(From the Jan. 23, 2012, issue of Rubber & Plastics News)
WASHINGTON—The tire, auto aftermarket and labor sectors are reacting cautiously to President Obama's plan to consolidate six federal economic and business agencies into one.
In a Jan. 13 speech, Obama asked Congress to grant him authority to reorganize the federal government, beginning with trade and export agencies.
Specifically, Obama asked to combine five agencies—the Small Business Administration, the Office of the U.S. Trade Representative, the U.S. Trade and Development Agency, the Overseas Private Investment Corp. and the Export-Import Bank—with the core business and trade functions of the Commerce Department.
The agencies frequently deal with companies and issues involving the rubber industry. For example, the U.S. Trade Representative was intimately involved in the imposition of tariffs on Chinese-made light vehicle tires.
Leaner, more representative
The consolidation, Obama said, would make a leaner, more responsive agency geared toward helping small businesses and U.S. exports. He estimated the action would eliminate 1,000 to 2,000 government jobs—mostly through attrition—and save some $3 billion over the next decade.
The new agency, for which no name has yet been suggested, would have four tightly integrated sections covering trade and investment, small business and economic development, technology and innovation, and economic statistics, White House spokesmen said.
Also on Jan. 13, as part of the reorganization plan, Obama raised Small Business Administrator Karen Mills to the Cabinet, effective immediately.
The White House intends to send a bill to Congress shortly, granting the president both the authority to consolidate federal agencies and an up-or-down, fast-track congressional vote on each proposed consolidation.
Congressional Republicans and Democrats expressed skepticism over the proposal. Republicans accused Obama of grandstanding and acting without first consulting Congress; Democrats were concerned that small agencies such as SBA and USTR would be more effective if they remained independent.
Although the Business Roundtable endorsed Obama's proposal, business interests—including those in the tire and rubber industries—generally have been guarded in their initial reaction to the consolidation plan.
The Rubber Manufacturers Association hasn't yet had an internal discussion on the president's proposal, according to an RMA spokesman.
“In the RMA's experience, Commerce and USTR have been fairly responsive, so any change to their organization would need to preserve the best aspects of their functionality,” the spokesman said.
“But private industry is constantly reorganizing to become more efficient, and if you can reorganize the federal government to become more efficient, we applaud the effort,” he said.
The president's proposals represent both good news and bad news for tire dealers and other small businesses, according to Roy Littlefield, executive vice president of the Tire Industry Association.
Raising the post of SBA administrator to Cabinet level was laudable, Littlefield said in a written statement.
“We welcome any opportunity to have 'a seat at the table,'” he said. “At the same time, we are disappointed with the president's proposal to merge the SBA with some Commerce Department agencies. Ã It takes persistence and patience to nurture our small business sector, and it requires unique programs and attention.”
The Motor & Equipment Manufacturers Association is reviewing the proposal and discussing it with its members, according to Ann Wilson, MEMA senior vice president of government affairs.
“These are very important agencies to our members, and we would want to make sure any changes to their operations would increase their level of service and understanding,” Wilson said. “We will get a better idea of what this proposal will do when Congress comes back in session.”
The United Steelworkers—which successfully obtained steep tariffs on Chinese tires from USTR—said it is concerned less with the organization of trade agencies than with their policies.
“We're not giving this a lot of attention, and we're skeptical it will come to pass in an election year,” a USW spokesman said.