President Outlines Plan to Consolidate Trade Agencies

January 26, 2012

On January 13, 2012, President Obama announced that he is asking Congress to pass a “Consolidation Authority Act” that would authorize him to reorganize and consolidate parts of the government. Passage of such an act would provide President Obama with the authority to submit to Congress specific consolidation proposals for a fast-track up or down vote, contingent on the condition that the proposal would save money and reduce the government size. The President’s first use of such consolidation authority would be to consolidate six agencies that focus primarily on business and trade, or parts of these agencies, into one department. The President’s proposal, designed to promote competitiveness, exports, and American business, devotes considerable attention to making it easier for small businesses to compete, export, and grow. In addition to seeking consolidation authority, President Obama is elevating the head of the Small Business Administration, Karen Mills, to his Cabinet.

The six major departments and agencies marked for consolidation include the U.S. Department of Commerce’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative (USTR), the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency. According to the White House Press Office, the current configuration of these agencies is redundant, inefficient, and difficult for small businesses to navigate. The President’s proposal would consolidate the six departments and agencies into one entity, with one website and one phone number.

The consolidated entity would have only one Secretary. The USTR would report to the new Secretary, but would also retain Cabinet status. The National Oceanic and Atmospheric Administration, which is currently part of the Commerce Department, would be shifted to the Interior Department. The Census Bureau, along with the Labor Department’s Bureau of Labor Statistics and the Commerce Department’s Bureau of Economic Analysis, would become part of a new division of statistics within the consolidated business and trade agency. According to the Administration, this plan would save $3billion over ten years and cut 1,000 to 2,000 jobs. Jay Carney, the White House Press Secretary, has also noted that several other government consolidation proposals are expected to follow the President’s trade agency consolidation efforts.

A variety of legislators and business groups have voiced concerns over the President’s trade agency consolidation proposal, especially regarding the inclusion of the USTR in the plan. On January 24, 2012, a coalition of nearly ninety business groups, including the U.S. Chamber of Commerce, the U.S.- China Business Council, and the American Association of Exporters and Importers, sent a letter to President Obama expressing concerns over the consolidation plan, and in particular over the inclusion of the USTR in a broader trade and business department. Senate Finance Committee Chairman Max Baucus (D-MT), House Ways and Means Committee Chairman Dave Camp (R-MI), and Ranking Member Levin (D-MI) have all voiced concerns regarding the inclusion of the USTR in the consolidation plan.

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