Obama tries to seize the mantle of small government from Republicans

President Obama, looking to make the federal government "leaner, smarter and more consumer-friendly," asked Congress Friday for the authority to merge six trade and commerce agencies as part of a broader effort to rebuild the government for a "21st century economy."

Speaking at the White House before a crowd of small-business owners, Obama pledged to streamline and reform the executive branch, and asked Congress to reinstate an authority — last used by former President Reagan — to put his proposal in action.

“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 said. 

“We live in a 21st century economy, but we’ve still got a government organized for the 20th century. Our economy has fundamentally changed — as has the world — but our government, our agencies have not. The needs of our citizens have fundamentally changed but their government has not. Instead, it has often grown more complex."

Obama is asking lawmakers to grant him a reorganizational power that would let him propose mergers that would save the government money. The House and Senate would then decide whether to approve his ideas in an up-or-down vote in 90 days.

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The president's proposal is an attempt to put Republicans on the defensive in an election year by forcing them to choose whether to support something they have long stood for — reducing the size of government and cutting spending. The plan could help Obama counter charges from the GOP that he is a big-government liberal who has tried to expand the bureaucracy during his term in office.

It also mirrors the dynamic of the the payroll fight late last year, when the GOP had to choose whether to support Obama's plan to extend a tax cut, the Republican Party's signature issue. 

But by putting his own small-government plan forward, the president also risks emboldening the GOP to move forward with bigger reductions to government that Democrats would likely oppose.

One of Obama's proposals would be to merge six major operations that focus on business and trade: Commerce Department's core business and trade functions, the Office of the U.S. Trade Representative, the Small Business Administration (SBA), the Export-Import Bank, the Overseas Private Investments and the Trade and Development Agency. Obama is looking to have all of those operations merge into one agency.

“Six is not better than one," Obama said. "It produces redundancy and inefficiency.”

A spokesman for Speaker John Boehener (R-Ohio) welcomed Obama's proposal but questioned his commitment to reducing the size of government.

“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," Boehner spokesman Brendan Buck said in a statement. "American small businesses are more concerned about this administration’s policies than from which building in Washington they originate. We hope the President isn't simply proposing new packaging for the same burdensome approach. 



"However, eliminating duplicative programs and making the federal government more simple, streamlined, and business-friendly is always an idea worth exploring," he continued. "We look forward to hearing more about his proposal."


In brief remarks, Obama pointed out that there are five different organizations and more than a dozen federal agencies that deal with housing.

He repeated what he called his “favorite example” of absurdity in government, first mentioned in last year’s State of the Union address. “As it turns out, the Interior Department is in charge of salmon in fresh water, but the Commerce Department handles them in saltwater,” he said to laughter from the audience of small-business owners. 

“No business or non-profit leader would allow this kind of duplication or unnecessary complexity in their operations,” Obama said. “So why is it OK in our government? It’s not. It has to change.”

Consumers have been dealing with unnecessary bureaucracy since Congress stopped granting the reorganizational authority in 1984, Obama said.

“Go talk to the skilled professionals in government who are serving their country — some of the hardest-working folks you’ll find anywhere — and they’ll tell you that their efforts are constantly undermined by an outdated bureaucratic maze,” Obama said. “Go talk to the Americans — including, I know, a lot folks here today — who deal with the government on a regular basis, and they’ll tell you that it’s not always the highlight of their day.”

Obama said while he’s taken steps to prevent unnecessary overlapping in government, “we need to do more. We need to think bigger.”

A plan to streamline and reorganize the executive branch has been in development at the Office of Management and Budget (OMB) for many months, a source told The Hill.

Under the proposal, the National Oceanic and Atmospheric Administration (NOAA) — currently part of Commerce — would move to the Interior Department. 

The plan would also make an addition to the president's circle of senior advisers: Karen Mills, the SBA administrator, would join the Cabinet.

“The government we have is not the government we need," said Jeffrey Zients, deputy director for management and chief performance officer at OMB. "The last reorganization of the whole government was done by Herbert Hoover. Since then, agencies have been layered on top.”

He said that the president, like any chief executive, "needs the ability to streamline and modernize operations."

Asked why the administration needs to ask for the consolidation authority, since the Bush administration did not have it when it created the Department of Homeland Security after the 9/11 attacks, Zients said Obama is tackling a different challenge. 

Homeland Security was created "in a period of crisis," Zients said. Streamlining agencies, as Obama has proposed, "is more difficult to do."

He said the streamlining plan would give businesses large and small easier access to federal services. And White House press secretary Jay Carney reiterated that the proposal would help "save government money."


On a call with reporters on Friday afternoon, Zients said the White House — before proposing the initiative — met with lawmakers and their staffs on Capitol Hill, in addition to small-business owners and federal employees.

Zients said Obama waited nearly a year to act on the proposal because "we wanted to make sure we got it right."


Obama, who clashed bitterly with Republicans last year on the payroll tax cut, said the proposal he laid out shouldn't be a partisan issue. 

But he warned, "with or without Congress, I’m going to keep at it." 

"It would be a lot easier if Congress helped," he said. "I’m hopeful it’s with Congress, because this is an area where we can receive bipartisan support, because making our government more responsive, strategic and leaner shouldn't be a partisan issue."

California Rep. Darrell Issa, the powerful Republican chairman of the House Committee on Oversight and Government Reform, said he "stands ready" to work with the president on a reorganization of government.

“While I have been disappointed that the White House has not embraced earlier bipartisan congressional efforts seeking collaborative engagement on proposals to reorganize government, I hope this announcement represents the beginning of a sincere and dedicated effort to enact meaningful reforms,” Issa said in a statement.

The merger would save $3 billion over 10 years by eliminating expenses that include everyday overhead costs and human resources departments, an official said.

Between 1,000 and 2,000 jobs would be eliminated, but that would be done through attrition.

—This story was first posted at 7:11 a.m. and was last updated at 3:18 p.m.