Arnold Kling  

The Case for a Re-org of the Executive Branch

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My latest essay:

As an example of careless organizational structure, consider that prior to the financial crisis the Federal Reserve Board was responsible for consumer protection with respect to mortgages, while the Department of Housing and Urban Development was responsible for the safety and soundness of the nation's two largest financial institutions, Fannie Mae and Freddie Mac. As far as the core missions of the two agencies are concerned, it should have been the other way around. It seems likely that HUD would have been more institutionally inclined to police sub-prime mortgage lending, while the Fed would have been more careful about scrutinizing risk practices at the housing giants. Holding all else constant, such a simple and obvious re-organization of responsibilities might have been sufficient to prevent most or even all of the disaster that ensued.

What I propose is a wholesale re-organization of the executive branch of government. This is something that has obvious efficiency benefits. However, those would tend to be long term. Meanwhile, the political costs would be felt in the short term. So it is unlikely to take place.

More plausible would be a "virtual re-organization" in which the President treats the departments as if they were organized along the lines that I propose. For example, the Secretary of Education could be put in charge of "economic opportunity" and give the authority to assemble a team of managers from other departments to coordinate all policies and programs aimed at improving economic opportunity.

Yes, I know, you want to abolish most of these functions and agencies altogether. The re-organization idea is a much more moderate proposal. That may be another reason that it stands no chance in today's environment.

Still, if you read the entire essay, it is rather out-of-the-box, no?

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COMMENTS (4 to date)
Brian Clendinen writes:

I could not find it after searching for a bit but RAND had a really good study about 10 years ago examining the pay of federal employees and how many separate organizations perform the same function. They recommended huge consolidation and reorganization of the federal bureaucracies. So I have been in your camp since reading a lot of this report.

It is a few hundred pages and a really good analysis/data that you should try to dig up and read.

The political problem is because congress (via committees) and cabinet members do not want to give up any power even if they would get sole control over another area.

AirmanSpryShark writes:

I'd go further, and reduce the number of direct reports to three: one each for foreign policy, economic policy, & social policy. Perhaps the (politically) easiest way to do this would be to (unfortunately) actually add a layer over the current Cabinet, possibly by splitting the Vice Presidency into three offices (with the side effect of making the resultant VPs meaningful offices, unlike the current one).

Much of the current authority of the Presidency would thus likely devolve to these offices, with the President retaining only judicial nomination & legislative veto/signing powers.

As this would require an amendment anyway, the 22nd Amendment could be addressed, such that the President and Vice Presidents would be elected separately, thus 'unbundling' the three policy areas to the benefit of consumers (voters).

Pandaemoni writes:

Speaking of Federal agencies that perform the same function, Freddie Mac and Fannie Mae. There are historical reasons why the two are separate, but the only reason they remain separate is that political intractability makes it too much trouble to merge them.

Greg writes:

Obama apparently wants Congress to let him fast-track agency mergers. I almost drove my car off the road out of excitement when I heard it on the radio this morning.

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