President Obama: In Search of Efficiency

Friday, President Obama announced that he will seek the authority (via a proposed Consolidation Authority Act) to reorganize and consolidate government agencies with business and trade responsibilities.  Targeted agencies include: the Commerce Department, the Export-Import Bank, the Overseas Private Investment Corporation, the Office of the U.S. Trade Representative, and the U.S. Trade and Development Agency. The Small Business Administration would be elevated to Cabinet status. In addition to streamlining the bureaucracy and achieving greater efficiencies, the goal is the eliminate up to 2,000 FTEs, largely through attrition. See summary here.

Reorganization authority usually amounts to very little, but at times it can deliver some surprising results (think of Nixon’s creation of the Environmental Protection Agency in 1970, based in part on the work of the Ash Commission). Of course, Nixon was working with a Democratically controlled Congress and the creation of the EPA was consistent with the sentiment on the Left following Earth Day (while serving Nixon’s short term goal of limiting Senator Muskie’s claim as the nation’s chief environmentalist).

Nixon’s larger goal of consolidating numerous agencies to create a set of super agencies never had a chance. Members of Congress jealously guard their committee jurisdictions. While they are pleased to support the creation of new agencies, they seem loathe to eliminate those that no longer serve a valuable function (assuming they served an important function at their creation other than rewarding organized constituents).

In any event, the congressional response seems tepid and organized labor is already mounting opposition to the proposed consolidations.  In the words of National Federation of Federal Employees National President William Dougan:

“With millions of American workers already unemployed, we are looking for proposals that create jobs, not eliminate them. Our sincere hope is that as these federal agencies are reconfigured, they find a way to make sure thousands of people working in these agencies aren’t given pink slips.”

It is difficult to imagine that President Obama, facing a tough reelection bid and difficulties shoring up the support of key coalition members like organized labor, will invest much of his depleted political capital in pursing a goal as arcane as consolidating agencies that most voters have never heard of in the first place.

In a perfect world, we would pursue efficiency by simply eliminating the rouges’ gallery of agencies under consideration, salvaging the few components that are worth retaining (e.g., the Census Bureau, the National Oceanic and Atmospheric Administration). Most are actively engaged in dispersing various forms of corporate welfare and make little if any contribution to national economic performance.

3 thoughts on “President Obama: In Search of Efficiency

  1. Related to this post, this from Don Boudreaux at Cafe Hayek:

    14 January 2012

    Editor, The New York Times
    620 Eighth Avenue
    New York, NY 10018

    Dear Editor:

    Your reporter describes Pres. Obama’s plan to consolidate six agencies into one as “an aggressive campaign to shrink the size of the federal government” (“Obama Bid to Cut the Government Tests Congress,” Jan. 14).

    Some aggressiveness. By Mr. Obama’s own reckoning his plan will shave only $300 million annually from Uncle Sam’s budget over the next ten years. That’s 0.0081 percent of the government’s fiscal 2012 budget. If a family earning the median household income in America were equally “aggressive” in slashing its budget, the amount that family would slice from its yearly spending would be $4.16 – about the amount they spend on ONE order of a Big Mac with fries.

    Donald J. Boudreaux
    Professor of Economics
    George Mason University
    Fairfax, VA 22030

  2. Thanks Roger. It is absurd to claim that this consolidation–which will never happen–is “an aggressive campaign to shrink the size of the federal government.” At best, it is a symbolic effort (signal support for small business by elevating the SBA’s status; signal support for deficit cutting by “slashing” the bureaucracy).

    There is so much low hanging fruit for those who are genuinely interested in shrinking government. The first indicator that they are not serious: they don’t reach out and pick it.

  3. I never use the word “worker” when discussing most employees of the Federal Government. These so called “workers” couldn’t make a living in the American Free Enterprise System if their lives depended on it. The sad fact is that most of us have to work till we are 75 so that these “workers can retire at 50 or 55. Again,its not Federal “workers” but Federal employees.

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