Ash(es) to Ashes: Reorganizing the Executive Branch

Jan 13 '12

Roy Ash, an important figure in the “battles of the budget” in the 1970s as director of OMB under Presidents Nixon and Ford, died this week.  (His obituary is here.)

Given President Obama’s proposal today on government reorganization — he hopes to merge six agencies dealing with business and trade into one — it is timely to note the history of such efforts and the lessons Roy Ash might teach us on that front.

Ash chaired the 1969 President’s Advisory Council on Executive Organization, which built on a prior study to urge the renaming and restructuring of the Bureau of the Budget (up until two days before the transmission of the reorganization plan to Congress, what would become the Office of Management and Budget was to be called the Office of Executive Management.)  Ash also recommended the creation of the Domestic Council inside the Executive Office of the President, as a vehicle to facilitate creative policy formulation. In his March 1970 message to Congress on the topic, President Nixon famously said that “the Domestic Council will be primarily concerned with what we do; the Office of Management and Budget will be primarily concerned with how we do it, and how well we do it.”

This division of labor didn’t quite work out. But both OMB and a White House domestic policy staff (if not the Council they were supposedly subordinate to) are still crucial parts of the president’s advisory apparatus. As a result, the Ash Council can be compared to the earlier Brownlow Committee (whose 75th anniversary was this week) in terms of its impact on the modern White House.

Like Brownlow, too, the Ash Council emphasized that OMB should be largely driven by those serving the institution of the presidency rather than the incumbent president – by civil servants, not political appointees. That, too, didn’t quite work out – when Ash came back to run OMB himself, he was largely seen by Congress as a political partisan bent on defending the controversial (and later ruled unconstitutional) practice of impoundment. A 1973 reorganization was grounded in the notion that (according to a memo to Nixon) “political management people must be placed in the OMB and put in charge.”

Ash was a strong proponent of using reorganization authority to re-shape the federal bureaucracy – besides OMB, such agencies as EPA, NOAA, and DEA were created in this manner.

Reorganization authority dates to the Economy Act of 1932, extended by a series of Reorganization Acts starting in1939 (see 5 U.S.C. 901-912.) All presidents through Ronald Reagan, except for Gerald Ford, were delegated this power for at least part of their terms. (See the classic book on the topic by Notre Dame’s Peri Arnold, or the very useful CRS reports here and here for more detail.)

The specifics varied over time, but after 1939 generally allowed presidents to submit to Congress a “reorganization plan” which did not require legislative approval – rather, the plan would take effect unless both chambers passed a resolution of dis-approval within a certain period of time. Shifting the default outcome in this way meant most plans did “pass.”  President Reagan did not request renewal of reorganization power after it expired in 1984, nor did Presidents G.H.W. Bush or Clinton (though the National Performance Review recommended he do so.)  George W. Bush’s FY2003 budget urged restoration of this power, but no legislation was subsequently filed to carry it out. Thus Obama’s request today is both old and new, in that this power has been dormant for close to three decades.

Obama proposes merging the U.S. Department of Commerce’s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency, into one department (presumably Commerce) with overall responsibility for managing trade and exports.

So, back to Ash. It is not clear that Obama’s proposal could be enacted using reorganization authority, at least as that authority was circumscribed in successive iterations of the Reorganization Act. A  reorganization plan cannot create new legal authority (as these plans are not meant to circumvent legislation – just the legislative process!)  Nor, after the failure of John F. Kennedy’s 1962 reorganization plan to create a Department of Housing and Urban Affairs, were presidents allowed to submit a plan proposing the creation or abolition of a new executive department.

Thus the most sweeping of the Ash Council’s reorganization proposals could not be achieved by reorganization plan – it required legislation to move forward.  As proposed by Nixon in his 1971 State of the Union address and more completely formulated in March of that year, this would have consolidated seven Cabinet departments into four mega-departments organized on functional grounds – Departments of Human Resources, Natural Resources, Community Development, and Economic Affairs.

The proposal was not dead on arrival, but it did die soon thereafter. It ran up against a simple fact of reorganizational life: members of Congress are themselves organized in ways that protect their connections to (and thus their influence over) different agencies of government important to their constituencies (or fundraising.)  Thus, messing with jurisdictional lines is hazardous business.

Further, unlike the President, Congress has little incentive for government to “work better” (or even cost less) – indeed, as Stanford’s Mo Fiorina has suggested, one can make an argument that an inefficient executive branch is good for members, who can then “fix” things on a case-by-case basis in ways that garner electoral plaudits.

Thus, there is little reason to think Obama’s plan will advance much further than Nixon’s (or even Carter’s less ambitious version of a Department of Natural Resources).  On the other hand, one last Ash legacy is worth noting. After the 1972 election, Nixon announced that he would enact his plan administratively – by requiring that agencies he wanted to merge report to him through a new counsellor to the president for each area. These counsellors (George Shultz was the assistant for economic policy, for instance, while remaining on as Secretary of the Treasury) were immediately dubbed the “Supersecretaries.”

This bold shift did not survive the intensifying pressures of Watergate, and ended when H.R. Haldeman and John Ehrlichman left the White House in late April, 1973 (see Mordecai Lee’s recent book on the topic for more detail).  But it might be an experiment waiting for replication. Given Obama’s newfound willingness to push the limits of executive authority – ranging from drone strikes against US citizens in Yemen to recess appointment strikes against a Senate that says it is not in recess – might the president decide that “we can’t wait” for reorganization authority to be extended?