Obama Bid to Cut the Government Tests Congress

Mr. Obama called 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 pruning 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 Mr. Obama wants to cut wasteful spending.

“No business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations,” Mr. 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 is it O.K. for our government? It’s not.”

By putting the onus on Congress to provide the authority for streamlining the government, Mr. Obama is seizing a core Republican issue — the inexorable growth of the public sector in recent decades — and trying to turn it to his advantage. Even his language was reminiscent of Mitt Romney, the Republican presidential front-runner, who says he would use his experience in business to make government more efficient.

It is not clear whether Congress, where much of Mr. 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 227 employees, into a large bureaucracy, saying it could harm American trade policy.

“Making it just another corner of a new bureaucratic behemoth would hurt American exports and hinder American job creation,” said Senator Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee, in a statement with Representative Dave Camp, the Republican chairman of the House Ways and Means Committee.

Despite regular vows by presidents to overhaul government — Mr. Obama made one in his State of the Union address last January — few have followed through. Those who did, like Richard M. Nixon, often met with failure. Scholars have mixed feelings about such reorganizations, with some arguing that they rarely lead to lower head counts, more effective departments or savings.

“My gut tells me those benefits will end up being much smaller than advertised, and the costs much larger,” said Steven M. Teles, a political scientist at Johns Hopkins University, pointing to the time wasted during the consolidation and the changed political dynamic between the agencies and Congress.

But experts on government efficiency applauded the initiative, saying it was overdue, and some analysts said it made sense to combine agencies involved in business development, foreign investment and trade promotion into a single department with the mandate to promote American exports.

“If you look at American exports, it’s dominated by big business,” said Daniel W. Drezner, a professor of international politics at Tufts University. “If you want small and medium enterprises to get more involved in exporting” — a goal of the Obama administration — “having small business and the trade office in the same agency makes sense,” he said. “So this could be a boon for that.”

Mr. Obama emphasized the confusing tangle of agencies that businesses face when they seek help from the government. To illustrate the problem, he gestured toward a screen behind him that showed the dozens of Web sites, offices and customer service centers, many with overlapping functions. NYT