This could be a battle of big government versus small. At hand is a plan by President Obama to reorganize the federal government to face the challenges of the 21st century. First up, the White House wants to consolidate several relatively small international trade agencies into a single department. On the face of it, the government would achieve economies of scale and efficiencies — do more with fewer government employees.
Many would agree that saving taxpayer dollars and streamlining government have wide appeal, but the flip side is the idea that a big agency can’t respond as quickly to rapidly changing business developments as well as a lean, specialized small agency can.
For some, it’s even more than that: It’s time to take a hard look at what functions executive branch departments do, and whether they’re a good investment of scarce resources.
The president’s plan calls for the core functions of the Commerce Department to be joined with the U.S. Trade Representative’s Office, Export-Import Bank of the United States, Small Business Administration, Overseas Private Investment Corp. and the U.S. Trade and Development Agency.
The White House called the existing cluster of agencies “redundant and inefficient.” The new agency would offer “one department, one Web site, one phone number, and one mission — helping American businesses succeed.” Officials have not been clear if the reorganization would be a new Cabinet-level agency, or a reworking of the existing Commerce Department.
The trade community’s initial reaction to the plan has been cool, and that may be the reception it gets on Capitol Hill as well.
Marianne Rowden, president of the American Association of Exporters and Importers, said the plan reminds her of the abolition of the Interstate Commerce Commission in 1996. While the ICC rode into the sunset, its successor, the Surface Transportation Board, became part of the Department of Transportation.
“The joke among us transportation lawyers was they got rid of the wrong agency. They should have gotten rid of the Department of Transportation,” Rowden said. “We’re looking at the same situation. They should be getting rid of the Department of Commerce. They’re reorganizing the little guys and ignoring the pink elephant in the room.”
“The argument in the business community for the last 15 years is that you have to preserve flexibility, and the ability of agencies to quickly respond and react,” said John Hardy Jr., president of the Coalition for Employment Through Exports, an organization promoting education on the legislative and regulatory issues affecting export finance. “If they need five sign-offs before they can do anything, then they’re no longer relevant. It’s the small and more nimble agencies that are able to respond in the timeframes that the business community needs.
“You can co-locate them so everybody can talk to each other in the aisle, but the agencies have to remain separate to remain responsive to the needs of the business community,” Hardy said.
“If the streamlining and efficiency mean that manufacturers will have less intellectual property protection, for example, it would be a devastating mistake. If, on the other hand, this process will mean doing more with less, it would be a great step forward,” said Aric Newhouse, senior vice president for policy at the National Association of Manufacturers.
“We are hopeful that the discussion centers on the key question for manufacturers: Will they be better able to compete, export, invest and create jobs as a result?” Newhouse said.
Rowden said it’s time to ask who benefits from what agency, and if it’s an appropriate expenditure of federal money. The Commerce Department is too big. Each layer of the bureaucracy takes its share for administrative expenses and fees, leaving less for the programs themselves.
“They’re not asking the fundamental questions of a particular agency’s mission, and that is the basic flaw in the program,” Rowden said. “At a time when resources are so precious, it’s appropriate to look at who are the beneficiaries of these public resources.”