OMB Tells Federal Agencies to Start Reorganizing

By Cheryl Bolen

The Office of Management and Budget issued a guidance memorandum April 12, directing agencies to begin the process of reorganizing along the lines of the president’s fiscal year 2018 budget, OMB Director Mick Mulvaney said.

On March 13, President Donald Trump signed an executive order intended to start a government-wide review to determine where federal programs can be eliminated or modified and costs saved.

“This is really important to the president,” Mulvaney told reporters at an April 11 briefing. This is part of “draining the swamp” and a centerpiece of the Trump campaign and his administration, he said.

All executive branch departments and agencies are being asked to start from scratch, Mulvaney said. “A literal blank piece of paper and say, ‘If you were going to rebuild the executive branch, what would it look like?’ ” he said.

Soliciting Ideas

The memorandum asks agencies to submit an agency reorganization plan in September as part of their fiscal year 2019 budget submission to the OMB. The plan should include long-term workforce reductions.

Still, the administration is not going into this with an ideological preconception of how it will turn out, Mulvaney said.

“We are not just asking conservative, right-wing think tanks to give us ideas on how to fix this,” he said.

The administration will be soliciting input from the outside, through a website with a video message asking academics and the public for their ideas, Mulvaney said. Administration officials also met April 11 with CEOs and asked for their input, he said.

One suggestion was to restructure the government in terms of function, rather than following the “organically created” structure that has developed over the last two centuries or through the 12 appropriations subcommittees on Capitol Hill, he said.

Proposal From Past

For example, if the government wants to be in the business of trade, it should find all of the functions of government that deal with trade and put them in one place, Mulvaney said.

Indeed, this very proposal was made by former President Barack Obama. In February 2012, the White House sent proposed legislation to Capitol Hill to give the president the authority to reorganize and consolidate federal departments and agencies.

As his first proposal, Obama wanted to create a new department that would consolidate the trade functions of the Department of Commerce, Small Business Administration and four other trade and export agencies. Congress, however, never granted the president the authority to reorganize.

Mulvaney acknowledged that some changes will need legislative authority. "[C]ertainly we’re hopeful to be able to have congressional buy-in to try and get some of this accomplished,” he said.

Reporting Deadlines

Within 180 days of the date of the order, or by Sept. 9, the head of each agency must submit a proposed plan to reorganize the agency, if appropriate, in order to improve the efficiency, effectiveness and accountability of that agency. Mulvaney said preliminary reports would be submitted in June.

Then, “what grows out of this will be hardwired into the 2019 budget, which begins in September,” Mulvaney said. That is when agencies start their budget planning.

The order directs Mulvaney to submit a plan to reorganize all executive branch departments and agencies within 180 days of receiving the public’s suggestions, or March 13, 2018. However, he predicted “real, tangible ideas” out of the executive order by the first of next year.

Leadership from Top

One obstacle is the large number of career officials heading agencies in an acting capacity, who have not been nominated by Trump and who may be reluctant to propose substantive changes.

According to the Partnership for Public Service, as of April 10, out of 553 key positions requiring Senate confirmation, 478 have no nominees and 29 positions have been announced but are awaiting formal nominations.

“Leadership starts at the top,” an OMB staffer said in an email to Bloomberg BNA. “The Cabinet secretaries understand this is what the president wants and they are committed to being invested in the process.”

As additional leaders come on board, they will take on these responsibilities as well, the staffer said.

Further, there are many career staff who would like to get rid of the inefficiencies that make it difficult for them to do their jobs effectively, the OMB staffer said. “We expect they will be forthcoming about ideas to make their programs more effective.”

To contact the reporter on this story: Cheryl Bolen in Washington at

To contact the editor responsible for this story: Paul Hendrie at

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