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IB93026: Executive Branch Reorganization Harold C. Relyea Government and Finance Division September 22, 2000 CONTENTS
At the beginning of his tenure, President Clinton pledged his Administration to a program of "reinventing government," beginning with a National Performance Review (NPR), announced shortly after the inauguration, to find ways to make the federal government more efficient, economical, and effective. The result was a September 1993 report proposing various organizational and operational changes. In a third-year anniversary report, the NPR indicated that 43% of its initial 833 agency action items were completed and 42% were in progress, and that 38% of its initial 130 management systems action items were completed and 49% were in progress. Of an additional 187 agency recommendations, 19% were completed and 62% were in progress. As of January 1996, the report indicated that the executive workforce had been reduced by nearly 240,000. In addition, it stated that almost 2,000 obsolete field offices had been closed and approximately 200 programs and agencies--such as the Tea-Tasters Board, Bureau of Mines, and wool and mohair subsidies--had been eliminated. As of September 1996, said the report, "savings of about $97.4 billion have been ensured through legislative or administrative action." Of the original $108 billion in savings projected in 1993, about $73.4 billion had been realized. Some major NPR recommendations were still awaiting implementation when the November 1994 congressional elections gave the Republicans majority party control of both houses of the 104th Congress. Republican leaders had unveiled a "Contract With America" reform plan in late September 1994. Its core principles regarded the federal government as being too big, spending too much, being unresponsive to the citizenry, and perpetrating burdensome regulations. Consequently, at least two distinct agendas for reforming and restructuring the federal government were before the 104th Congress. At its conclusion, both the President and Republican congressional leaders could claim some victories in downsizing government. No department, however, was eliminated, and only a few small agencies were abolished. Administration and congressional reinvention efforts resulted in largely modest accomplishments during the 105th Congress. Major exceptions were the overhaul of the structure and operations of the Internal Revenue Service and the consolidation of the foreign policy agencies, both of which were realized as a result of cooperation between the Clinton Administration and Republican congressional leaders. For the 106th Congress, indications are that executive reorganization and reinvention are neither major nor high priority items. This issue brief views reorganization as involving the alteration and relocation of both programs and the administrative structure of the executive branch for reasons of efficiency, economy, and direction. The underlying issue is who reorganizes--Congress or the President--and by what authority and, also, for what purpose? Some other related administrative and management reforms are tracked as well. As the 106th Congress moves into its final months, reorganization and reinvention legislation continue to be neither major nor high priority items. Among the presidential nominees, however, Vice President Gore has extolled the efforts of the National Performance Review, indicated a desire to continue to build on that reform initiative, and has called for the creation of a new "e-government" to help eliminate bureaucratic red tape and make government more accessible to the people by placing nearly all government services on-line by 2003. Texas Governor George W. Bush has also expressed a desire to reshape the federal government, possibly by cutting an additional 2% of the executive workforce, turning many government functions over to contractors, and creating a $100 million fund to support e-government initiatives. For well over a century, the structure and program responsibilities of the federal executive branch, including all of the departments and agencies, were determined by Congress. In the aftermath of World War I, however, with the rise of the new public administration profession and growing sentiment for attaining efficiency and economy in government, came efforts to strengthen the President's management ability. In 1932, the Chief Executive was statutorily authorized to issue executive orders proposing reorganization within the executive branch for purposes of reducing expenditures and increasing efficiency in government. A reorganization order became effective after 60 days unless either House of Congress adopted a resolution of disapproval. When President Herbert Hoover submitted 11 different reorganization orders, all were disapproved by the House of Representatives on the grounds that his newly elected successor, Franklin D. Roosevelt, might have different reorganization ideas. President Roosevelt did submit a number of reorganization orders pursuant to a revised and extended version of the 1932 statute, which eventually expired automatically in 1935. Some major actions taken in these orders included creating