Delivering Government

Solutions in the 21st Century

Reform Plan and Reorganization Recommendations
TABLE OF CONTENTS

I. The Mandate for Reform .............................................................. 2

II. Organizational Reform Principles ............................................... 8

III. Overview of Organizational Alignment Priorities ...........................14

IV. Looking Ahead ..........................................................................20

V. Government-wide Reorganization Proposals .................................22

Department of Education and the Workforce���������������������������������������������������23

Consolidate Non-Commodity Nutrition Assistance Programs into HHS, 

Rename HHS the Department of Health and Public Welfare, 

and Establish the Council on Public Assistance �����������������������������������������������27

Consolidate Mission Alignment of Army Corps of Engineers Civil Works

with Those of Other Federal Agencies �����������������������������������������������������������30

Reorganize Primary Federal Food Safety Functions into a Single Agency,

the Federal Food Safety Agency ���������������������������������������������������������������������32

Move Select USDA Housing Programs to HUD �������������������������������������������������35

Merge the National Marine Fisheries Service (NMFS) 

with the U.S. Fish and Wildlife Service (FWS) �������������������������������������������������37

Consolidation of Environmental Cleanup Programs �����������������������������������������39

Optimization of Humanitarian Assistance ������������������������������������������������������41

Development Finance Institution�������������������������������������������������������������������45

Structural Transformation of Central Washington-Based Bureaus

at the U.S. Agency for International Development �������������������������������������������47

Reorganizing the U.S. Office of Personnel Management �����������������������������������51

Consolidation of Federal Veterans Cemeteries �������������������������������������������������57

Reorganizing Economic Statistical Agencies �������������������������������������������������� 60

Consolidation of the Department of Energy’s Applied Energy Offices 

and Mission Refocus�������������������������������������������������������������������������������������63
Divesting Federal Transmission Assets���������������������������������������������������������� 66

Restructure the Postal Service ���������������������������������������������������������������������� 68

DOT Mission Adjustments�����������������������������������������������������������������������������71

Reform Federal Role in Mortgage Finance�������������������������������������������������������75

Create the Bureau of Economic Growth ����������������������������������������������������������78

U.S. Public Health Service Commissioned Corps ����������������������������������������������81

Improving NASA’s Agility through Increased Use of Federally 

Funded Research and Development Centers ���������������������������������������������������83

Management Consolidation of Federal

Graduate Research Fellowships ���������������������������������������������������������������������85

Rationalize the Federal Real Property Approach ����������������������������������������������87

Consolidate and Streamline Financial Literacy Efforts ������������������������������������ 90

Streamline Small Business Programs �������������������������������������������������������������93

Consolidation of Certain Protective Details ���������������������������������������������������� 96

Small Grants Consolidation �������������������������������������������������������������������������� 98

Transition to Electronic Government ������������������������������������������������������������ 100

Customer Experience (CX) Improvement Capability ���������������������������������������� 103

Next Generation Federal Student Aid Processing & Servicing Environment������� 106

Solving the Federal Cybersecurity Workforce Shortage������������������������������������ 108

The GEAR Center����������������������������������������������������������������������������������������� 112

Transfer of Background Investigations from the 

Office of Personnel Management to the Department of Defense����������������������� 115

Strengthening Federal Evaluation ����������������������������������������������������������������� 118

Appendix: Agency-Specific Reform Proposals .................................. 122

Bibliography ................................................................................. 128
I. THE MANDATE FOR REFORM
INTRODUCTION

When America’s Founders wrote the Constitution, they laid out a clear vision for the United States 

Government: to establish justice, ensure domestic tranquility, provide for the common defense, promote 

the general welfare, and secure the blessings of liberty. Moreover, they established Executive Branch 

organizations and structures to deliver on the Federal mission in ways appropriate to America’s needs at 

the time. Over successive generations, our Federal Government has evolved by expanding in scope and 

complexity to try to meet Americans’ needs. However, the organizational structures that underpin the 

Executive Branch have not always kept pace.

