Obama’s Plan for Reorganizing Agencies Hits Skepticism From Lawmakers

President Barack Obama’s request for authority to streamline U.S. executive agencies was greeted with skepticism from congressional Republicans while Democrats questioned elements of his reorganization plan.

The president said yesterday he wants to be able to undertake any consolidation that would save money and shrink government, subject to a “fast-track” vote of approval or disapproval by Congress in 90 days.

He said his first action would be replacing the Commerce Department with a yet unnamed agency that folds in the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corp., the Trade and Development Agency and the Small Business Administration.

“The government we have is not the government that we need,” Obama said yesterday at the White House. “Our economy has fundamentally changed -- as has the world -- but our government, our agencies, have not.”

Obama’s proposal would require action from Congress, where Republicans have stalled much of his agenda in the past year. It’s also coming as both parties are gearing up for November’s elections that will decide control of the White House, the Senate and the House of representatives.

Susan Schwab, who was U.S. Trade Representative under President George W. Bush, said Obama will have a tough time getting cooperation from lawmakers.

“It’s obviously hard to imagine a president whose campaign is focusing on running against Congress then going to get fast- track legislation from Congress,” Schwab said in an interview.

‘Worth Exploring’

Brendan Buck, a spokesman for House Speaker John Boehner, an Ohio Republican, said eliminating duplication and making government more business friendly “is always an idea worth exploring.”

Still, he said, “Given the president’s record of growing government, we’re interested to learn whether this proposal represents actual relief for American businesses or just the appearance of it.”

Several key Democrats reacted cautiously, saying they wanted to see the details. They also expressed concern over Obama’s request for an up-or-down vote on any reorganization plan without giving lawmakers the opportunity to make changes.

Michigan Representative Sander Levin, the senior Democrat on the Ways and Means Committee, said Congress should consider Obama’s request.

Role for Congress

“As we do so, we must ensure a meaningful role for Congress on all reorganization proposals at every juncture,” Levin said in an e-mailed statement.

Obama’s proposal to move the U.S. Trade Representative’s office into a new department drew bipartisan objections from the chairmen of the committees that oversee trade policy.

“Taking USTR, one of the most efficient agencies that is a model of how government can and should work, and making it just another corner of a new bureaucratic behemoth would hurt American exports and hinder American job creation,” Senate Finance Committee Chairman Max Baucus, a Democrat, and House Ways and Means Committee Chairman Dave Camp, a Republican, said in a joint statement.

Schwab also was critical of moving the USTR. The trade representative’s office is “one of the few things that actually works,” she said.

Obama asked lawmakers to restore executive authority to streamline the executive branch granted during the Great Depression and last held by President Ronald Reagan to reorganize agencies.

SBA Chief

For the time being, Obama said he is elevating the head of the Small Business Administration, Karen Mills, to Cabinet rank, a move that doesn’t require congressional approval.

The consolidation effort could lead to the loss of 1,000 to 2,000 government jobs, which would be achieved through attrition, according to Jeffrey Zients, the deputy budget director, who was tapped to lead the effort to develop a proposal. The goal is to save $3 billion over 10 years.

Zients said the new department will consist of four units: trade and investment, including enforcement, financing and promotion; small business and economic development; technology and innovation, including the patent office; and statistics.

The statistics division would house the Bureau of Labor Statistics, which reports monthly unemployment figures, and the Bureau of Economic Analysis, which tracks such data as gross domestic product, consumer spending, corporate profit and the balance of trade.

Next Steps

If Congress grants Obama the authority, he would follow the reorganization with additional consolidations to address “other areas of fragmentation and inefficiency across government,” Zients said.

Gary Hufbauer, a senior fellow with the Peterson Institute for International Economics in Washington, said the changes could eventually boost trade, though it would take a while to sort out the bureaucracies.

“I think it would help your trade performance, Hufbauer said. “For most companies that have an issue with the government, it’s one-stop shopping.”

Obama first proposed a reorganization in last year’s State of the Union Address. The president yesterday cited several examples of duplication, including five entities that deal with housing and more than a dozen involved with food safety.

“No business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations,” he said.

The National Oceanic and Atmospheric Administration, which Zients said accounts for more than half of the Commerce budget, would move to the Interior Department.

The Government Accountability Office said in March 2011 that U.S. economic-development programs are “fragmented” and their efficiency and effectiveness are “unclear.” For example, some 52 federal programs can fund “entrepreneurial efforts,” GAO found.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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