Analyzing and Reorganizing Federal Agencies

A proposal to reorganize federal government would impact many agencies and employees. Here is a summary of how agencies would be impacted.

As noted in Proposal to Revamp OPM, Labor and Education Department, the Trump administration is proposing a significant revamping of the federal government. As noted in the introduction to the document: “while some of the proposals are ready for agency implementation, others establish a vision for the Executive Branch that will require further exploration and partnership with the Congress.” This earlier article briefly discusses changes proposed for the Office of Personnel Management (OPM), Department of Labor and the Department of Education.

In other words, some of these proposals can be implemented by the administration. Other portions will require Congressional action.

While any significant change in government creates controversy and legal challenges, the proposal is worth reading and considering. Some of the programs placed in agencies created years ago made sense at the time. Subsequent changes may have resulted in the existing structure making little sense and creating confusion, chaos and conflicting policies emanating from government.

Purpose of the Proposal

The report seeks to create a more efficient organizational structure for the Federal Government. Numerous programs with many similarities have been created over time but may be administered by different agencies. With different agencies regulating similar issues, there is often (usually?) little or no coordination. The proposal seeks to create a structure that will lead to more efficiency in government and more uniform policies by putting similar functions in the same organization.

No doubt, if these proposals are enacted they will impact most of the federal workforce. Many employees would move to different organizations. There would be some agencies performing the same or similar duties that could be consolidated. There would also likely be a chance of promotions for some employees as some organizations would expand.

Union Reaction

Unions often fear and fight changes and this proposal is no exception. According to an AFGE press release:

There’s little reason to believe this reorganization plan is anything more than a scheme to eliminate essential programs and public-service jobs, reward or punish political appointees depending on their allegiance to the White House, and privatize government programs to reward political donors. We are particularly alarmed over proposals to privatize both the U.S. Postal Service and our federal air traffic control system.

There are varying reasons for the reaction of this and other federal unions. Among the most important, but not often cited, is that the structure of bargaining units would change. New units could be larger while others would become smaller or disappear. This would lead to new union elections where employees would determine which union, if any, would represent the new organizations. Changes such as this can lead to reduced income from dues paid by employees, increases the possibility of some unions losing (and others gaining) the right to represent employees they currently represent, and election of new employees representatives at the bargaining unit level.

Once a union is elected, there is seldom any change. Once elected, the union is likely to remain as the representative for many years. The reorganization plan would upend some of these long term arrangements.

Of course, assigning current government functions to private companies would eliminate representation of these employees by their current union(s). While that may benefit others, the financial impact on federal employee unions currently representing the employees would be significant and very costly.

So, even if the plan could result in a more efficient and effective government, change is often scary and threatening to existing interests. Consolidation of some of the functions as outlined in the plan appear to make sense and would restructure some systems that are not very rational. Whether any changes will actually occur, and whether the proposals would benefit government operations, is still unknown.

In all likelihood, the administration views the proposal as a significant part of “draining the swamp” and trying to create a better federal government operation.

Here are a few of the highlights of the recommendations that could have an impact on readers working in those agencies.

Department of Health & Public Welfare

This proposal moves some nutrition assistance programs now located in the Department of Agriculture’s (USDA) Food and Nutrition Service (FNS) into the Department of Health and Human Services’ (HHS) Administration for Children and Families (ACF). It would also rename HHS the Department of Health and Public Welfare (DHPW).

This proposal is designed to align the administration of these public assistance programs at the Federal level with how they are often administered at the State and local government levels.

Federal Food Safety Agency

This proposal would consolidate the fragmented Federal oversight of food safety by reorganizing the USDA’s Food Safety and Inspection Service (FSIS) and the food safety functions of the the Food and Drug Administration (FDA) into a single agency within USDA. The recommendation states that USDA demonstrates strong leadership in food safety and maintains an understanding of food safety issues “from the farm to the fork.”

Examples of Inefficiency

The food safety system is confusing and sometimes not logical. Here are examples in the report.

  • The FSIS has regulatory responsibility for the safety of liquid eggs. The FDA regulates the safety of eggs inside of their shells.
  • The FDA regulates cheese pizza. If there is pepperoni on it, it is regulated by FSIS.
  • FDA regulates closed-faced meat sandwiches. The FSIS regulates open-faced meat sandwiches.

Move Housing Policy Functions to HUD from USDA

Under the current structure, both USDA and HUD operate programs assisting homeowners and low-income renters and support rental housing development. Each agency operates a mortgage insurance program and provides loans to build, rehabilitate, and refinance rental housing. The two agencies also operate separate rental assistance programs with subsidies for low-income tenants.

This proposal would move USDA’s rural housing loan guarantee and rental assistance programs to the Department of Housing and Urban Development (HUD). The purpose is to make it easier to have both agencies to focus on their core missions and align the Federal Government’s role in housing policy.

Consolidating Veterans Cemeteries

This proposal would transfer responsibility for perpetual care and operation of select military and veterans cemeteries located on Department of Defense (DOD) installations to the Department of Veterans Affairs (VA) – National Cemetery Administration. This transfer is designed to increase efficiency, limit overlapping missions, and ensure these cemeteries are maintained to national shrine standards to continue the recognition of service of those interred there.

Consolidating Economic Statistical Functions

Our Statistical System consists of 13 principal statistical agencies. Three of these agencies—the Census Bureau (Census), the Bureau of Economic Analysis (BEA), and the Bureau of Labor Statistics (BLS)—account for 53 percent of the System’s annual budget of $2.26 billion. They share unique synergies in their collection of economic and demographic data and analysis of key national indicators. Reorganizing these agencies under the Department of Commerce (DOC) would increase cost-effectiveness and improve data quality, while simultaneously reducing the burden of government on businesses and the public.

Federal Transmission Assets

The Federal Government owns, operates, and maintains over 50,000 miles of electricity transmission lines and related assets. The vast majority of the Nation’s electricity needs are provided through for-profit investor-owned utilities. Ownership of transmission assets is best carried out by the private sector, where there are appropriate market and regulatory incentives

This proposal would sell the transmission assets owned and operated by the Tennessee Valley Authority (TVA) and the Power Marketing Administrations (PMAs) within the Department of Energy, including those of Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration. Eliminating or reducing the Federal Government’s role in owning and operating transmission assets. The intent is to encourage a more efficient allocation of economic resources and mitigate the risk to American taxpayers.

Restructure the US Postal Service

The US Postal Service (USPS) has high fixed costs as a result of relatively generous employee benefits combined with a universal service obligation that requires mail carriers to visit over 150 million addresses six days per week.

This level of service was originally supported by a high volume of mail. Despite significant decline in volume as a result of new technology, the size of the delivery network has grown. USPS can no longer support the obligations created by its enormous infrastructure and personnel requirements. USPS already has over $100 billion in unfunded liabilities, a substantial capital investment backlog, has posted losses for over a decade, and no clear path to profitability.

This proposal would restructure the United States Postal System to return it to a sustainable business model or prepare it for future conversion from a Government agency into a private company. Like many European nations, the U.S. could privatize its postal operation while maintaining regulatory oversight.

The President’s Task Force on the United States Postal System will make recommendations on reforms towards this goal in August 2018.

Transitioning to Digital Federal Government

This proposal would transition agencies’ business processes and record keeping to digital. It would also end the National Archives and Records Administration’s (NARA) accepting paper records by December 31, 2022.

The purpose would be to improve workflow and effectiveness, and ability to provide data by converting paper-based processes to electronic workflows, expanding online services, and enhancing management of data and information maintained by the Federal Government.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47