procurement and disbursement divisions in the Treasury Department, establishing an enlarged National Park Service in the Interior Department, and making the Farm Credit Administration an independent agency. Congress subsequently mandated a similar arrangement in a 1939 statute. Once again, the objective was to achieve efficiency and economy in administration. A presidential reorganization plan, submitted to Congress, became effective after 60 days unless both houses of Congress adopted a concurrent resolution of disapproval. In his initial reorganization plan, President Franklin D. Roosevelt created the Executive Office of the President. Such reorganization authority, renewed periodically a dozen times between 1945 and 1984, with slight variation, remained available to the President for nearly half a century. At different junctures, qualifications were placed upon its exercise. For example, reorganization plans could not abolish or create an entire department, or deal with more than one logically consistent subject matter. Also, the President was prohibited from submitting more than one plan within a 30-day period and was required to include a clear statement on the projected economic savings expected to result from a reorganization. Modification of the President's reorganization plan authority was made necessary in 1983 when the Supreme Court, in the Chadha case (462 U.S. 919), effectively invalidated continued congressional reliance upon a concurrent resolution to disapprove a proposed plan. Under the Reorganization Act Amendments of 1984, which were signed by President Reagan on November 8, several significant changes were made in the reorganization plan law. Any time during the period of 60 calendar days of continuous session of Congress following the submission of a reorganization plan, the President might make amendments or modifications to it. Within 90 calendar days of continuous session of Congress following the submission of a reorganization plan, both houses must adopt a joint resolution (which, unlike a concurrent resolution, becomes law with the President's signature -- a central issue in the Chadha case) for a plan to be approved. This amendment, however, continued the President's reorganization plan authority only to the end of 1984, when it automatically expired (see 5 U.S.C. 901-912 (1988)). Neither President Reagan nor President Bush requested its reauthorization. Likewise, President Clinton did not seek its renewal, although his National Performance Review (see below) recommended this course of action in September 1993. Currently, in the absence of reorganization plan authority, the President may propose executive branch reorganizations to be realized through the normal legislative process. The Departments of Energy, Education, and Veterans Affairs were established in this manner in recent years. This approach, however, is devoid of the action time frame and required final vote of the reorganization plan arrangement that expedites reorganization. The President might attempt a minor reorganization, such as establishing a small, temporary entity within the Executive Office of the President, by issuing a directive, such as an executive order. Attempting more ambitious reorganizations through a presidential directive may, if not ultimately found to be illegal, incur congressional displeasure and subsequent legislative and fiscal reaction. An ambitious effort at realizing executive branch reorganization and reform was launched by President Clinton at the outset of his administration. On March 3, 1993, he initiated a National Performance Review (NPR) to be conducted under the leadership of Vice President Albert Gore, Jr. "Our goal," said the President, "is to make the entire federal government both less expensive and more efficient, and to change the culture of our national bureaucracy away from complacency and entitlement toward initiative and empowerment. We intend to redesign, to reinvent, to reinvigorate the entire national government." The initial NPR report, From Red Tape to Results: Creating a Government That Works Better & Costs Less, was delivered to the President on September 7, 1993. Various accompanying supplemental reports on both specific agencies and functional areas of government were subsequently published during 1994. (Most NPR literature may be reviewed and downloaded by consulting the NPR website "library" at http://www.npr.gov.) Although the bulk of the report's almost 380 major recommendations (broken into over 1,230 action items) were directed to management reforms, several proposals addressed executive reorganization, including one for congressional restoration of presidential reorganization plan authority. During the 12 months after the NPR report was issued, its recommendations were implemented by 22 presidential directives, several enacted bills, and various agency actions. Anniversary reports, marking progress in implementing NPR recommendations, have been issued in September of 1994, 1995, and 1996. The last of these indicated that 43% of the NPR's initial 833 agency action items were completed and 42% were in progress, and that 38% of its initial 430 management systems action items were completed and 49% were in progress. Of an