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 3
Two decades into the 21st Century, the public still believes 

that the Federal Government serves critical roles, and 

in some areas performs them well.1 However, public 

trust in the Federal Government has declined over the 

last decade,2 calling into question how well the current 

organizational constructs of Government are aligned to 

meet Americans’ needs in the digital age. Government 

in the 21st Century is fundamentally a services business, 

and modern information technology should be at the 

heart of the U.S. Government service delivery model. 

And yet, today’s Executive Branch is still aligned to the 

stove-piped organizational constructs of the 20th Century, which in many cases have grown inefficient and outof-date. Consequently, the public and our workforce are 

frustrated with Government’s ability to deliver its mission 

in an effective, efficient, and secure way. 

At times of great change, the need to reinforce this 

common commitment to “government of the people, 

by the people, and for the people”3 has been critical. 

So it is not surprising, as the United States faces the 

challenges of serving the broad and diverse needs of 

our growing country, that it becomes important to 

reexamine the organizational alignment of Executive 

Branch Government institutions to ensure that our 

organizational constructs are well aligned to meet the 

needs of the 21st Century.

1

 Pew Research Center, December 2017, “Public Trust in Government: 1958-2017.”

2

 Pew Research Center December 2017, “Government Gets Lower Ratings for Handing Health Care, Environment and Disaster Response.”

3

 President Abraham Lincoln, Gettysburg Address, November 19, 1863.

4

 President Donald Trump, March 13, 2017, speech.

To that end, Executive Order (EO) 13781, entitled “Comprehensive Plan for Reorganizing the Executive Branch,” 

highlights the need to evaluate the organizational constructs that support today’s mission delivery objectives. 

Building on a history of bipartisan Government reform 

initiatives, the EO focuses specifically on the role of organizational alignment in reducing “duplication and redundancy,” and improving “efficiency, effectiveness, and 

accountability of the executive branch.”4

This report outlines the Administration’s analysis and 

recommendations for structural realignment of the Executive Branch to better serve the mission, service, and 

stewardship needs of the American people. While some 

of the recommendations identified in this volume can be 

achieved via Executive administrative action, more significant changes will require legislative action as well.

By sharing key findings, the Administration offers this 

report as a cornerstone to build productive, bipartisan 

dialogue around realigning the Federal Government mission delivery model to make sense in the 21st Century. As 

such, while some of the proposals are ready for agency 

implementation, others establish a vision for the Executive Branch that will require further exploration and partnership with the Congress.

Finally, reorganization is one tool among many that 

this Administration is using to drive transformational 

change in Government. Meeting the needs of the 

American people, as well as the President’s mandate 

for greater efficiency, effectiveness, and accountability, 

requires a range of transformational approaches to support reorganization. To that end, the President’s Management Agenda (PMA) outlines a range of additional 

priorities and tools that, in combination, will create an 

Executive Branch that is prepared to meet the needs of 

the American people both now and in the future. The 

Administration welcomes constructive dialogue and 

consideration of all the tools, capabilities, and organizational principles that help support our mission and 

better serve the public.

Refocus Structures around 

Mission and Customers

Enhance Management 

Accountability

Prioritize Limited Resources and 

Eliminate Unnecessary Activities

Improve Communications 

and Coordination

BENEFITS OF REORGANIZATION

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 4 CENTURY
HISTORY OF REFORM AND 

REORGANIZATION EFFORTS

Nearly every new administration has sought to enhance 

and streamline the Government bureaucracy to better 

align with policy and efficiency priorities. From the creation of the Bureau of the Budget in 1921 under President 

