US Federal Agency Consolidation

President Obama recently announced that he is seeking Congressional approval to consolidate six government agencies that interact with businesses and trade. He also made the head of the Small Business Administration a cabinet post. We asked our Zintro experts to comment on these proposed consolidations and if they will help or hinder small business progress or relationships with the government.

Donald Zowader, a government affairs consultant, says that making the Small Business Administration a cabinet level position is a real and serious move, whether one agrees with it or not. “It appears that President Obama is trying to behave in the way that business operates in this country, which is to be more effective by consolidation and reducing internal bureaucracy. Reducing red tape for small business to operate with the government and developing simpler procedures sounds good, but the devil will be in the details as to how the process actually works,” says Zowader. “I think it shows support for small business and will help relationships. And whether organizations or people agree or disagree, it clearly demonstrates that the administration recognizes the importance of not maintaining the status quo and attempting to make the system better.”

Levi Moore, a government relations and public affairs consultant, says that regarding U.S. agency consolidation it makes sense that these particular agencies should be under one roof. “A company with 499 employees is considered a small business yet not be in the correct federal government silo to seek comprehensive assistance. For, example, export assistance is a critical service that a company may need, but under the current structure the type of assistance needed may be housed in four agencies,” explains Moore. “Moving small business to cabinet level importance is essential. It is the engine of job creation in the US. But, small business issues get segregated in state governments too, especially in how they engage in small business development and large business attraction and retention activities. The needs do tend to be different.”

Jennifer Schaus, a US government relations consultant, says that agency consolidation can be effective when it reduces red-tape for businesses or others interacting with the agency, reduces federal budget dollars and makes the agencies run more efficiently. “Have you ever walked through a federal agency? It’s amazing to see what is not happening and what (who) our tax dollars are paying for. Running the government more like a business (for example, consolidations and performance based pay) and focusing on setting objectives, getting things done, and making it easy for the American public to interact with the agencies, is a good thing,” says Schaus. “Any move by the government to help stimulate business growth and positively impact the bottom lines of small businesses is a move in the right direction.”

Schaus says that making the SBA a cabinet post puts it under the spotlight, which is smart. “Businesses generate revenue and a portion of this revenue in the form of taxes comprises part of the federal budget. Increasing importance on business (particularly small business and entrepreneurs) and is the best path forward for economic growth,” she says.

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