More on 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.

James McConnell, an attorney who specializes in construction law, says that in the short run, the consolidations will mean significant staff cuts across all six agencies. “These cuts, whether through attrition, early retirements, or reductions in force, will disrupt relationships within government and between government and the businesses these agencies are supposed to help,” he says. “Agency action will take longer and require more effort from constituent businesses.”

McConnell predicts that when the consolidations happens operations will seem to grind to a halt while newly reorganized departments draft, publish, and issue regulations to implement proposed changes. Time delays already built into the regulatory process will frustrate business leaders and government bureaucrats alike. “However, if President Obama succeeds in putting together a single point of contact relationship between business and the federal government, like the business services hotline Mayor Daley established in Chicago, the final outcome should significantly streamline all interactions between the federal regulatory bureaucracy and the small businesses, which drive the American economy forward,” says McConnell.

Nick Fuhrman, a senior professional staff member in the US House of Representatives from 1991-1996, says that President Obama’s proposal to consolidate several independent agencies into the US Department of Commerce needs a bolder move: vest the numerous support offices that languish in the department, including the agencies that rely on them. “For example, the lead responsibility among those reshuffled in the recent proposal is the US Trade Representative (USTR), an arm of the Executive Office of the President. Consolidating Export Financing, OPIC, and all trade promotion under USTR would have been the better way to reduce waste and achieve responsiveness,” Fuhrman says.

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