Warren Harding, the Executive Branch has continued to 

evolve to address the ever-changing needs and mission 

of the Federal Government. Reform and reorganization 

efforts in the 20th Century reflected bipartisan efforts 

to enhance efficiency and effectiveness, while reducing 

waste. In fact, until the 1970s, Executive Branch reorganization was a reasonably common occurrence undertaken by most new administrations. More recently, 

notable efforts at organizational reform included the 

personnel reform agenda initiated under President 

Jimmy Carter and implemented under the Reagan 

Administration,5 as well as bipartisan efforts under Presidents Bill Clinton, George W. Bush, and Barack Obama 

to enhance shared services and increase public-private sector cooperation. Most successful reorganizations have also shared a common mission focus, usually 

responding to major mission failures or service delivery issues. The most notable recent examples of major 

bipartisan reform and reorganization efforts came in 

5 Donald Devine, “Reagan’s Terrible Swift Sword: An Insider’s 

Story of Abuse and Reform within the Federal Bureaucracy,” 

December 1, 1991.

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 5
response to mission challenges experienced after 9/11 in 

the fight against terrorism. Operational, communication, 

and organizational alignment challenges resulted in the 

creation of the Department of Homeland Security (DHS) 

and the Office of the Director of National Intelligence.

Today, agencies have interconnected imperatives around 

mission delivery, customer service, and stewardship of 

taxpayer dollars. Broader, system-level thinking around 

Government reorganization requires tackling interconnected barriers to change across these three areas. 

Cybersecurity and cyberwarfare, digital service delivery 

and enhanced IT modernization, effective use of data for 

accountability and transparency, and workforce challenges all require new organizational thinking to better 

integrate mission, service, and stewardship across the 

existing organizational silos of Government. Moreover, 

better organizational alignment should also enhance 

the Executive Branch’s ability to increase efficiency via 

shared services, public-private partnerships, workforce 

redeployments, and better customer experiences.

March 13, 2017

The President issues an 

Executive Order directing 

OMB to propose a 

comprehensive plan to 

reform and reorganize 

Executive Branch 

departments and 

agencies.

June 30, 2017

Agencies provide OMB 

high-level dras of 

initial reform ideas.

March - May 2018

OMB focuses on 

longer-term reform and 

reorganization opportunities outside the FY 2019 

President’s Budget and 

works with agencies.

July 2017

Summer 2018

OMB and agencies begin 

a dialogue with Congress 

to prioritize and refine 

proposals to best serve 

the American people.

OMB meets with Chief 

Financial Oicers (CFO) 

Act agencies and a 

limited number of other 

agencies to discuss 

dra plans.

February 12, 2018

FY 2019 President’s Budget 

is released and includes 

select reform and 

reorganization proposals

as a first step in presenting

the comprehensive plan 

to the American people.

June 2018

OMB releases a 

comprehensive plan 

to reform and reorganize 

Executive Branch departments 

and agencies.

September 11, 2017

Agencies submit reform 

proposals to OMB with 

FY 2019 budget requests.

September 12, 2017

 - February 2018

OMB analyzes reform and 

reorganization proposals 

and cross-cutting 

opportunities along with 

the FY 2019 President’s 

Budget.

April 12, 2017 

- June 12, 2017

OMB accepts public 

comments, which are 

shared with agencies.

TIMELINE FOR COMPREHENSIVE REFORM

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 6 CENTURY
“All agencies that regulate food safety 

should be under one department, preferably 

under the Dept. of Agriculture.” ― Kenneth

Washington State
II. ORGANIZATIONAL

REFORM PRINCIPLES 
The current process for assessing organizational change 

began in June 2017 when Executive Branch agencies 

submitted their initial reform ideas to the Office of 

Management and Budget (OMB) in response to an April 

12, 2017 OMB implementation memo. These submissions included valuable feedback provided by the public 

through an open comment process.6 Over the summer 

and fall of 2017, agencies worked with OMB to refine the 

ideas, identify opportunities across agencies, and assess 

opportunities to act on proposals in the near term. Agencies submitted refined reform proposals to OMB as a part 

of their Fiscal Year (FY) 2019 Budget requests. Many of 

the more straightforward, agency-specific organizational 

improvement opportunities were included in the FY 2019 

Budget released in February 20187 or were adopted by 

agencies under existing authorities.