additional 187 agency recommendations, 19% were completed and 62% were in progress. As of January 1996, the executive workforce had been reduced by nearly 240,000. In addition, almost 2,000 obsolete field offices had been closed and approximately 200 programs and agencies -- such as the Tea-Tasters Board, Bureau of Mines, and wool and mohair subsidies -- had been eliminated. As of September 1996, said the report, "savings of about $97.4 billion have been ensured through legislative or administrative action." Of the original $108 billion in savings projected in 1993, about $73.4 billion had been realized. The Clinton Administration renewed its effort at reinventing government in mid-January 1995 when the Vice President and others formally launched Phase 2 of the NPR. Details about Phase 2 reinvention plans were revealed in the President's FY1996 budget, presented to Congress on February 6, 1995. Late in February, the President announced new proposals in regulatory reform, including a page-by-page review of federal regulations to determine those that were obsolete, replaceable by private sector alternatives, or better administered by state and local government. He also directed that the performance of regulatory agencies and front-line regulators be measured in terms of results and not process accomplishments; sought to convene immediately, in locations throughout the country, consultative meetings between the front-line regulators and persons affected by their regulations; and promoted a regulatory process based upon consensual negotiations between regulators and regulatees. Clinton Administration proposals for abolishing the ICC, reorganizing the Department of Transportation, and reconstituting the Federal Aviation Administration's air traffic control services in a wholly-owned government corporation were introduced in Congress in early April. The elimination of the ICC was subsequently realized in December 1995. Certain functions of the Commission were transferred to the Surface Transportation Board, newly established within DOT by the termination statute (109 Stat. 803). With the convening of the 105th Congress, the Clinton Administration's reinvention effort entered a new phase emphasizing three themes: improved service delivery; use of partnerships and community-based strategies to solve problems, not big government; and techniques for improving performance in a time of diminishing resources, including the use of performance-based organizations (PBOs). As a reflection of its new phase of operations, the NPR, known heretofore as the National Performance Review, became the National Partnership for Reinventing Government in January 1998. Support for the performance of selected governmental functions through PBOs was reiterated in the President's FY1998 budget. The PBO innovation involved rechartering certain federal executive agencies to permit them to negotiate alternative approaches to procurement and personnel rules and to increase their accountability for financial and program results. Resulting increased efficiency would allow the agencies to downsize their workforce or use their cost savings to improve services. (See CRS Report 97-72 under FOR ADDITIONAL READING). Legislation to convert the Patent and Trademark Office (PTO) of the Department of Commerce into a PBO was proposed by the Clinton Administration in 1995, but it received little attention during the 104th Congress; similar legislation remained on the Senate legislative calendar when the 105th Congress adjourned. When the agency was restructured by the American Inventors Protection Act of 1999 (113 Stat. 1537-564), the reconstituted PTO insisted it was a PBO, but that characterization was doubtful in the view of many analysts. Overhauling the structure and operations of the Internal Revenue Service (IRS) was a major accomplishment of the 105th Congress. Perceptions of IRS mismanagement and misdeeds engendered considerable congressional antipathy for the agency. In late 1995, Congress mandated the National Commission on Restructuring the Internal Revenue Service to review, evaluate, and make recommendations concerning IRS organization, paper and return processing, infrastructure, and collection process, as well as various aspects of its practices and operations (109 Stat. 509). In late June 1997, released its report (available at http://www.house.gov/natcommirs/final.htm). Among its recommendations were proposals for better congressional oversight of the IRS; statutory creation of an independent (no government officials) Board of Directors to oversee IRS management and operations; strengthening the role of the Secretary of the Treasury in setting tax policy; expansion of the authority of the IRS Commissioner over personnel and senior manager accountability; and other management and budget improvements. Although some competition developed between the White House and congressional leaders to seize the IRS reform initiative, the Clinton Administration subsequently abandoned its opposition to a congressional plan for a wide-ranging overhaul of the IRS. A reform bill from the House Committee on Ways and Means, with little opposition or floor debate, received House approval on a 426-4 vote on November 5, 1997. A