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Obama’s Reorganization Plan Faces Long Odds

Every president wants to leave a distinctive mark on government, and President Barack Obama is no exception. In his 2011 State of the Union address, he promised to “develop a proposal to merge, consolidate and reorganize the federal government in a way that best serves the goal of a more competitive America” and submit it to Congress for a vote.

It wasn’t until Jan. 13 of this year, however, that the president finally unveiled his reorganization plan — sort of. (He has yet to formally submit it.) He called for merging several existing agencies into a renamed Commerce Department to handle business and trade functions. These include the Small Business Administration, Commerce’s business and trade responsibilities, the Office of U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency.

In the plan’s rollout at the White House, the president said, “The government we have is not the government that we need. … We need to think bigger.” That must have given the tea party heart palpitations. What the president intended, though, was thinking bigger about making government “leaner and smarter.”

Before the president submits any government reorganization plans, he has asked Congress to enact special fast-track authority for processing the proposal.

On Feb. 16, the White House sent Congress the Reforming and Consolidating Government Act establishing a fast-track process that would guarantee an up-or-down vote by both chambers on a joint resolution approving a reorganization plan, with no opportunity for amendment or filibuster.

Although the president told his Council on Jobs and Competitiveness on Jan. 17 that the consolidation authority he seeks “would for the first time require that any reorganization proposal reduce the size of government and cut costs,” the legislation submitted on Feb. 16 requires only that a plan result in “a decrease in the number of agencies or cost savings …”

The idea of granting the president special reorganization authority originated with President Herbert Hoover in 1929, but was not granted until 1932. The law allowed the president to issue executive orders to coordinate and consolidate, but not abolish, executive and independent agencies, subject to disapproval by either chamber (a “legislative veto”). Hoover proceeded to issue 11 executive orders in December merging 58 agencies.

However, because he had just been defeated for re-election, the lame-duck Congress decided to defer to the next president — Democrat Franklin Roosevelt. The House rejected all 11 orders.

Before he left office, Hoover questioned the constitutionality of the legislative veto. So, when Roosevelt became president in 1933, Congress renewed the president’s reorganization authority for two years without a Congressional veto. Although the law gave the president carte blanche to abolish any agency in whole or in part, Roosevelt used the authority sparingly — he was already busy creating new agencies.

In 1937 FDR sought broad reorganization authority from Congress, including the ability to fold all independent agencies under existing Cabinet departments. However, Congress had turned against the New Deal and was outraged by the president’s Supreme Court packing scheme. The legislation consequently died at the end of the 1938 session.

Government reorganization legislation was finally enacted in 1939, but in considerably different form than FDR had proposed. Independent agencies were exempted from any reorganization plans, and the plans would be subject to disapproval by adoption of concurrent resolutions, which are not signed by the president. FDR relented, saying he would abide by the concurrent “opinion” of Congress, though he still maintained that Congress could not unilaterally alter presidential authority previously granted by law.

In 1983, FDR’s views (and Hoover’s) were vindicated by the Supreme Court when it invalidated one- and two-house legislative vetoes as violating the “presentment clause” of the Constitution. The reorganization law was consequently amended in 1984 to provide for Congress’ approval of plans by enactment of joint resolutions. The law expired later that year and has not been renewed since.

Of the more than 100 reorganization plans submitted by presidents since 1939, 80 percent have been approved, including plans to create the Environmental Protection Agency, the National Oceanic and Atmospheric Administration, and the Office of Management and Budget (all three in 1970). The use of reorganization authority to create entirely new Cabinet departments has met with mixed results (and is now prohibited): President Dwight D. Eisenhower succeeded in 1953 in creating the Department of Health, Education and Welfare, while President John F. Kennedy failed in 1962 to create a Department of Urban Affairs and Housing.

Obama’s proposed reconfiguration of the Commerce Department will encounter a gnarly thicket of competing interest groups and committee jurisdictions. For instance, on the same day the president unveiled his plan in January, Senate Finance Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Dave Camp (R-Mich.) issued a joint statement warning against merging the “nimble” trade representative’s office into a “new bureaucratic behemoth.”

The bureaucratic box-shuffling coupled with fast-track constraints on Congress make the chances for enactment minuscule at best, especially under divided-party government. Congress has reorganized government countless times in the past without the aid of a presidential slam dunk and can do so again when necessary.

Don Wolfensberger is a Congressional scholar at the Woodrow Wilson Center, resident scholar with the Bipartisan Policy Center, and former staff director of the House Rules Committee.

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