“The disappointment surrounding recent 

presidents is not due mainly to defects 

in their leadership qualities but to their 

failure to address the structural paralysis of 

modern government. George Washington 

couldn’t run the government today.”8 

- Phillip K. Howard

The harder work of assessing cross-agency reform and 

alignment to the needs of the 21st Century began in earnest following the analysis of the President’s Management Agenda. This Agenda provided the broad context 

for what needs to change in Government, including a 

renewed focus on mission, service, and stewardship on 

behalf of the American people. Many of the inputs from 

the agency reform proposals and public comments on 

EO 13781 informed creation of the President’s Management Agenda, as well as input for the reorganization recommendations included in this volume.

Specific proposals were evaluated using a framework 

that balanced the Federal Government’s mission, service, 

and stewardship objectives, recognizing that the most 

powerful and transformative changes bolster all three of 

these core objectives.

6 Office of Management and Budget Memorandum M-17-22, 

“Comprehensive Plan for Reforming the Federal Government 

and Reducing the Federal Civilian Workforce,” April 12, 2017.

7 Efficient, Effective, Accountable: An American Budget - Fiscal Year 

2019, Office of Management and Budget, February 12, 2018.

8 Rosenbloom, David H., et al. “The Handbook of Federal Government Leadership and Administration: Transforming, Performing, 

and Innovating in a Complex World.” Routledge, 2017.

Mission: The first principle of organizational reform in 

the 21st Century is to start with the mission. Specific 

reforms must ensure that Government activities are 

rooted in the missions that the American people, through 

their elected officials, require. Within these mission 

areas—from national security to infrastructure to food 

and water safety—Government must have clear and 

aligned structures that allow Federal programs, staff, and 

agencies to deliver the outcomes the public expects.

Service: Understanding the customer or stakeholder 

needs in the 21st Century is critical to understanding 

how to realign the organizational model. In many cases, 

outmoded assumptions about customer and stakeholder 

needs have distracted from core mission, hindered 

outcomes, and fallen out of step with customer expectations. Federal customers—ranging from small businesses seeking loans, to families receiving disaster support, to veterans expecting proper benefits and medical 

care—deserve a customer experience that compares to 

or exceeds that of leading private-sector organizations, 

which most Federal services lag behind. The Executive 

Branch must develop capabilities to better facilitate endto-end customer experiences that cross agency boundaries, and create faster, more convenient, and more 

cost-effective interactions.

MISSION

SERVICE STEWARDSHIP

Target opportunities to enhance

mission, service, and stewardship

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 9
Stewardship: Effective stewardship of taxpayer funds is 

a crucial responsibility of the Federal Government, from 

preventing fraud to maximizing impact. Taxpayer dollars must go to effective programs that produce results 

efficiently. For example, Government too often recreates 

similar administrative functions across programs and 

agencies, failing to take advantage of opportunities for 

shared services, centers of excellence, or other arrangements that leverage the highest-performing organizations and free up resources to focus on mission. Using 

data-driven methods, Government must shrewdly consider how structural alignment can best support efficient 

and effective use of taxpayer dollars.

MODELS TO LEARN FROM: 

ORGANIZATIONAL DESIGN 

IN THE PRIVATE SECTOR

Reorganization is a key tool that private-sector companies regularly employ to maintain relevance, efficiency, 

and effectiveness over time. While organizational change 

is hard and takes time, the experiences of companies in 

the private sector over the last few decades have shown 

that large-scale transformation is possible and can both 

improve customer service and lower costs. Studies by 

McKinsey9 and BCG10 have identified clear organizational 

design success factors before and during implementation. For example, both studies agreed that the first, 

foundational step in organizational redesign success is 

to focus on long-term strategy rather than addressing 

immediate pain points or short-term needs. 

For the Federal Government, this means starting with 

a focus on mission outcomes and service delivery. 

9 Aronowitz, Steveran; Aaron De Smet; and Deirdre McGinty. “Getting 

Organizational Redesign Right.” McKinsey Quarterly. June 2015.

