Obama pushes agency consolidation plan for savings

President Barack Obama has asked Congress for authority to consolidate six federal agencies, including the Small Business Administration, into a single cabinet-level agency overseeing trade and business. The reorganization could eliminate 1,000 jobs and save $3 billion over 10 years, the administration says.

“The needs of our citizens have fundamentally changed but their government has not,” Obama said in his Jan. 13 remarks in a streaming video presentation at White House.gov/live. “Instead, it has often grown more complex. Today, I am calling on Congress to reinstate the authority that past presidents have had to streamline and reform the executive branch. This is the same sort of authority that every business owner has to make sure that his or her company keeps pace with the times. And let me be clear: I will only use this authority for reforms that result in more efficiency, better service and a leaner government.”

Obama wants to combine the functions and staff of six agencies and offices -- the Small Business Administration, Office of the U.S. Trade Representative, Export-Import Bank, Overseas Private Investment Corporation, and the Trade and Development Agency. The main goal of the effort is to reduce regulation for small businesses, help small business succeed, and save tax dollars by eliminating redundant functions, such as human resources, among the agencies.

As part of the plan, Obama plans to name SBA Director Karen Mills to a cabinet-level position to head the reorganized agency, something federal CIO Steven VanRoekel called “a great move” in a Jan. 13 speech hosted by the Association for Federal Information Resources Management.

The proposed reorganization could turn out to be “very significant” but nowhere as complicated or big as the one leading up to the creation of the Homeland Security Department, said John Palguta, vice president of policy at the Partnership for Public Service.

“Even if you’re in private business, a reorganization requires lots of planning. communication and workforce involvement from employees," he said. "It also requires clear vision and purpose."

The idea is not a bad one, but will be difficult to realize, he continued. “Employees will worry but it’s a bit premature to worry too much. At the end of the day, employees will continue to have jobs, if they want to have jobs, and agency missions will continue to be done.”

If the proposal gets approval from Congress, it is very important for agencies to keep the lines of communication open and involve employees in all stages of the consolidation process, Palguta said.

Employees who work in the agencies that could be consolidated and have concerns about losing their jobs shouldn't worry as “there are plenty of ways of reduce the workforce in a humane way,” Palguta said.  The real impact would be more of an emotional one as employees get vested in agency missions and feel pride in the work they do for a specific agency, he said.

In a Jan. 13 conference call with reporters, Jeff Zients, deputy director for management at the Office of Management and Budget, call the proposed reorganization the next critical step to streamlining government in a wider effort to save money and make it more efficient.

Once Obama has this consolidation authority, Zients said, there will be subsequent proposals that address fragmentation within the government and further initiatives to achieve cost savings and increase efficiency.

But for now, the effort might not be an immediate money saver. As seen with similar efforts, the initial years of the reorganization will require upfront investment and will need special appropriations from Congress to fund the project, Palguta said.

About the Authors

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Camille Tuutti is a former FCW staff writer who covered federal oversight and the workforce.

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Reader comments

Wed, Jan 18, 2012 Fed Up Fed

"And let me be clear: I will only use this authority for reforms that result in more efficiency, better service and a leaner government.”

Which ignores the very real risk to abuse of additional granted powers by future office holders (if he even honors this promiss personally).

Wed, Jan 18, 2012

I thought this was going to be a Commerce Dept reorg but it seems not to be the case Too bad there are several very small agencies and bureaus that could have been included

Tue, Jan 17, 2012 Jack

Consolidation must go much further. I'd like to see a focus on consolidating all efforts across private industry as well. There is a lot of waste and duplication out there as well. Think of all the iPad knockoff attempts by HP, Acer, etc, etc. Consider the worthless products such as pet rocks and rubber band animal bracelets, or any Adam Sandler movie. There should be a commission that determines the worthiness and value of products and services made available to the American public, and it should not be swayed by people's willingness to spend money on it. Sorry but priorities are just too warped. Because a product will be bought by a fool and his money, should not in itself justify the application of resources for its production. There are simply too many examples of products and services that the market should not be allowed to artificially support. We always look at government to trim, which is not a bad thing, but we always assume that the market will manage it's own wastefulness and that's simply not true. A company that produces something of little to no real value to mankind is held in much higher esteem than a governmental operation that has nothing but the public interest as it's intent.

Tue, Jan 17, 2012

This is good, but small thinking. I would suggest we consolidate all goverment and the three branches into a single office located somewhere in Scranton, Pa. Oh that's right it already exists, Dunder Mifflin.

Tue, Jan 17, 2012 David Oxford, AL

First, cost savings are achieved by having fewer "Chiefs." Less in overall operating budgets, and maintenance costs. As for moving 1,000 people, yes they will be offered positions in another agency, and perhaps in another location. They can choose to accept that position or not. There is also a program called "Save pay" which is good for two years, after that if you have not been put into a commensurate grade, you will revert backwards. As for DHS, here is a sterling example of our government's failure at combining organizations. Many of the functions of DHS are duplicative, and provide little to the greater IC effort. The dismanteling of this organization would save untold billions in US tax payer money. They could start with TSA, and work through the rest of the organization.

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