President Barack Obama will direct his administration as soon as tomorrow to develop a plan to reshape the federal government that may include folding the U.S. Trade Representative’s office into the Commerce Department, abolishing some agencies and reducing the workforce, people familiar with the process said.
“The U.S. needs to learn from other countries,” said Jitinder Kohli, author of a report the administration is studying on the reorganization by the Center for American Progress, a Washington-based research group led by Obama adviser John Podesta.
Obama is facing Republican demands that he limit the size of the government by stripping away layers of bureaucracy. Making the efficiency of trade agencies a top priority may also help facilitate the president’s goal of doubling U.S. exports over the coming years to boost the economy.
Obama tapped Jeffrey Zients, deputy director for management at the Office of Management and Budget, to lead the reorganization effort on Jan. 30.
Zients and a group of aides, including Obama’s staff secretary Lisa Brown, have been charged with streamlining the 12 agencies involved in exports and the enforcement of trade agreements. Collapsing the dozen agencies into a single unit may result in the firing of some mid-level managers, including technology officers, one person said.
Costing Taxpayers Billions
The Center for American Progress report recommends moving agencies from the Commerce Department into other departments, including shifting the National Oceanic and Atmospheric Administration, which handles coastal and marine environments, to the Interior Department.
The center also recommended moving the U.S. Census Bureau and the Bureau of Economic Analysis from the Commerce Department to a new U.S. Statistical Agency.
The administration has been having discussions with business executives, former U.S. trade representatives and members of Congress to get their input, the people said.
The effort comes in the wake of a report by the Government Accountability Office that found 34 broad areas of duplication in federal programs, including food safety and domestic food assistance. The March 1 report found that overlapping programs may cost taxpayers billions of dollars each year.
In his State of the Union address Obama said his administration would “develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America.”
White House Communications Director Dan Pfeiffer said in announcing Zients’s appointment, the “federal government is stuck in the age of black-and-white television while we are competing in the age of the iPad.”
The administration may have an opportunity to reorganize the Commerce Department now that Secretary Gary Locke has been tapped to be the next U.S. ambassador to China. U.S. Trade Representative Ron Kirk, former Pfizer Inc. Chief Executive Officer Jeffrey Kindler and Google Inc. CEO Eric Schmidt are potential candidates for the job.
Still, some former trade representatives say any changes to the USTR, which has 230 employees, would be dangerous for U.S. businesses. The office, which negotiates trade agreements and litigates disputes at the World Trade Organization, is housed in the executive office of the president.
Moving USTR into Commerce or any other federal agency “would be a disaster” and Congress would never allow it, former U.S. Trade Representative Susan Schwab said in an interview. The agency is efficient partly because it’s small and focused, she said. USTR has a budget of about $250 million.
Leave USTR Alone
Schwab, who served in President George W. Bush’s administration, said the trade-promotion arm of the Commerce Department could be strengthened without changing USTR’s role. Commerce has an office that advocates for U.S. companies seeking government contracts abroad.
“The minute you try to move your trade negotiators in there, you’re going to have to recreate the function in the White House to coordinate your trade policy with other agencies with expertise and legitimate interests,” Schwab said. She said she hasn’t been consulted by the administration.
Kirk, the current trade representative, told the House Ways and Means Committee in a Feb. 9 hearing that he needs more staff “if we are going to have the robust enforcement” the agency is committed to.
“We are woefully short frankly on the investigative side,” he said. Kirk said USTR exhausted its entire 2009 translation budget in three months analyzing a complaint filed by the United Steelworkers union against tire imports from China.
Representative Kevin Brady, a Texas Republican who heads the Ways and Means Committee’s trade panel, told Kirk he’s “not interested in turning USTR from a cougar into a hippo,” adding that the agency shouldn’t grow too big and bureaucratic.
Mickey Kantor, a U.S. Trade Representative in the Clinton administration, said that the enforcement and promotion agencies should be kept separate.
The department’s Office of Import Administration rules on dumping and anti-subsidy duties on imports. Commerce’s Bureau of Industry and Security administers export controls for civilian items that may have military applications, such as radar or encryption software.
“But to try and build a huge agency, which would only reflect what Commerce is today, would not be very effective,” Kantor said in an interview.
Cutting Back Waste
The administration is seeking to make the case that it’s cutting back government waste.
“We shouldn’t just give our people a government that’s more affordable,” Obama said in his State of the Union address. “We should give them a government that’s more competent and more efficient.”
He cited the Interior Department’s jurisdiction over salmon while the fish are in fresh water and the Commerce Department’s jurisdiction over them when they’re in salt water as an example of inefficiency.
Not everyone agrees the system is in need of repair.
William Reinsch, president of the National Foreign Trade Council and a Commerce Department official in the Clinton administration, said, “If it ain’t broke, we’re baffled at why they want to try to fix it.”
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