10 Tollman, Peter et al. “A New Approach to Organization Design: 

Smart Design for Performance.” April 5, 2016. Available on-line 

at https://www.bcg.com/publications/2016/people-organization-new-approach-organization-design.aspx.

Mission Organizational

Construct

Business and

Operating Models

for the 21st Century

● “Government of the people, 

by the people, for the people”

● Mission, service, stewardship 

objectives

● Customer-centric alignment

● Multi-channel service delivery

● Leveraging technology

and data

● Integrated business processes

● New capabilities and data

If you are one of the nearly 59 million Americans working for a small 

business, you know the importance of excellent customer service. And 

while the Federal Government strives to support small business growth 

and competitiveness, duplicative and inconsistent programs spread across 

different Federal agencies have sometimes created confusion and extra 

work for the small businesses they mean to serve. 

As one way to make things easier on small businesses, the Administration 

proposes to create a “one-stop shop” for all small business Federal 

contracting certifications at the Small Business Administration. This 

proposal will synchronize the processes for both small businesses and the 

Federal agencies that want to contract with them. As a result, America’s 

entrepreneurs will have less headache and be able to invest more of their 

time and hard-earned profits into operating and growing the businesses 

that keep our economy strong.

We must change the way Government 

operates and move our capabilities 

into the 21st Century.

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 10 CENTURY
Organizational decisions should be made and executed 

to create the most value for taxpayers and the customers 

of Federal services, not based on outdated legal structures or historical precedent. 

Operating models must also be reviewed in light of the 

improvements possible in the digital age and lessons 

learned from peer organizations. Analysis that simply 

looks at the formal reporting structure on an organizational chart misses other critical organizational structures, including customer engagements, data flows, 

organizational processes, and the informal networks and 

cultural elements which make an organization run. The 

analysis must envision a new operating model that leverages the best thinking available. 

Finally, the analysis must translate the operating model 

into an organizational construct that better aligns 

resources with mission, delivers improved services, and 

operates more efficiently. New organizational constructs 

must be supported by change management processes, 

including identifying and managing risks; communicating across leadership, managers, and front-line staff; and 

shifting incentives, expectations, and culture to sustain 

the change.

Recognizing the challenges of driving organizational 

change, the Administration has been deliberate in developing proposals to consider how implementation will be 

managed. Key factors during implementation include 

defining clear roles and responsibilities, managing the 

change process, ensuring alignment across leadership 

and line staff, and managing risk factors. 

REORGANIZATION ALIGNMENT 

FRAMEWORK

Based on these approaches, a Reorganization Alignment Framework was developed to assess the needs and 

opportunities to best align reorganization efforts to the 

needs of mission.

Development of this Reorganization Alignment Framework drew on a range of inputs from leading organizational change and strategic transformation thought 

leaders in the private sector, public sector, and academic 

worlds. For a list of literature that informed creation of 

the Reorganization Alignment Framework, please see the 

bibliography section.

STEWARDSHIP EFFECTIVENESS

MISSION/SERVICE EFFECTIVENESS

Low High

Low High

Transformation

Urgency

Mission 

Alignment 

Imperative

Management 

Improvement 

Opportunity

Organization 

in Alignment

If a veteran who has served our country isn’t satisfied with decisions by the Department of 

Veterans Affairs (VA) about disability or other hard-earned benefits, he or she has the right 

to appeal. But until recently, veterans were forced to use the same appeals process adopted 

after World War I—nearly 100 years ago. This outdated process left veterans at the mercy 

of a confusing and complex system and slowed down appeals by forcing each veteran to 

navigate multiple layers of process. At the end of July 2017, approximately 470,000 appeals 

were pending under the legacy system and, on average, veterans were waiting approximately 

three years for a decision—and as much as six years for higher-level appeals.

