Obama to Merge 6 Government Agencies, Cut 2,000 Employees

The White House says it wants to trim government excess, but some see it as a political ploy.

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In a move that some call too little too late, President Obama today called for the elimination of up to 2,000 government jobs and the consolidation of six agencies into one.

Initial cuts at the Commerce Department and five related agencies will save the Treasury as much as $3 billion over the next 10 years, the White House says. To carry out these and future cuts, Obama is asking Congress for a type of "consolidation authority" that would allow him to propose ways to streamline federal agencies..

"Right now, there are six departments and agencies focused primarily on business and trade in the federal government. ... It's redundant and inefficient," Obama said.

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On a call with reporters this afternoon, Federal Chief Performance Officer Jeff Zients, whom President Obama tasked with leading the government's reorganization effort last January, explained that the reorganization seeks to create a "tightly integrated new department" by consolidating the core trade and business components of the Commerce Department with the Small Business Administration, the U.S. Trade Representative's Office, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency.

The National Oceanic and Atmospheric Administration, currently located in the Commerce Department, would move to the Interior Department.

The Obama administration has said that these initial cuts would eliminate 1,000 to 2,000 positions through attrition, saving around $3 billion over 10 years. According to White House figures, the Secretary of Commerce oversees a $6.5 billion budget and around 38,000 employees.

The proposed cuts represent about 0.1 percent of the federal workforce, according to Bureau of Labor and Statistics figures.

But Obama can't go it alone. So the White House is asking Congress to grant it authority to make cuts to the executive branch—authority that Congress rescinded in 1984.

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The administration's move appears designed to score political points by edging onto the turf of his Republican presidential rivals, who often tout their "small-government conservative" credentials. The Mitt Romney campaign today called foul on this point, accusing the president of having "grown government beyond belief for the past three years."

"It is unfortunate that he is only doing so now to curry political favor in an election year," says Romney spokesperson Andrea Saul in an email to U.S. News.

Cutting the size of government was a key plank in the president's 2011 State of the Union address. Asked today why it has taken until now to start the cutting process, Zients said, "This is very rigorous work, and we wanted to make sure we got it right."

While increasing federal spending is certainly nothing new for a president—Republican or Democrat—some say the president's spending increases have hurt his credibility too much to earn points for cutting now.

"He's had so much time to make real cuts in the government and hasn't done it, that it's going to be hard for him to make the case that republicans are the ones standing in the way of cuts," says Dan Judy, Vice President of Republican research and strategy firm Ayres, McHenry, & Associates.

He also adds that, while it's uncertain whether Congress will approve the president's request, a fight is guaranteed. "What I can predict is that it's going to be ugly," Judy says. "There's going to be a lot of controversy, and there's going to be another battle over it."