Analysis: Government reorganization ‘challenging terrain’ for Obama

President Barack Obama has asked Congress for the power to merge federal agencies in an effort to make government more efficient and consumer friendly. Obama wi...

President Barack Obama’s proposal to fold six agencies that focus on business and trade into one is receiving both kudos and warnings from outside experts.

Navigating the federal government’s various commerce-related services has been a headache for businesses, said University of Maryland School of Public Policy Dean Don Kettl.

Agency merge

The administration’s plan involves the merging of six federal agencies and departments, including the:

  • Commerce Department’s “core business and trade functions”
  • Small Business Administration
  • Office of the U.S. Trade Representative
  • Export-Import Bank
  • Overseas Private Investment Corporation
  • Trade and Development Agency

“The Commerce Department is a strange animal,” he said. “As time has gone by, it has become a hodgepodge.”

More than half of the agency’s budget is dedicated to the National Oceanic and Atmospheric Administration, which focuses on weather, not business. The White House wants to move NOAA to the Interior Department and merge the remaining functions of the Commerce Department with five other agencies, including the Small Business Administration.

“It’s a good move in the right direction,” Kettl said.

Will trade agencies suffer?

But others fear that the unique functions of each agency could suffer if they’re combined into a larger entity and lose their autonomy.

Initial concerns focused on trade-related components, particularly the U.S. Trade Representative, a small independent agency that would be folded into the new one.

“Either U.S. manufacturing interests would find themselves without an advocate because that agency would have to balance all of these other perspectives,” said Susan Schwab, who served as the trade representative under President George W. Bush, “or you would have U.S. trade policy heavily weighted in favor of industry interests and not paying sufficient attention to foreign policy, labor or agriculture.

Export functions could be streamlined more easily, she said, but those are scattered among several agencies, including the Agriculture Department, which is not part of this proposal.

The Trade Representative would remain part of the president’s Cabinet even if the merger went through, according to the White House. Obama announced that the head of the Small Business Administration, Karen Mills, would also become a Cabinet member, despite plans to include that agency in the consolidation.

Plan faces a reluctant Congress

By the numbers

  • The plan would merge 6 trade- and commerce-related agencies into 1 cabinet-level department.
  • The consolidation authority Obama sought guarantees an up-or-down vote by Congress within 90 days.
  • The White House says the plan would save $3 billion over 10 years
  • The plan would cut 1,000-2,000 jobs through attrition

The White House said this could be the first of several efforts to consolidate agencies and streamline services, but the President needs Congress’ approval first. Obama is asking lawmakers to reinstate a consolidation authority that a Democratic Congress abolished during the Reagan years.

Kettl said it won’t be any easier this time.

“The executive branch is much more the product of Congress than of the president,” he said. “They’ve been very reluctant to give the president the ability to change who’s in charge in Congress, of overseeing which programs.”

Compromises have been clumsy. The Homeland Security Department enveloped 22 components. But the agency continues to report to roughly 100 congressional subcommittees.

The often overlooked creation of the National Counterterrorism Center has been more successful, said The Partnership for Public Service Executive Director Max Stier. It has increased coordination among the intelligence community.

Reorganization a ‘pain in the butt?’

Stier said certain criteria would dictate success.

“You need clear metrics, leadership, continuity of focus, and a true partnership among stakeholders for this stuff to work,” he said.

In this election year, however, politics will likely make that difficult. As the specter of reorganization lingers ahead, employees’ morale may suffer.

“Reorganization proposals are a pain in the butt,” said Schwab, the former trade representative. “They are demoralizing. They take up a huge amount of time and energy and they usually don’t happen.”


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