February 23, 2012

Did you notice? Congress just transformed unemployment and welfare data.

Yesterday President Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012, which is more commonly known as the payroll tax cut extension.

Buried within the 101-page law are two provisions that impose common electronic identifiers and reporting standards on unemployment and welfare program data at the Departments of Labor and Health and Human Services, respectively. This means that data describing how unemployment and welfare funds are spent will become more transparent - easier to search, sort, analyze, and use.

Section 2104 of the new law requires the Secretary of Labor to designate consistent data exchange standards on information that states, employers, and the federal government must exchange with one another as they administer unemployment assistance programs. Section 2104 specifically directs the Secretary to consider requiring states and employers to submit their unemployment program reports to the Labor Department in XML, instead of using paper, plain text, or PDFs.

Section 4003 does the same thing for the federal Temporary Assistance for Needy Families program. Under this section, the Secretary of Health and Human Services will standardize the data that states must compile and exchange on the administration of the nation's largest social welfare program. And the Secretary must consider imposing XML on TANF reports.

These modest provisions will transform the manner in which Labor and HHS track the administration of crucial state-run programs that spend billions of dollars. Reports that show how much money states and employers are spending will become machine-readable. Each individual data element will have its own electronic tag, which means that federal analysts will be able to compare states and employers against one another, and across time - instantly.

More important, sections 2104 and 4003 signify the start of a much larger movement - a movement from unstructured to structured data, from manual comparisons to instant analysis, and from opacity to transparency. The Digital Accountability and Transparency Act will accomplish this same transformation for federal spending data. The Financial Industry Transparency Act will require financial regulators to junk their plain-text forms and filings in favor of electronically-tagged, database-ready information.

Watch this space for more.
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