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Executive Summary #1181es on Federal Budget

May 20, 1998

May 20, 1998 | Executive Summary on Federal Budget

BG1181es:Five Good Reasons To Close Down The Department of Commerce

Should a balanced budget give the President or Congress a license to waste tax dollars as long as the budget stays in balance? Not if they want to heed the intent of the 103rd Congress, which passed the Government Performance and Results Act in 1993 to require all federal agencies to submit strategic plans to Congress that clearly specify their missions and goals. In the words of House Majority Leader Richard Armey (R-TX), it enables Congress to ask the right questions: "What's working, what's wasted, what makes any difference, what's duplicative?"

The debut of these plans has been characterized by a torrent of questionable missions, goals, and objectives; faulty tools to measure performance; and clear signs of waste and duplication. Ironically, the plans the agencies themselves produce for Congress highlight much of their own mismanagement, waste, and duplication--problems that the government's own watchdogs, the U.S. General Accounting Office (GAO) and agency inspectors general (IGs), have been reporting for years. The Department of Commerce is a particularly egregious example of an agency whose own plans highlight how little it is needed. Commerce's final strategic plan, after four years of planning, drafts, and revisions, ranked dead last among agency plans, receiving the worst grade--28 out of 100. Its FY 1999 annual performance plan did not do much better, scoring a miserable 33 out of 100.

Fortunately, at least some Members of Congress seem willing to question why an agency that clearly is failing to accomplish its stated mission should exist at all, let alone receive a funding increase as Commerce would under the President's budget. Representative John Kasich (R-OH), Chairman of the House Budget Committee, for example, has proposed that the Commerce Department be eliminated in FY 1999. Given the pattern of negative evaluations by the government's own watchdogs, Congress would be wise to heed Kasich's proposal and close down the Department of Commerce.

In FY 1998, Congress gave the Department of Commerce a 10 percent budget increase over FY 1997, raising its budget to $4.2 billion and its staff level to include 35,000 full-time employees. In return, the Department submitted to Congress a strategic plan that ranked dead last and an FY 1999 performance plan that ranked 18th out of the 24 plans graded. Yet, in FY 1999, the Department of Commerce is asking Congress to reward its dismal Results Act showing with a 16.7 percent budget hike.

The evidence clearly indicates that Congress will simply waste more taxpayer money by continuing to fund this agency. In 1992, the GAO reported that, according to its own inspector general, the Department of Commerce had evolved into "a loose collection of more than 100 programs delivering services to about 1,000 customer bases." Six years later, nothing has changed. The Results Act reports underscore more clearly than ever that the Department of Commerce suffers from five basic problems: mission creep, wasteful spending, an inability to design appropriate methods to measure performance, major management deficiencies, and many expired authorizing
statutes.

REASON #1: Mission Creep and Program Duplication
A 1997 GAO report to Congress on Commerce's draft plan pointed out that the Department shares responsibility for major budget functions with 14 other departments and agencies. For example, the Economic Development Administration (EDA) is one of at least 62 community and economic development programs throughout the government.

REASON #2: Wasteful Spending
Commerce continues to house programs that are wasteful, mismanaged, or simply blatant aid to special interests, including major corporations. For example, the Advanced Technology Program (ATP) spends $200 million per year funding commercial research and development projects. Many of its largest beneficiaries, according to an MSNBC study, include such large corporations as IBM and General Motors.

REASON #3: Inability to Measure Performance
In Congress's evaluation of agency FY 1999 performance plans, the Department of Commerce scored 3 out of a possible 30 points for the quality of its performance measures. Only the Department of State and the Social Security Administration received worse scores.

REASON #4: Major Management Deficiencies
The Department's own inspector general has noted that Commerce does a poor job of planning, acquiring, and managing its systems. As a result, there are serious problems in many of Commerce's major system modernization programs, and pervasive inefficiency and mismanagement in planning and purchasing commercial systems and equipment. Yet Commerce's plan failed to address ongoing problems, such as those in its $4.5 billion National Weather Service modernization effort.

REASON #5: Expired Authorizing Statutes
At least ten laws authorizing various Commerce programs have expired. For example, the Public Works and Economic Development Act of 1965 expired on September 30, 1982; the Export Administration Act of 1979 expired on August 20, 1994; the American Technology Preeminence Act of 1991 expired on September 30, 1993; and the International Trade Administration's Export Program Act expired in 1996. Programs that congressional authorizing committees cannot justify should not be funded.

A Cabinet department reporting directly to the President should have a clearly defined mission and should not simply tie together a loose collection of agencies. No case has been made that such functions cannot be performed in the private sector or elsewhere in government, or that they are more valuable than the budgetary resources consumed. The Results Act was intended to trigger decisions to reshape the federal government. Congress should do so by eliminating this unnecessary agency.

Angela Antonelli is former Director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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