counterpart measure emerged from the Senate Committee on Finance on April 22, 1998, and was subsequently approved unanimously by the Senate on May 7, clearing the way for a conference. The House gave the conferees' report its approval on a 402-8 record vote on June 25, the Senate concurring on July 9 by a vote of 96-2. President Clinton signed the measure into law (112 Stat. 685) on July 22, 1998. In another policy area, press accounts in late March 1997 revealed that the Clinton Administration was revisiting the long-discussed and contentious matter of the reconfiguration and consolidation of the foreign policy agencies. Prolonged and heated debate over such a reorganization during the 104th Congress had resulted in a presidential veto. President Clinton's willingness to return to the issue was seen to have been prompted by his willingness to accommodate congressional Republicans in exchange for their support of his foreign policy agenda. The President approved a broad reorganization proposal on April 17, just before a Senate vote on a pending chemical weapons ban treaty. The plan called for the folding of two independent agencies -- the Arms Control and Disarmament Agency and the United States Information Agency -- into the Department of State. In addition, the Agency for International Development remained a separate entity, but its director would report to the Secretary of State rather than to the President, as current law prescribed. The plan eventually was included in the provisions of the State Department authorization bills (H.R. 1757, S. 903). The House measure was adopted by voice vote on June 11; the Senate passed its version on a 90-5 vote on June 17. Conferees on the legislation deadlocked on a House provision barring aid for family planning groups that use their own money to finance overseas abortions, and attempts to reach a compromise with the White House collapsed as the first session of the 105th Congress drew to a close. The Clinton Administration subsequently consulted with congressional leaders early in 1998 and revived the conference discussions. A conference report (H.Rept. 105-432) was approved by the House on a voice vote on March 26. The Senate followed on April 28, approving the report on a 51-49 vote. President Clinton vetoed the bill on October 21, but the reorganization proposal, without the objectionable abortion restriction rider, was included in the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, signed into law by President Clinton on October 21 (112 Stat. 2681-761). Although first session indications were that executive reorganization and reinvention were neither major nor high priority items for the 106th Congress, the transfer of the Panama Canal to the Republic of Panama, under the terms of the Panama Canal Treaty of 1977, remained on schedule, the ceremonial hand over occurring on December 14, 1999, with the Panama Canal Commission dissolving shortly thereafter. In the aftermath of the May 25, 1999, release of the final report of the House Select (Cox) Committee on U.S. National Security and Military/Commercial Concerns with the People's Republic of China discussing security lapses that had apparently allowed the Chinese to acquire U.S. nuclear weapons and related technology, a special investigative (Rudman) panel of the President's Foreign Intelligence Advisory Board (PFIAB) released a June 15 report concerning these and other Department of Energy managerial failures. The PFIAB panel recommended a "radical" restructuring of the Energy Department in this regard because, in their view, it is "incapable of reforming itself." At a June 22 hearing before the House Committee on Commerce, Secretary of Energy Bill Richardson expressed opposition to creating an independent nuclear security agency, but by the first week of July, he accepted the idea of a semiautonomous agency within Energy to manage the national labs. When conferees on the National Defense Authorization Act for FY2000 (S. 1059) reported on August 6, they provided for the establishment of a new National Nuclear Security Administration (NNSA) as a semiautonomous entity within Energy and a related under secretary position (H.Rept. 106-301). Secretary Richardson expressed reservations about this proposal. Nonetheless, the House approved the conference committee report on September 15 on a 375-45 vote, and the Senate subsequently adopted it on September 23 on a 93-5 vote. Signing the legislation into law on October 5 (113 Stat. 512), President Clinton, in a surprise move, indicated his displeasure with provisions creating the National Nuclear Security Administration (NNSA) and announced that he would withhold appointing the new under secretary for information security until Congress addressed certain "deficiencies" in the organizational arrangements. Secretary Richardson was directed by the President to perform the duties of the new under secretary and to assign department officers and employees to a concurrent office within the NNSA as deemed necessary. The President's action stunned many legislators closely associated with the NNSA structuring. At a October 19 joint hearing before the Senate Committees on Energy and Natural Resources and Governmental Affairs, Secretary Richardson