Obama seeks power to merge agencies for efficiency's sake

Obama called on lawmakers to grant him broad new authority to propose mergers of government agencies, which the Congress would have to approve or reject in an up-or-down vote.

The president, announcing the plan at the White House, said he would begin his pruning exercise by folding the Small Business Administration and five other agencies involved in trade and business, into a single agency that would replace the Commerce Department.

The White House said the consolidation would save $3 billion over 10 years and result in the elimination of 1,000 to 2,000 jobs, though he said those reductions would occur through attrition rather than layoffs.

"From the moment I got here, I saw up close what many of you know to be true: The government we have is not the government we need," Obama told an audience of small business owners.

It is not clear whether Congress, which has blocked the bulk of Obama's legislative agenda, will go along with the initiative. White House officials said no president since Ronald Reagan has had the so-called consolidation authority Obama is seeking.

Republicans were immediately skeptical. They suggested that the White House was more interested in honing its re-election message than in reducing the size of government.

"Yesterday, President Obama asked for a $1.2 trillion increase in the debt limit, today he is proposing to shrink the federal government," said Sen. John Cornyn, R-Texas. "Unfortunately, President Obama does not have much of a record to back up his newfound, election-year enthusiasm for limited government."

A spokesman for House Speaker John A. Boehner said that Republicans would take a look at the plan.

"We hope the president isn't simply proposing new packaging for the same burdensome approach," said the spokesman, Brendan Buck. "However, eliminating duplicative programs and making the federal government more simple, streamlined, and business-friendly is always an idea worth exploring. We look forward to hearing more about his proposal."

By putting the onus for streamlining government on Congress, however, Obama was seizing a core issue of Republican presidential candidates like Mitt Romney -- the inexorable growth of the federal government -- and trying to turn it to his own political advantage.

It was the latest sally by the president, who has gone on the offensive against Congress as he embarks on his re-election bid. He appointed a new head of the Consumer Financial Protection Bureau, Richard Cordray, as well as other appointees to regulatory agencies, during a congressional recess, to get around the opposition of lawmakers.

Under the terms of the reorganization proposed Friday, six relatively small agencies -- the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corp., and the Trade and Development Agency -- would be consolidated into a single agency focused on opportunities for the private sector.

The administrator of the Small Business Administration, currently Karen G. Mills, would be elevated to the Cabinet.

To illustrate the tangled maze of government services for businesses, the president gestured toward a screen behind him that showed the dozens of websites, offices and customer service centers that a company must contend with, many with overlapping functions.

Obama championed the goal of streamlining government during his State of the Union address last year. On Friday, he cited an example of duplication from that speech: The Interior Department oversees salmon in fresh water, while the Commerce Department has jurisdiction over them in salt water.

The president said he would use the consolidating authority only for bureaucratic reorganizations that cut costs and made the government more efficient. And he challenged Republican lawmakers to support an idea that they themselves have embraced.

"With or without Congress, I'm going to keep at it, but it would be easier if Congress helped," Obama said. "This is an area where we should receive bipartisan support because making our government more responsive and strategic and leaner should not be a partisan issue."

One government efficiency expert, Jitinder Kohli, applauded the move.

"These efforts to rationalize government are long overdue, frankly," said Kohli, a senior fellow at the left-leaning Center for American Progress. "In fiscally tight times, it's even more important to think carefully about how to deliver savings — and that includes making websites easier to use, providing single points of entry and streamlining."

"In the world of business, reorganization happens all the time, for good reason," Kohli added. "The world changes around businesses, and businesses change to better serve the world. But the government is far, far less nimble."

Still, a body of research throws cold water on the notion that such reorganization leads to lower head counts, more effective departments or cost savings.

"The most important considerations are the costs in wasted time while they do the reorganization, how this changes the politics of the affected agencies in relation to Congress and other executive branch agencies, and how specific the purported benefits of consolidation are," said Steven M. Teles, an associate professor of political science at Johns Hopkins University. "My gut tells me those benefits will end up being much smaller than advertised, and the costs much larger."

Daniel W. Drezner, a professor of international politics at Tufts, said "This is one of those ideas that looks great in abstract. But you're talking about merging the organizational cultures of five or six agencies. It takes a long time for efficiencies and synergies to work out. They're not going to play well for a while."

Nonetheless, Drezner said that having a single body devoted to export promotion made sense.

"If you look at American exports, it's dominated by big business," he said. "If you want small and medium enterprises to get more involved in exporting" — a goal of the Obama administration — "having small business and the trade office in the same agency makes sense. So this could be a boon for that."

Susan C. Schwab, who served as a U.S. trade representative during the Bush administration, agreed that the move might improve export promotion. But she said that it might do so at the expense of broader trade policy.

"You'd take a small, very efficient agency and have it totally swallowed up by this behemoth," said Schwab, who is now a professor of public policy the University of Maryland. "From a trade policy perspective, it makes no sense at all."

Schwab added, "Trade policy involves so many different sectors of the economy, and U.S. interests. It's foreign policy. It's manufacturing. It is services, agriculture, consumers, labor, the environment, intellectual property."

An agency without a strong trade representative, she said, could end up giving "short shrift" to some concerns.