As VA refocuses on enhancing veterans’ experience, it is accelerating a new appeals system 

that gives veterans options about the best way to pursue their appeal based on their unique 

situation. The new system is designed to significantly improve the timeliness of decisions 

by streamlining organizational processes and bureaucratic layers. Veterans with old, 

pending appeals can resubmit using the new system designed to significantly improve 

the timeliness of decisions. Now, VA is empowering veterans with greater choice and 

timelier service in resolving their appeals.

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 11
As outlined in the Reorganization Alignment Framework 

above, organizational change priorities fall into four 

categories:

• Mission Alignment Imperatives. Analysis highlighted areas where Federal services are operating 

relatively efficiently, but outdated or misaligned 

organizational constructs hinder the ability to 

achieve mission objectives and effectively serve 

citizens. In addition, this Administration identified 

several opportunities to “right size” the mission to 

the current environment. As such, reorganization 

proposals around mission alignment fall into two 

sub-categories:

A. Organizational realignments to enhance 

mission and service delivery.

B. Changes to refocus, reduce, or expand

the mission.

• Management Improvement Opportunities/

Proposals to Enhance Efficiency. Many Federal 

organizations are effectively fulfilling their missions 

and serving citizens but doing so in ways that duplicate other Federal activities or rely on outdated 

organizational structures that are wasteful and 

inefficient. These present cross-agency opportunities to better steward taxpayer resources to 

achieve the same core missions with better results. 

• Transformation Urgency: New Capability 

Requirements. In several areas, the Federal Government lacks critical capabilities for successful 

mission delivery in a 21st Century characterized by 

digital service delivery, data-driven mission support, and increased need for collaboration across 

the public (Federal, State, and local) and private 

sectors. In many such areas, Government is failing 

to fulfill both citizen expectations and stewardship 

responsibilities.

• Organizations in Alignment. In other areas, organizational capabilities are generally aligned with 

the customer and stakeholder needs of the 21st 

Century and balance mission, service, and stewardship needs. For these organizations, modest 

organizational updates, capability realignment, 

and additional investments may be needed. Since 

these changes represent “business-as-usual” 

process improvement opportunities, this volume 

will not highlight these proposals in depth. For 

additional detail on these proposals, see page 122

(Appendix: Agency-Specific Reform Proposals).

Looking at the menu of your favorite pizza shop, 

you probably wouldn’t guess that different pies need 

to be regulated by different Federal agencies. But 

while a cheese pizza has to meet the Department 

of Health and Human Services’ Food and Drug 

Administration (FDA) standards, a pepperoni pizza 

falls under the Food Safety and Inspection Service 

(FSIS) at the U.S. Department of Agriculture (USDA). 

Last time you made an omelet, the FDA regulated 

any eggs you cracked yourself, but the FSIS was 

responsible if you poured from a carton of liquid 

eggs. And chickens? The FDA regulates their feed 

while the FSIS inspects them at slaughter.

This division of responsibility started in response 

to unsafe and unsanitary meat packing conditions 

in the early 1900s, but today it introduces greater 

risk, inefficiency, and inconsistency into the 

important work of ensuring food safety, which 

affects everyone in America. 

To provide better food safety for the country 

and improve efficiency for stakeholders, the 

Administration proposes to consolidate core

Federal food safety responsibilities into a single 

agency under USDA, where food safety is a top 

priority from farm to fork. This consolidation 

will give USDA the clear mandate, dedicated 

budget, and full responsibility it needs for optimal 

oversight of the entire U.S. food supply. Resources 

at the FDA will be freed up to focus on its core 

responsibilities of drugs, devices, biologics, 

and tobacco. Most importantly, this proposal 

will provide better food safety outcomes for the 

American people over the long term.

