Obama reorganizes government, adds efficiencies, expands economic footprint

Neil Munro White House Correspondent
Font Size:

The White House wants to split the Department of Commerce, move its environmental unit to the Interior Department, and combine its business-related units with several trade agencies to create a new competitiveness agency.

The plan is the showpiece of an ambitious election-year effort by President Barack Obama to increase government’s role in the economy while simultaneously appearing to streamline federal bureaucracies.

Obama today portrayed the plan as an effort to reform government. “There’s a real opportunity to reform government so that it meets the demands of our time,” he said during a morning speech in the White House.

He also suggested in the speech that he would like to consolidate the 12 federal agencies that regulate the food industry and the five that regulate the housing sector.

Republicans say efforts by government functionaries to regulate the economy leads to crony capitalism, economic inefficiencies and major economic disasters. The current real estate bust, they say, was the product of government officials pushing mortgage companies to make loans to Americans who could not afford to pay them back.

But Republicans shouldn’t object to his plan because a more efficient government is “common sense,” Obama said. “Making our government more responsive, strategic and leaner — it shouldn’t be a partisan issue,” he added.

That’s a theme he has pushed every year since he took office, and it complements his efforts to increase government’s size and role, most notably, by passing a takeover of the health care sector. (RELATED: Full coverage of President Barack Obama)

This theme is playing a large role in his 2012 re-election bid, as he tries to persuade voters that government is their ally in a turbulent international economy.

If implemented, the Commerce Department reorganization would cut the clout of business groups and increase the clout of environmental groups.

It would shrink the domestic clout of the Commerce Department’s officials by focusing them on international trade.

It would also boost the power of environmental lobbies by transferring the massive climate-related resources of the National Oceanic and Atmospheric Administration to to the Department of the Interior.

“Merging NOAA with Interior gives the environmental lobby a one-stop shop … [and] creates a powerful behemoth that will be all-too-ready to trample property rights in the name of the environment,” said Iain Murray, a vice president at the Competitive Enterprise Institute.

“The Interior Secretary and the [Envronmental Protection Agency] Administrator will form a powerful alliance in the President’s cabinet, and the chances of protecting the environment through responsible stewardship and free market methods will be significantly diminished as this new bureaucracy expands its power,” he warned.

That’s a goal environmental activist groups have sought for several years. If achieved, it would help Interior Department officials to fund more research needed to buttress their political campaign for control over the carbon-producing manufacturing, transport and energy sectors.

Under Obama, the Interior Department has sharply limited oil drilling, hampered exploration for natural gas, curbed mining, set irrigation levels for farmers and limited construction of forest roads needed by loggers. NOAA already plays a role in regulating maritime oil drilling.

Correspondingly, the Department of Commerce has played a minor role in his administration. For example, Obama delayed for two years the approval of three free-trade pacts because of union opposition.

The competitiveness agency — which doesn’t have a name yet — would keep a seat in the president’s cabinet, according to Jeffrey Zients, the White House’s management director.

To get the new agency,Obama will ask Congress to revive an old law that allows the president to submit federal reorganization plans to Congress for a quick, and unamended up-or-down vote.

“Fast track authority is need to get these hard things done,” Zients said. “This will be the first proposal, but there will be many after.”

The request for fast-track reorganization authority will be sent to Congress soon, said White House spokesman Jay Carney.

Under the proposed reorganization of the Commerce Department, the office of the U.S. Trade Representative would be folded into the new agency, but its head would also have a seat at the president’s cabinet.

The other agencies that would be placed in the new agency are the Small Business Administration, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency.

The declared diet would cut roughly 1,500 slots over several years from the federal government’s payroll of roughly two million civilians, and save $1 billion from an annual budget of more than $4 trillion.

This token cutback is a complement to Obama’s election-year media strategy, which relies on using numerous small announcements to portray him as protecting consumers from heartless companies and insulating taxpayers from government waste.

Last week, for example, White House officials announced they had persuaded companies to offer up to 250,000 summer internships and work opportunities, mostly for African-American and Hispanic youth. But this summer, roughly 1.7 million young people will graduate from U.S. schools and colleges to search for jobs in a stalled economy.

Earlier this week, Obama trumpeted his claim that companies are “insourcing” jobs from overseas. However, his formal presentation only described a few hundred returning jobs in an economy where roughly 20 million people are looking for work.

Obama has promised to revamp and improve government efficiency every year that he’s been in office, but the results have been meager, even as he expanded government control over the health care sector, the financial sector and the auto industry.

He has also expanded government environmental rules in ways that have extended government regulation of the manufacturing and energy sectors.

Follow Neil on Twitter