Department of Commerce, Small Business Administration: Obama’s doomed plan to reorganize the government.

Obama’s Smart, Doomed Plan To Reorganize the Department of Commerce

Obama’s Smart, Doomed Plan To Reorganize the Department of Commerce

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Jan. 19 2012 4:38 PM

Department of Cabinet Shuffles

Obama’s smart, doomed plan to reorganize the government to help small business.

Karen Mills.
Expanding the list of cabinet members from 23 to 24 by including SBA Administrator Karen Mills won't change anything

Photograph by Brendan Smialowski.

One of my secret shames is an obsession with the Department of Commerce. In the early days of the Obama administration, when the new president had trouble picking anyone to run it, I wrote a series of profiles of America’s secretaries of commerce—cabinet officials who, Herbert Hoover aside, have been remarkable only for obscurity, corruption, and irrelevance. So it is perhaps not surprising that last week the president appeared to endorse eliminating the department and nobody noticed. 

On Jan. 13, as part of its campaign to demonstrate impatience with Congress’ level of cooperation in getting the American economy moving, the president proposed a three-plank plan for reorganizing the American government to help small business.

Step one is to grant cabinet rank to the Small Business Administration. Step two is the creation of a new website, Business USA, that “will be a one-stop shop for small businesses and exporters,” centralizing information currently spread across various different agencies. Step three, by far the most ambitious, is to ask Congress to reinstate the president’s authority, which existed from the 1930s until 1984, to streamline the process for eliminating or combining government agencies. He wants that authority to cope with the fact that “right now there are six departments and agencies focused primarily on business and trade in the federal government” and that “six is not better than one.” Obama’s speech itself was a bit hazy, but the accompanying fact sheet from the White House press office said the six agencies to be consolidated are the U.S. Trade and Development Agency, the U.S. Trade Representative, The Export-Import Bank, the Overseas Private Investment Corporation, the Small Business Administration, and something they referred to as the “Department of Commerce’s core business and trade functions.”

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Don’t expect the elevation of the SBA chief to cabinet rank to transform the landscape for American business. The United States doesn’t have cabinet government, and hasn’t for some time. Cabinet meetings are PR exercises, photo ops that have nothing to do with governing. There are almost as many cabinet officials these days as reality TV stars. In addition to the president and the vice president and the heads of the 15 executive departments, the chief of staff, EPA director, OMB director, U.S. Trade Representative, U.N. Ambassador, Council of Economic Advisors Chairman also had “cabinet rank.” Expanding the list of members from 23 to 24 by including SBA Administrator Karen Mills will make it mildly more difficult to organize a proper cabinet photo op, but otherwise change nothing. Note, for example, that Bill Clinton gave the Director of the Office of National Drug Control Policy (“drug czar”) cabinet rank as a demonstration of his tough on crime credentials. Needless to say, people kept doing drugs. Obama demoted the drug czar, but drugs are still illegal.

The bureaucratic reorganization, by contrast, could be a huge deal for Commerce junkies and fans of rationality in general. The basic idea would be to take the National Oceanographic and Atmospheric Administration, currently housed in Commerce, and send it over to the Interior Department where it can sit alongside the management of dry land. That’s about half Commerce’s budget gone. The remaining rump Commerce would be merged with the five smallish free-floating business-promotion agencies Obama named. The Department of Labor’s Bureau of Labor Statistics might also join the party, becoming a part of the Economics and Statistics Administration that commands the rest of the government’s data agencies.

This proposal lacks earth-shattering significance, but it is a good idea. It would save some money, eliminate some redundancies, and align agencies’ missions in a more logical way. You’re not going to balance the budget with this kind of thing, but saving money by reducing duplication of effort is still good.

Unfortunately, there’s no sign this reorganization is actually going to happen. You can get a sense of how serious the administration is about shepherding the proposal through Congress from the fact that they haven’t settled on a name for the new department. The Small Business Administration, flush with its new cabinet status, thinks the new department will be a bigger, better SBA. The U.S. Trade Representative, already with cabinet rank, may bristle at that. The existing Department of Commerce, meanwhile, simply sees this as an increase of its power, as it subsumes previous separate agencies. A very similar proposal from Jitinder Kohli and Jordan Eizenga at the Center for American Progress last March called the hypothetical new agency the Department for Business, Trade, and Technology. Inside the administration, it seems there may be more affection for the buzzier name Department of Competitiveness. Either way, nobody inside or outside the administration genuinely expects the reorganization to occur, either during this Congress or even after the election.

The goal, primarily, was to propose a sensible-sounding and economy-linked idea and then count on congressional Republicans to not cooperate, thus giving the president something new to complain about. If you’re hoping for real policy change, in other words, you’re out of luck. But there will be a new website.