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Better than oops

13 January 2012 By Daniel Indiviglio

Choosing which federal agencies to shutter has become a sporting feature of the U.S. Republican presidential campaign. Barack Obama has taken the game a notch further by proposing to consolidate six agencies in a bid to reduce the bureaucracy. While a step in the right direction – and unlike GOP contender and Texas governor Rick Perry, Obama clearly knows which agencies he wants to close – it’s a bitty fix. Repairing America’s finances will require deeper cuts and more creative measures than this.

True, the very idea of a Democrat president requesting powers to shrink the size of government without Congress getting in the way is a form of progress. Interest groups and politics too often prevent meaningful cost cutting, which absent new taxes is required to reduce the national debt and close the yawning budget deficit. The new authority could allow Obama to eliminate a heap of wasteful spending and regulatory burdens. In that sense, it’s a politically astute move: How can Republicans object to that?

But the president’s first glimpse of how he’d wield that authority is not ambitious enough. The idea is to consolidate six trade- and commerce-related agencies, including the Office of the U.S. Trade Representative, the Export-Import Bank, Overseas Private Investment Corp, the Trade and Development Agency, the Small Business Administration and parts of the Commerce Department. This will amount to an estimated 1,000 to 2,000 jobs and savings of around $3 billion over 10 years from the budget.

To put that in context, it is equivalent to about 0.09 percent of the federal workforce and 0.007 percent of the next decade’s budget. To reduce government outlays by just 1 percent, Obama would need to have 150 similar proposals up his sleeve. In short, this is a reordering of deck chairs, not a root-and-branch shrinking of bloated government.

That’s not to diminish the spirit of the plan or the request for greater executive authority to make difficult spending decisions. Not least because if the president doesn’t make full use of any newfound powers, he’ll know his likely opponent in November, Mitt Romney, will. After all, his private equity career provides him particularly relevant expertise when it comes to consolidation, enhancing efficiency and cutting jobs.


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