Proposal to Reorganize Federal Agencies

Jun 28, 2018

reorganizeThe Trump administration is proposing significant changes to reorganize the federal government. As noted in 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.”


The purpose of the proposal seeks to create a more efficient organizational structure for the government. Agencies often create different but similar programs without much coordination. The proposal seeks to create a different structure that will lead to more efficiency in government and more uniform policies by putting similar functions in the same organization.

The proposals would impact most of the federal workforce. Employees would move to different agencies and agencies would be consolidated.

Union Reaction

Unions often have a negative view of these proposals. The American Federation of Government Employees said this in a 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 Postal Service and our federal air traffic control system.”

One of the reasons for this reaction 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 new organizations.

These changes could lead to reduced income from dues paid by employees, increased possibility of some unions losing (and others gaining) the right to represent employees they currently represent, and the election of new employee representatives at the bargaining unit level.

This reorganization plan would upend some long-term arrangements these unions have.

Below are some of the highlights of the agency reorganization recommendations.

Department of Health and Public Welfare

The proposal to reorganize the government would move some nutrition assistance programs now located in the Department of Agricultures’ Food and Nutrition Service into the Department of Health and Human Services Administration for Children and Families. It would also rename HHS to the Department of Health and Public Welfare.

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

Federal Food Safety Agency

This would reorganize the USDA’s Food Safety and Inspection Service and the Food Safety functions of the Food and Drug Administration into a single agency with the USDA. The recommendation states the USDA demonstrates strong leadership in food safety and maintains an understanding of food safety issues “from the farm to the fork”.

The report also demonstrates the inefficiencies of the food safety system:

  • The FSIS has regulatory responsibility for the safety of liquid eggs, but the FDA regulates the safety of eggs inside their shells.
  • The FDA regulates cheese pizza, while the FSIS regulates it if there is pepperoni on it.
  • FDA regulates closed-faced meat sandwiches; however, the FSIS regulates open-faced ones.

Housing Policy Functions Moving to HUD from USDA

Currently, 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. Both 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 HUD. The purpose is to make it easier to have both agencies to focus on their core missions to align the government’s role in housing policy.

Consolidating Veterans Cemeteries

This proposal would transfer responsibility for perpetual care and operation of select military and veteran’s cemeteries located on DOD installations to 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 recognition of service to those laid there.

Consolidating Economic Statistical Functions

The Statistical System consists of 13 principal statistical agencies. Three of these—Census Bureau, Bureau of Economic Analysis, and Bureau of Labor Statistics—account for 53% of the systems annual budget of $2.26 billion. Reorganization of these agencies (under Department of Commerce) would increase cost-effectiveness and improve data quality while 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. Ownership of transmission assets is best carried by the private sector, where there are the appropriate market and regulatory incentives.

This proposal to reorganize would sell transmission assets owned and operated by the Tennessee Valley Authority and Power Marketing Administrations within the Department of Energy, including Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration. The intent is to encourage a more efficient allocation of economic resources and mitigate risk to taxpayers.

Restructure the Post Office

The United States Postal Service has high fixed costs due to generous employee benefits combined with a universal service obligation requiring mail carriers to visit over 150 million addresses 6 days a week. The size of the delivery network has grown despite a significant decline in volume because of new technology.

USPS can no longer support obligations created by its enormous infrastructure and personnel requirements. The agency already has over $100 billion in unfunded liabilities, substantial capital investment backlog, and has posted losses for over a decade.

The proposal would restructure USPS to return to a sustainable business model or prepare it for a future conversion from a government agency into a private company. The U.S. could privatize postal operations while maintaining regulatory oversight.

Transitioning to a Digital Federal Government

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

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

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