sought to assure Senators that the administration was in agreement with the spirit of the legislation, but felt that the NNSA provisions constituted "a serious problem." He asked them to revisit the law and make modifications giving him more control over information security administration. On January 7, he transmitted to Congress the NNSA implementation plan (available at http://www.doe.gov/news/nnsa.pdf ). The new agency began operations on March 1. The next day, Secretary Richardson announced that President Clinton intended to nominate General John A. Gordon, who was serving as the deputy director of the Central Intelligence Agency, to be the DOE's new under secretary for nuclear security and the director of the NNSA. He was subsequently confirmed by the Senate on June 14, 2000, as the head of NNSA. Interest in a bi-partisan, blue ribbon, national study commission on government organization and administrative management was renewed when Senator Fred Thompson, chairman of the Senate Committee on Governmental Affairs, introduced, with bipartisan sponsorship, the Government for the 21st Century Act (S. 2306) on March 28, 2000. The legislation mandates a nine-member Commission on Government Restructuring and Reform, which, by December 2002, is to provide a preliminary report to the President and Congress proffering recommendations on reforming and restructuring the organization and operations of the executive branch of the federal government. After a public comment period, the panel then submits its final report. Among the goals for improvements in the performance of the government set by the legislation are a restructuring of the Cabinet and sub-Cabinet level agencies; a substantial reduction in the costs of administering government programs; a dramatic and noticeable improvement in the timely and courteous delivery of services to the public; and responsiveness and customer-service levels comparable to those achieved in the private sector. The measure was referred to the Senate Committee on Governmental Affairs, and a May 4 hearing on the measure was held by the Subcommittee on Oversight of Government Management, Restructuring, and the District of Columbia. The major focus of the subcommittee's hearing was on "reinventing government," with particular emphasis on the accomplishments of the NPR. An invitation to NPR director Morley Winograd to testify at the hearings was rebuffed by the Vice President's office in a letter citing "the confidentiality of presidential decision-making." Among those who did appear before the subcommittee, Donald F. Kettl, a University of Wisconsin professor who had conducted extensive research on the NPR reforms, gave the effort an overall grade of "B," saying there was "room for improvement." Brookings Institution scholar Paul C. Light added that the NPR program had created "unnecessary politicization of government reform." Two other analysts were also critical of the NPR effort. (Prepared statements of witnesses may be found at [www.senate.gov/~gov_affairs/050400_witness.htm]) S. 2306 (Thompson)
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS U.S. Congress. House. Committee on Government Reform and Oversight. Creating a 21st Century Government. H.Rept. 104-434, 104th Congress, 1st session. Washington, U.S. Govt. Print. Off., 1995. 31 p. ---- Federal Government Management: Examining Government Performance as We Near the Next Century. H.Rept. 104-861, 104th Congress, 1st session. Washington, U.S. Govt. Print. Off., 1996. 213 p. ---- Making Government Work: Fulfilling the Mandate for Change. H.Rept. 104-435, 104th Congress, 1st session. Washington, U.S. Govt. Print. Off., 1995. 60 p. 03/28/00 -- Senator Fred Thompson, chairman of the Senate Committee on Governmental Affairs, introduced legislation (S. 2306), with bipartisan sponsorship, mandating a nine-member Commission on Government Restructuring and Reform to make recommendations to the President and Congress to improve the organization and operations of the executive branch of the federal government for the 21st century. 01/01/98 -- The National Performance Review became the National Partnership for Reinventing Government, retaining the NPR acronym, and currently under the direction of Morley Winograd, who had succeeded Elaine Kamarck in September 1997. 01/11/97 -- At a Blair House meeting of the new Cabinet, Vice President Gore presented a brief set of papers, which he dubbed "reinvention marching orders," emphasizing three themes: improved service delivery; use of partnerships and community-based strategies to solve problems, not big government; and techniques for improving performance in a time of diminishing resources, including the use of performance-based organizations. The issuance of the Blair House papers marked the beginning of a new stage of the NPR. 01/07/97 -- With the opening of the 105th Congress, many members of the House and Senate and President Clinton have a mutual interest in further downsizing the federal government. Returning House Republican freshmen of the 104th Congress would eliminate the Departments of Commerce and Energy. The President would continue to reduce the federal workforce and privatize the performance of some government functions, experimenting with performance-based organizations in a few cases. Major reorganization of the executive branch or its principal components does not appear to be likely. 