Inside D.C.

Consolidate this, Mr. President

Commentary.  I’ve just finished reading President Obama’s “fact sheet” on what the White House calls “reorganization” of the federal government – everyone else calls it “consolidation” – in which he talks about taking five agencies and a cabinet level department and rolling them into “One Department” that has everything to do with trade. Let me just say in a purely objective, non-partisan way, the plan does not make sense. Or, as a friend of mine is fond of saying, it appears the President is trying to cure dandruff with a guillotine.

The fact sheet talks about the need to streamline the federal government, reduce the number of agencies, save taxpayer dollars and actually help small businesses – or “businesses of all size” – with trade and export aspirations. Excellent reasons all to seek efficiency and no one can quibble with the underlying motivations.

However, to take the “core business and trade functions” of the Department of Commerce and merge them with the Small Business Administration (SBA), the Office of the U.S. Trade Representative (USTR), the Export-Import Bank (EIB), the Overseas Private Investment Corp. (OPIC) and the U.S. Trade & Development Agency (USTDA), all so “one website, one phone number and one mission” will emerge reveals a lack of homework and outreach on the part of the President’s staff and a serious misunderstanding of the role these agencies play in the business of exporting.

The biggest mistake in this agency mash-up is including and demoting USTR. Ambassador Ron Kirk, the sitting Special Trade Representative, runs a shop that is the front line for this country on trade negotiations, whether new treaties, disputes or on-going tariff tiffs. USTR is part of the White House, and as such sends the supreme signal that Ambassador Kirk reports to and negotiates on behalf of the President, not a cabinet secretary. This is the system in most developed nations, and to relegate USTR to just another cog in our trade machine undercuts our commitment to trade and our credibility at the negotiating table.

The White House must be thinking about other entities to roll into “One Department” because its fact sheet says the new entity will be where “entrepreneurs go from the day they come up with an idea and a patent, to the day they start building a product and need a warehouse to the day they are ready to export and need help in breaking into new markets overseas.” Last I looked none of the agencies slated to be agglomerated do product safety/efficacy reviews and/or approvals, expedite private industry storage programs or issue export licenses. Which leads to a couple of observations: First, FDA does export certifications on the products it regulates – will that function shift to the “One Department”? Where do USDA’s Foreign Agricultural Service (FAS) and/or the Animal & Plant Health Inspection Service (APHIS) fit?

The President’s fact sheet talks about eliminating redundancies and inefficiencies, but if we learned anything from the creation of the Department of Homeland Security post-9/11 it’s that consolidating/reorganizing doesn’t necessarily make things more efficient, it just makes things different and complicated in ways we didn’t foresee.

The devil’s in the details and no one has seen the actual legislative proposal the President will send to Congress to give him the authority to set up this new entity. However, the letters of opposition are flying, and folks are already paranoid about a single food agency – that would take a merger of USDA, FDA and 12 other federal agencies – or the marriage of the Securities & Exchange Commission (SEC) with the Commodity Futures Trading Commission (CFTC).

The White House is also going to launch a new website: BusinessUSA – “a virtual one-stop shop with information for small businesses and businesses of all size (sic) that want to begin or increase exporting.” Here’s an idea: If the White House has gone to all the trouble of incorporating all federal information and assistance a business of “any size” needs when it comes to trade/exports, we can skip the whole “reorganization” thing.

It’s tough to escape the notion that for all the right reasons, it appears this White House may be about to do a very wrong thing.