POLITICS
01/26/2011 07:02 pm ET Updated May 25, 2011

Obama's Overlooked SOTU Promise To Reorganize The Federal Government

WASHINGTON -- One of the most overlooked but potentially significant proposals in President Barack Obama's State of the Union address Tuesday night was his announcement that he intends to send Congress a plan in the coming months to "merge, consolidate and reorganize the federal government in a way that best serves the goal of a more competitive America."

This broad declaration was buried by Obama's biggest laugh line of the night, in which he pointed to absurd examples of seemingly-byzantine federal bureaucracy:

We live and do business in the Information Age, but the last major reorganization of the government happened in the age of black-and-white TV. There are 12 different agencies that deal with exports. There are at least five different agencies that deal with housing policy. Then there's my favorite example: The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater. I hear it gets even more complicated once they're smoked.

The National Oceanic and Atmospheric Administration might seem a natural fit for the Interior Department, because its mission includes protecting America's natural resources -- such oceans and saltwater salmon -- and distributing environmental information, but it has spent the past 40 years housed within the Commerce Department.

According to a 2008 book by former Sen. Fritz Hollings (D-S.C.), a crusader for the NOAA's 1970 creation, that decision was political. With the support of President Richard Nixon's attorney general, John Mitchell, Hollings said, the White House eventually backed the establishment of such a watchdog, but not as the independent agency the senator had envisioned. The decision to house it in Commerce, as opposed to the Interior, was a function of Nixon's feud with the Interior Secretary, Hollings recounts in Making Government Work:

[Y]ou could tell from the commission's report that if the agency were not independent, then it would be logically put within the Interior Department since that was the agency charged with conservation. However, Mitchell told me that Interior Secretary Walter "Wally" Hickel had angered the President by speaking out against the Vietnam War, and Nixon "wasn't going to give him anything."

Sure enough, on July 9, 1970 -- a few months after that meeting -- Nixon submitted Reorganization Plan Number 4, which called for creation of NOAA as part of the Commerce Department under Secretary Maurice Stans.

One former senior Commerce Department official told the Center for American Progress that in some periods, the commerce secretary "spent 60 percent of his time dealing with fish."

At this point, however, Hollings is skeptical of moving NOAA and reorganizing the executive branch. "No, I wouldn't move it at all," the former South Carolina senator said in a Wednesday interview with The Huffington Post. "All that moving government is baloney." The reason? "Oil ... oil takes over and runs the Interior Department. That's its trouble now."

On Tuesday, Obama's reorganization proposal was low on specifics, and an administration official was reluctant to provide more details.

"As the president said, the federal government has not gone through a major review of its setup and reorganization for decades," the official told The Huffington Post. "The results are duplicative programs, ineffective programs that persist, and an organization of functions that doesn't always make sense. To make sure our federal resources are being used in a way that 'best serves the goal of a more competitive America,' we need to go through the federal government and identify where we can merge, consolidate, and cut. More details will come, but as the president said, he will put together a plan for Congress to consider."

One place where Obama might be looking for ideas is CAP, a think tank with ties to the administration. In fact, Obama's salmon example comes directly from the Center's December report, "A Focus on Competitiveness," which focuses on federal reorganization.

Aside from arguing that NOAA should be housed in the Interior Department, the report advocates for the creation of a department of business, trade and technology; an examination of whether the Economic and Statistics Administration should be moved to a new statistical agency; and the creation of a more expansive "competitiveness agency." It also says Obama should issue an executive order that would put in a place a comprehensive, long-term structure for analyzing the government's competitiveness capabilities, similar to that of its national-security planning process.

CAP studied the organizational approaches of at least eight other countries, including the United Kingdom, Japan and Germany. What they found, according to Jitinder Kohli, a senior fellow and one of the report's co-authors, is that the United States has "a much more fragmented policy-making machine for competitiveness."

"All of those countries have strong departments focused on building wealth in the economy, and the U.S. just doesn't have one, which is really unusual to not do that," Kohli said.

It's unlikely that Obama will present Congress with a plan to eliminate the Department of Education or Environmental Protection Agency, as some conservatives have advocated, nor is he likely to propose something on the scale of the Department of Homeland Security, created in 2002. But he still will need the cooperation of Congress, which is juggling a large number of other priorities.

"What ends up happening, whenever you try an executive reorganization of any sort in Congress, the turf wars immediately rear their ugly heads," said Norm Ornstein, a resident scholar at the American Enterprise Institute who has suggested to White House aides that the president consider a study along the lines of the Truman-era Hoover Commission.

"We saw this in a whole host of ways with the attempts in the past to create a Department of Trade, even with the Homeland Security Department," Ornstein said. "If you're going to consolidate agencies, that means some committees that have had the primary jurisdiction over agencies will lose that jurisdiction, the people who are on those committees are going to tend to be very upset. So you can lose support for those reasons. And of course, outside interest groups that have spent years developing their entree into agencies and bureaus are going to have a new challenge, and they may be upset."

(Disclosure: Terkel was the deputy research director for the Center for American Progress.)