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Administration Unveils Budget Proposal, Comprehensive Plan for Reorganising Executive Branch

President Trump recently released a blueprint for the 2018 budget that proposes to eliminate the U.S. Trade and Development Agency and the Overseas Private Investment Corporation and significantly increase defence spending. The USTDA currently helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies, while OPIC is tasked with mobilising private capital to help address critical development challenges. While the budgets that are ultimately approved by the U.S. Congress tend to differ significantly from those initially proposed by the executive branch, the budget blueprint provides a fairly clear picture of the administration’s intentions for the next couple of years.

Among other things, the budget blueprint proposes to strengthen the International Trade Administration’s trade enforcement and compliance functions, including antidumping and countervailing duty investigations, while rescaling the agency’s export promotion and trade analysis activities. The president is also seeking to advance his plan to strengthen border security by allocating US$314 million to recruit, hire and train 500 new Border Patrol agents as well as 1,000 new U.S. Immigration and Customs Enforcement law enforcement personnel, plus associated support staff, in 2018. In addition, the budget would focus the U.S. Department of Labor's Bureau of International Labor Affairs on ensuring that U.S. trade agreements are fair for American workers while eliminating its “largely non-competitive and unproven grant funding.”

In all, the budget blueprint requests US$44.1 billion in net discretionary budget authority for the U.S. Department of Homeland Security, a US$2.8 billion or 6.8 percent increase from the 2017 annualised continuing resolution level. US$4.5 billion in additional funding would be for programmes to strengthen the security of U.S. borders and enhance the integrity of the U.S. immigration system. The U.S. Department of Commerce’s budget would be reduced by 15.7 percent, from US$9.2 billion to US$7.8 billion, despite the president’s stated commitment to strengthen the ITA’s AD/CV duty programmes, while the U.S. Department of Agriculture’s budget would be cut by 20.7 percent to US$17.9 billion.

Other agencies that would stand to lose a large portion of their funding include the Environmental Protection Agency (down by 31.4 percent to US$5.7 billion), the U.S. State Department (down by 28.7 percent to US$27.1 billion), the U.S. Department of Labor (down by 20.7 percent to US$9.6 billion), the U.S. Department of Health and Human Services (down by 16. 2 percent to US$65.1 billion), the U.S. Department of Transportation (down by 12.7 percent to US$16.2 billion), the U.S. Department of the Interior (down by 11.7 percent to US$11.6 billion) and the U.S. Department of Energy (down by 5.6 percent to US$28.0 billion, with non-National Nuclear Security Administration spending down by 17.9 percent to US$14.1 billion). On the other hand, funding for the U.S. Department of Defense would grow by 10.0 percent to US$574.0 billion. No mention is made in the budget proposal of the Office of the U.S. Trade Representative.

The budget cuts faced by the EPA would be particularly drastic, resulting in a staff reduction of over 20 percent (approximately 3,200 fewer positions), eliminating the popular Energy Star programme, and potentially hampering the agency’s ability to implement the chemical reform legislation that was enacted into law last year. If such cuts were adopted, U.S. states would be expected to fill the shoes of the federal government by taking an even more pro-active role in the coming years in such areas as chemical safety and climate change.

Meanwhile, the president issued on 13 March an executive order intended to improve the efficiency, effectiveness and accountability of the executive branch by directing the U.S. Office of Management and Budget to propose a plan to reorganise governmental functions and eliminate unnecessary agencies, components of agency and agency programmes. According to the executive order, agency heads have until around mid-September 2017 to submit to OMB a proposed plan to reorganise their agency, if appropriate, in order to improve its efficiency, effectiveness and accountability. OMB will also publish a notice in the Federal Register seeking public input regarding improvements in the organisation and functioning of the executive branch.

A proposed plan will have to be submitted to the president by around this time next year. Such a plan must include, as appropriate, recommendations to eliminate unnecessary agencies, components of agencies and agency programmes, and to merge functions, as well as recommendations for any legislation or administrative measures necessary to achieve the proposed reorganisation. In developing the plan OMB will have to consider the following factors, in addition to any other relevant factors:

  • whether some or all of the functions of an agency, a component or a programme are appropriate for the federal government or would be better left to state or local governments, or to the private sector through free enterprise;
  • whether some or all of the functions of an agency, a component, or a programme are redundant, including with those of another agency, component or programme;
  • whether certain administrative capabilities necessary for operating an agency, a component or a programme are redundant with those of another agency, component or programme;
  • whether the costs of continuing to operate an agency, a component or a programme are justified by the public benefits it provides; and
  • the costs of shutting down or merging agencies, components or programmes, including the costs of addressing the equities of affected agency staff.
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