The new department would combine the trade and commerce functions of the Commerce Department, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corp. and the Trade and Development Agency.
The Census Bureau, the Bureau of Economic Analysis and the Bureau of Labor Statistics would also be included to focus on government statistical data. But the National Oceanic and Atmospheric Administration — now the largest part of Commerce’s budget — would be moved to the Interior Department.
The new department would be led by a Cabinet secretary; the U.S. trade representative would remain a member of the Cabinet, officials said.
Congress would be able to vote on each specific proposed merger. Jeffrey D. Zients, the Obama administration’s chief performance officer, stressed that any proposal would have to reduce the size of government and save money.
“The government we have is not the government that we need,” Obama said. “We live in a 21st-century economy, but we’ve still got a government organized for the 20th century. ”
In a signal that the proposal may hold some attraction for Republicans, Rep. Darrell Issa, who is chairman of the House Oversight and Government Reform Committee and one of Obama’s biggest GOP critics, said Friday that he stands “ready to work with President Obama” on the reorganization.
“I hope this announcement represents the beginning of a sincere and dedicated effort to enact meaningful reforms,” said Issa (Calif.).
While symbolically important — especially because similar reform efforts by previous administrations have often failed — the specific consolidations being proposed would barely dent the number of workers and the amount of spending in the country’s 2.1 million-employee federal bureaucracy.
Still, despite GOP criticisms of the government’s size, White House budget data show that the number of federal employees last year was fewer than in 1985, under Reagan, despite a U.S. population that is about 30 percent larger now.
In his 2011 State of the Union address, Obama vowed to tackle federal inefficiency, famously joking: “The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them when they’re in salt water. And I hear it gets even more complicated once they’re smoked.”
Aides said the quip came from White House Chief of Staff William M. Daley, who served as commerce secretary during the Clinton administration and had urged Obama to tackle concerns with the sprawling federal bureaucracy.
Despite the prominent discussion of the issue and Obama’s vow to release specific plans within six months, administration officials spent most of last year playing down the goal of a major reorganization.
They said they were sidetracked by the need to draft contingency planning for a possible government shutdown and the acrimonious debate in the summer over raising the federal debt ceiling. At the same time, Obama commissioned a study of which entities should be targeted and received the results in June.
Though White House officials estimated that 1,000 to 2,000 jobs could be eliminated in the first wave of reorganizations, they said most of the cuts would come through natural attrition as employees retire or seek outside employment.
Elaine Powell-Belnavis, president of the Council of Small Business Administration locals, said she could not rubber-stamp the president’s plan without knowing what the “slimmer” workforce the White House promises will mean for her union members.
“Nothing goes away tomorrow,” Small Business Administration director Karen G. Mills told her employees in a Friday conference call.
Staff writers Lisa Rein and Paul Kane contributed to this report.