Trump’s Government Reorganization Plan

July 11, 2018

In March 2017, President Donald Trump issued an executive order directing the Office of Management and Budget (OMB) to propose a plan to reorganize governmental functions, if redundancies were found. After analyzing agency reorganization plans, Government Accountability Office reports, and other data, OMB compiled and released its government-wide reorganization plan on June 21, 2018. Some of the 32 outlined changes would directly affect the small-business community and their employees among other stakeholders, and all of the proposals would take between three and five years to implement.

One such proposal would consolidate the various federal programs across different agencies that assist small-business owners in securing access to capital and federal government contracts into the Small Business Administration (SBA). Combining these programs would help streamline participation requirements such as eligibility criteria, application processes, and reporting, all while increasing consistency in the application of small-business certification criteria and attaining reciprocal recognition across federal agencies.

Through its Office of Capital Access, SBA fills gaps in the commercial lending market and ensures that small businesses can access the credit they need. Where appropriate, other small-business loan and loan guarantee programs would be fused into the SBA’s Office of Capital Access, under the plan. The SBA’s expertise in providing capital access to small business makes it the best agency to oversee the combined lending structure, which would make obtaining and servicing loans easier for small businesses.

The other SBA-related proposal creates a “one-stop shop” within the SBA for all small-business federal contracting certifications. Separate programs supporting small-business contracting would be consolidated into the SBA’s Office of Government Contracting and Business Development (as long as they are not highly specialized or industry-specific), eliminating the need for contractors to interact with multiple different agencies.

Nearly one-third of NSBA members surveyed have said they currently are engaged in the federal marketplace, and 60 percent rated entering the marketplace as moderately to very difficult. Thus, NSBA has consistently advocated for a consolidated, more streamlined registration process small-business owners can use when registering for federal contracts. The SBA proposal aims to mitigate inefficiencies, reduce paperwork, and simplify the processes of obtaining access to capital and engaging in the federal marketplace for small-business contractors.

Also, contained within the report, is the recommendation to merge the Department of Education (ED) and Department of Labor (DOL) into a single Cabinet agency, the Department of Education and the Workforce (DEW). Congress already considers the two agencies as interconnected, with the House Committee on Education and the Workforce, and the Senate Committee on Health, Education, Labor & Pensions; and therefore, the proposal intends to align the forces within the executive branch. The proposal creates the structure necessary to parallel education policy directly with the needs of U.S. businesses, and address current workforce skill-deficiencies to prepare students, and current adults for the jobs of tomorrow. The new department would include significant government-wide workforce development program consolidations, hoping to make the combined programs more robust. DEW would create four new sub-agencies: K-12, American Workforce and Higher Education Administration (AWHEA), Enforcement, Research/Evaluation/Administration.

AWHEA would contain the merged workforce development, vocational education, and employment programs. As part of the agency’s skills-based focus, the administration left open the possibility for student-aid funds to be used for apprenticeships and on-the-job training. The enforcement agency would encompass worker protection agencies from DOL that are responsible for enforcing statutes relating to workers’ pay, safety, benefits, and other protections. OMB indicated, under this proposal, they expected no changes to the future direction or enforcement of the former branches dealing with workplace health and safety.

Various other sections of the plan include reorganizing infrastructure and construction permitting processes within current agencies, to creating a Bureau of Economic Growth under the Department of Commerce. The Bureau of Economic Growth would streamline existing economic development programs to provide a central place for grants and technical assistance to communities and entrepreneurs focused on job creation, business growth, and strengthening local economies.

Most of the president’s reorganization plan requires Congressional approval and faces an uphill battle centering on their implementation. NSBA will continue to track the developments associated with these proposals. To read the full OMB recommendations, please click here.