The President’s Agency Consolidation Proposal

This morning I received a CNN “Breaking News” alert that “President Obama said today he is elevating the Small Business Administration to a Cabinet-level agency.” My first reaction was utter disbelief. The question is whether the SBA should exist, not whether it should be a cabinet-level agency. Fortunately, the CNN report was in error. What the President is, in fact, proposing is to consolidate multiple business-related agencies, including the SBA, into a single agency. As the White House fact sheet explains:

Currently, there are six major departments and agencies that focus primarily on business and trade in the federal government. The six are: U.S. Department of Commerce’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency.

This is redundant and inefficient. Small businesses often face a maze of agencies when looking for even the most basic answers to the most basic questions. There is a whole host of websites, toll-free numbers and customer service centers that at times offer them differing advice. The result is a system that is not working for our small businesses.

The President is proposing to consolidate those six departments and agencies into one Department with one website, one phone number and one mission – helping American businesses succeed.

This is a good idea. To be sure, I would love to see the President go even farther and consider whether the federal government needs to devote taxpayer dollars to business promotion at all. But if the government is going to be engaged in such efforts, it certainly makes sense to do so in as efficient a way as is possible, eliminating duplicative agencies and functions. This plan may only be a small step in the right direction, but given the orgy of spending over the past several years (including during the Bush Administration), a reorganization plan projected to save $3 billion over ten years is certainly a step in the right direction. Brad Plumer has more here.