WASHINGTON — President Barack Obama on Friday announced an aggressive campaign to shrink the size of the federal government, calling on lawmakers to grant him broad new powers to propose mergers of agencies, which Congress would then have to approve or reject in an up-or-down vote.
If granted the authority, he said, he would begin by folding the Small Business Administration and five other trade and business agencies into a single agency that would replace the Commerce Department.
The White House estimated that the consolidation would save $3 billion over 10 years and result in reductions of 1,000 to 2,000 jobs. The savings is a mere rounding error in the $3.7 trillion annual budget, but the numbers may be less important than the message that Obama wants to cut wasteful spending.
"No business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations," Obama said to an audience of small business owners at the White House. "You wouldn't do it when you're thinking about your businesses, so why it is okay for our government? It's not."
It is not clear whether Congress, where much of Obama's legislative agenda has languished, will go along with this initiative. Republicans were immediately skeptical, suggesting that the White House was more interested in honing its re-election message than in reducing the size of government.
Even Democratic leaders expressed misgivings about folding the Office of the United States Trade Representative, a stand-alone agency with just 277 employees, into a large bureaucracy, saying it could harm U.S. trade policy.
Under the terms of the reorganization, five agencies — the Small Business Administration, the United States Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency, plus the business and trade functions of the Commerce Department — would be consolidated into a single agency.
Obama said he would elevate the director of the Small Business Administration, now Karen Mills, to his Cabinet. The U.S. trade representative would retain Cabinet rank, the White House said.
A spokesman for House Speaker John Boehner said streamlining the government was a laudable goal. "We hope the president isn't simply proposing new packaging for the same burdensome approach," said the spokesman, Brendan Buck.