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Obama delivers remarks on government reform in the East Room of the White House in Washington, DC |
The move comes against the backdrop of the 2012 elections, where a central theme of the campaign for the Republican presidential nomination has been on reducing government and limiting its influence over Americans.
In proposing to close down the US Commerce Department and merge six agencies, Obama could inoculate himself against Republican charges that he is a big-government liberal.
Analysts were sceptical that Republicans in Congress would act on Obama’s request in an election year.
Obama, in remarks at the White House, said that the overhaul was needed to create “an effective lean government” and would make it easier for US businesses to get help to export their goods, a key part of his economic agenda ahead of the November vote.
“With this authority, we’d help businesses grow, save businesses time and save taxpayer dollars,” he said, outlining his request for powers to reorganise the federal government.
Obama wants to fold together the Office of the United States Trade Representative (USTR) and five other export bodies now spread across Washington into a new, yet-to-be-named department, giving businesses a single point of contact and ensuring federal spending goes further to boost sales abroad.
Other parts of the Commerce Department would be absorbed into different federal agencies under the plan.
With US unemployment high and the economy growing slowly, Obama is trying to boost US trade ties with developing markets such as Asia to spur output.
He has set a goal of doubling US exports in five years – from $1.57tn in 2009 to $3.14tn by 2015.
Trade experts said having one agency in charge of exports should help.
“For the business community, engagement with overlapping agencies streamlined into a coherent process would be an advantage,” said Nick Consonery of the Eurasia Group.
Last March, Obama asked White House budget officials to examine whether to merge the groups as a way to save money and ensure that United States export promotion is as efficient as possible.
A White House official said on Friday the goal of the consolidation was to save $3bn over 10 years. It may also lead to the loss of 1,000 to 2,000 jobs through attrition, the official said.
Obama’s proposal appeared to catch Republicans by surprise.
They said they were reserving judgment until they had seen more details of what he was proposing.
“After presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it’s interesting to see the president finally acknowledge that Washington is out of control,” said Don Stewart, a spokesman for Senate Republican leader Mitch McConnell.
“We’ll be sure to give it a careful review once the White House provides us with the details of what it is he wants to do,” he added.
Republican presidential candidates vying to face Obama in the November election have been focusing in their campaign speeches on the size of the federal government and US deficits, saying they pose a risk to the US economy. Reuters