President proposes government reorganization

As I noted in an earlier posting, last year's State of the Union contained a sleeper issue: the consolidation of trade and economic agencies. This morning, the President released his proposal. Actually, he asked for Congress to reinstate re-organization authority that lapsed in 1984. That authority would allow to present a re-organization plan to Congress for an up or down vote. Thus, he couched this as a good government issue -- one of shrinking the bureaucracy and reforming government.

His first general proposal is specifically targeted at making government more business friendly. The proposal would consolidate the Small Business Administration (SBA), the Office of the United States Trade Representative (USTR), the Export-Import Bank (Exim), the Overseas Private Investment Corporation (OPIC), and the Trade and Development Agency (TDA) with core trade and economic functions of the Commerce Department. These seems to come straight out of a report from the Center for American Progress on competitiveness from December 2010 (see earlier postings). In addition, he took immediate action to elevate SBA to a Cabinet-level.

I am a scarred veteran of the last attempt to reorganize the Commerce Department to create a Department of Trade and Industry in the late 1980s. I learned a number of lessons from that experience. One is the power of the resistance to change. Each of the existing agencies has its own set of constituencies and allies on Capitol Hill.

Besides the resistance to change, the other problem is that there are many possible permutation to the new structure -- although some are better than others. There is no way to completely pull all the competitiveness related programs into one Department. For example, what about worker training and education programs in the Labor and Education Departments? In addition, what does the new structure do about the Census Bureau and NOAA (National Oceanic and Atmospheric Administration) now currently in Commerce? Also it is unclear how the elevation of the SBA to a Cabinet position interacts with the consolidation proposal. Since the idea of the elevation of SBA is to "put small business at the table." The consolidation would probably then take that seat away by folding SBA into a larger (Commerce?) Department. The President's proposal doesn't address these issues. [UPDATE: The Washington Post reports that NOAA (including the Weather Service) would be moved to the Interior Department while the Census Bureau and the Bureau of Economic Analysis (BEA) would remain in the new Department and be joined by the Bureau of Labor Statistics. According to a Wall Street Journal story, SBA would lose its new Cabinet-level status when the consolidation happens.]

This being an election year, it is unclear that the President's request for "consolidation authority" is going anywhere. This Congress does not seem inclined to give the President any additional powers. Even if there wasn't a partisan divide, there is still the institutional divide based on a strong desire on Capitol Hill to preserve Congressional powers.

But there might be another sleeper in the announcement. At the very end, it states:

We will also be unveiling a new website: BusinessUSA. This site will be a virtual one-stop shop with information for small businesses and businesses of all size that want to begin or increase exporting.

My hope is that this is a consolidated website -- not just one for companies that want to "begin or increase exporting." After all, after complaining about there being a confusing number of websites, the answer is not to propose another specialized website.

Frankly these type of steps toward coordination and better information flow strike me as a better way to go. Let me go back to an issue I raised with respect to the creation of the Department of Homeland Security and the Bush Administration's proposal for financial regulatory consolidation (see earlier posting). In an age of increased emphasis on collaboration, flattened organizations and multi-organization cooperation, is creating a new bureaucratic structure the right answer? As the importance of interconnections and multiple points of view grows, does it make sense to create a Department of Everything Department? Shouldn't we be creating networks to tie the agencies together instead? The government is full of coordinating groups. Maybe it is time to look seriously in to making those work better rather than rearranging the organizational boxes.