare data reported by agencies with data reported by grantees or contractors. The government does publish some grant and contract spending information on USASpending.gov, but its accuracy is laughably bad, due mostly to the lack of standardization. Internal spending information - salaries, facilities, supplies, travel, conferences, intergovernmental transactions - isn't published at all.

The DATA Act, which Democrats and Republicans in the House passed unanimously last April, and which is sponsored by a Democrat in the Senate, would require the government to standardize and publish all its spending information. But Obama administration opposes the DATA Act. In fact, the administration has refused to provide formal comments to Congress or work toward agreement on any spending data transparency legislation (video - 1:06:20), even though the Government Accountability Office says legislation is necessary (video - 56:00). Twenty-four good-government groups say so too.

Neither the Open Government Initiative nor the Democratic platform offers any plan to standardize and publish all spending data. For instance, the Open Government Initiative's most recent status report includes a section headed "Federal Spending Disclosure." That section highlights Recovery.gov, the successful stimulus transparency platform that serves as the model for the DATA Act. But Recovery.gov only covers stimulus spending and will disappear on September 30, 2013, unless the DATA Act is passed. That section also lauds the inadequate and inaccurate USASpending.gov and OMB's effort to publish spending on IT projects, which is worthwhile, but small-bore. The only other efforts mentioned are websites that publish aggregate totals and estimates. Data transparency requires bulk access to the details.

The Open Government Initiative has not opened spending data. Yet the Democratic platform holds up the Open Government Initiative as the comprehensive solution to the public's need for data transparency.

Regulatory data. The most valuable information the government receives is the huge array of forms and filings that regulated entities submit to dozens of federal regulatory agencies. If these forms and filings were submitted in interoperable formats, regardless of to which agency, and if they used common identifiers for regulated companies, individuals, financial instruments, and other common concepts, regulatory data would give markets their best possible chance of averting future financial crises. And standardization would be good for regulated entities, too. U.S. companies spend thousands of unnecessary worker-hours submitting the same data multiple times to different agencies. Australia and the Netherlands are solving this problem by introducing Standard Business Reporting (SBR), which uses standardization to allow companies to submit the same data just once.

Some agencies are making progress on regulatory data transparency. Financial agencies are adopting the Legal Entity Identifier (LEI), which will allow filings from a company with separate agencies to be searched together. The SEC and the FDIC have electronically standardized a few of their forms using the eXtensible Business Reporting Language (XBRL) format. The SEC's XBRL standard for financial statements lowers the cost of equity capital in the U.S. financial markets by reducing data processing costs. The FDIC, by adopting XBRL for banks' call reports, reduced preparation time from weeks to days, and errors from about thirty percent to about zero.

But, as Australia and the Netherlands show, government-wide regulatory data transparency requires leadership from the top. The White House should be requiring all regulators, not just financial ones, to use the LEI. The White House should be bringing all regulators together to work toward Standard Business Reporting. These things aren't happening, and neither the Open Government Initiative nor the Democratic platform promise to make them happen.

The Democratic platform does not promise leadership on data transparency. True data transparency will require the government to force agencies to change the way they report their finances or standardize the formats of regulatory filings. That's going to be hard work. It will be much harder than writing plans or setting up working groups.

Is the Republican platform any better? No. It's worse.

The Republicans' document never addresses data transparency - the idea that the federal government's information should be published online, using consistent and machine-readable formats - as a distinct concept. Nor does it recognize, as the Democrats do, that "government as a platform" for data can lead to accountability and innovation.

The Republicans do call for "transparency" in specific instances: the tax code (page 2), the budget process (page 4), the Federal Reserve (page 4), the mortgage finance system (page 5),  EPA rulemaking (page 18) and litigation (page 19), financial regulation (page 24), health care offerings (page 33), FDA enforcement (page 34), educational performance (page 35), and the UN (page 45). But nowhere do they acknowledge that the means of reaching government transparency is data transparency.

What should advocates of data transparency do? Neither the Democratic Party nor the Republican Party has incorporated real data transparency into its platform. Neither party has set specific goals or assigned specific responsibilities. Which federal data compilations should be standardized and published? Who should take charge of these tasks?

Neither party has answered these questions. Someone else should.

In the coming weeks, the Data Transparency Coalition will release its first-ever Data Transparency Agenda. Our agenda will explain the need for comprehensive data standardization and publication throughout the government's financial systems, performance tracking, regulatory filings, legislative actions, and judicial materials. It will name names, identifying the compilations and the agencies responsible and showing the reasons why opacity isn't acceptable.

And since neither party has set forth its own data transparency agenda, we'll ask both to pursue ours.

Stay tuned.




1 comment:

  1. This is an incredibly well written and researched article; right on the money in my opinion. I will be following the Data Transparency Coalition in hopes that there efforts will move government data transparency to the forefront of national politics.

    ReplyDelete

Welcome to the official mouthpiece of the Data Transparency Coalition.