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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