09/09/96 -- The National Performance Review marked its third-year anniversary, reporting that 43% of its initial 833 agency action items were completed and 42% were in progress, and 49% of its initial 430 management systems action items were completed and 49% were in progress; of an additional 187 recommendations, 19% were completed and 62% were in progress; "savings of about $97.4 billion have been ensured through legislative or administrative action" and an "additional $5.2 billion in savings is contained in legislation pending before Congress;" and, as of January 1996, an executive workforce reduction of nearly 240,000 employees had been realized. 09/11/95 -- The National Performance Review marked its second year anniversary, reporting that 32% of its initial agency action items were completed and 61% were in progress, and 27% of its initial 417 management systems action items were completed and 63% were in progress; more than 180 additional recommendations had been made; and "about $57.7 billion of [approximately $108 billion] projected savings have been achieved" and an "additional $4.3 billion in savings are currently pending before Congress." 01/12/95 -- Vice President Gore, OMB Director Alice Rivlin, and other officials formally launch Phase 2 of the National Performance Review. 09/27/94 -- Republican leaders of the House of Representatives unveiled a "Contract With America" reform plan with core principles that regard the federal government as being too big, spending too much, unresponsive to the citizenry, and the perpetrator of burdensome regulations. 09/14/94 -- The National Performance Review marked its one-year anniversary, reporting that over 90% of its recommendations "are under way," implementation occurring through 22 presidential directives, several enacted bills, and a variety of agency actions, with the result that "$46.9 billion of NPR's $108 billion in proposed savings are already enacted" and another "$16 billion in savings is pending before Congress." 09/07/93 -- The Task Force on National Performance Review provided its final report to President Clinton, offering some 380 major recommendations for government reform. The bulk of these proposals concerned management improvement, but several were directed at agency reorganization, consolidation, and field structure overhaul. 03/03/93 -- President Clinton announced he was establishing a task force, to be headed by Vice President Gore, to evaluate the efficiency, economy, and effectiveness of every federal program and service, and make recommendations for "reinventing government," including proposals for executive branch reorganization. Gazell, James A., ed. "The National Performance Review and Public Administration." Special issue. International Journal of Public Administration, v. 20, no. 1, 1997: 1-247. Kettl, Donald F. Reinventing Government? Appraising the National Performance Review. Washington, Brookings Institution, 1994. 78 p. ---- Reinventing Government: A Fifth-Year Report Card. Washington, Brookings Institution, 1998. 71 p. ---- and John J. DiIulio, Jr., eds. Inside the Reinvention Machine: Appraising Governmental Reform. Washington, Brookings Institution, 1995. 198 p. National Performance Review. Most literature may be reviewed and downloaded by consulting the NPR web site "library" at http://www.npr.gov. Office of the Vice President. Common Sense Government Works Better & Costs Less. Washington, U.S. Govt. Print. Off., September 1995. 158 p. ---- From Red Tape to Results: Creating a Government That Works Better & Costs Less. Report of the National Performance Review. Washington, U.S. Govt. Print. Off., September 1993. 168 p. ---- From Red Tape to Results: Creating a Government That Works Better & Costs Less: Status Report, September 1994. Report of the National Performance Review. Washington, U.S. Govt. Print. Off., September 1994. 127 p. ---- The Best Kept Secrets In Government. A Report to President Bill Clinton. National Performance Review. Washington, U.S. Govt. Print. Off., September 1996. 245 p. Thompson, James. "Reinvention Revolution." Government Executive, v. 28, May 1996: 39-41. U.S. General Accounting Office. Management Reform: Status of Agency Reinvention Lab Efforts. GAO/GGD-96-69. [Washington] March 1996. 157 p. CRS Report RL30603 . Commission on Government Restructuring and Reform: The Proposed Government in the 21st Century Act (S. 2306), by Ronald C. Moe. CRS Report 97-538 . Foreign Policy Agency Reorganization in the 105th Congress, by Susan B. Epstein, Larry Q. Nowels, and Steven A. Hildreth. CRS Report 97-72. Performance-Based Organizations in the Federal Government: A Reinvention Innovation, by Harold C. Relyea. CRS Report 92-293. Reorganizing the Executive Branch in the Twentieth Century: Landmark Commissions, by Ronald C. Moe. CRS Report RL30596 . The National Performance Review and Other Government Reform Initiatives: An Overview, 1993-1999, by Harold C. Relyea, Maricele J. Cornejo Riemann, and Henry B. Hogue. Return to CONTENTS section of this Issue Brief. |
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