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 12 CENTURY
AVOIDING “ONE-SIZE-FITS ALL” 

APPROACHES

Rather than adhere to a simplistic set of decision rules 

to identify priorities among these categories, individual proposals have been assessed for factors including 

impact on mission, service, and stewardship in order to 

account for programs’ and agencies’ unique roles and 

requirements and inform appropriate strategies. For 

example, while strategies such as reducing duplication 

and increasing centralization may make sense in many 

instances, these strategies may have unintended consequences. Sometimes, centralizing to improve coordination and lower costs through economies of scale 

best promotes mission, service, and stewardship. Yet in 

other cases, decentralizing to increase customer alignment and improve flexibility to adjust to “on-the-ground” 

realities may be preferable. Similarly, reducing program 

duplication has been demonstrated to lower costs and 

reduce confusion among both customers and employees. 

But some duplication across programs may also create 

valuable redundancy for mission-critical activities and 

increase program flexibility to react to changing factors. 

KEY DRIVERS OF REFORM

Reorganizations in the private 

sector have demonstrated 

that without efficient and 

effective implementation, 

even well-conceived reorganizations may fail to achieve the 

intended benefits. To ensure 

effective implementation, 

the President’s Management 

Agenda11 highlighted three 

areas (see figure to the right) 

which help drive effective 

organization transformation:

11 The President’s Management Agenda: Modernizing Government 

for the 21st Century, Executive Office of the President and the 

President’s Management Council, March 2018.

• Information Technology Modernization.

• Data, Accountability, and Transparency.

• People and the Workforce of the Future.

People — Workforce 

of the Future

Data, 

Accountability and 

Transparency

IT Modernization

MISSION

SERVICE

STEWARDSHIP

When transforming organizations to serve the 

needs of the 21st Century, it 

will be critical to leverage 

each of these key drivers. 

Ongoing work on this front 

is highlighted as part of the 

President’s Management 

Agenda, and you can see 

more detail on specific priorities at performance.gov/

pma. In addition, these key drivers will inform next steps 

for each of the reform proposals discussed in this volume. 

PRESIDENT 'S 

MANAGEMENT

 A G E N D A

Does your State have a dam that helps to generate 

electricity, supply drinking water, or support 

agriculture? When dam operations are being 

reviewed under Federal laws and regulations, two 

different agencies—the Department of the Interior’s 

(DOI) Fish and Wildlife Service and the Department 

of Commerce’s National Marine Fisheries Service—

are tasked with considering implications under 

the Endangered Species Act. In carrying out their 

responsibilities, for example, one agency may 

worry about releasing enough water from the dam 

to benefit the species under its jurisdiction, while 

the other might worry about storing enough water 

for the species it manages. In some cases, conflict, 

confusion, and delays may result.

Permitting projects like dam operations are just 

one example of where the Services have related and 

sometimes overlapping roles. To help the Federal 

Government develop more consistent Federal 

fisheries and wildlife policy, as well as more 

efficiently serve stakeholders in the permitting 

process, the Administration is proposing to merge 

these two Services under DOI. In addition to 

better serving the public, this consolidation will 

increase certainty for permittees and help support 

infrastructure development. 

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 13
III. OVERVIEW OF ORGANIZATIONAL 

ALIGNMENT PRIORITIES
Utilizing the frameworks described above, the Administration’s comprehensive plan for reforming and reorganizing the Executive Branch includes proposals that 

extend across agencies, with the goal of increasing focus 

on integrated mission, service, and stewardship delivery.

Our Nation is used to leading the world in technology 

innovation and service delivery and at one time, the 

U.S. Government catalyzed that innovation. As such, 

the Administration is investing in deep-seated transformation that begins with the President’s Management 

Agenda and extends through the recommendations for 

Executive Branch organizational reform. This section 

provides an overview of the initial organizational reform 

priorities that are organized based on the Reorganization 

Alignment Framework presented above. 

MISSION ALIGNMENT IMPERATIVES

A. Organizational Realignments to Enhance Mission and 

Service Delivery

1. Merge the Departments of Education and Labor 

into a single Cabinet agency, the Department of 

Education and the Workforce, charged with meeting the needs of American students and workers 

from education and skill development to workplace 

protection to retirement security. As part of the 

merger, the Administration also proposes significant 

Government-wide workforce development program 

consolidations, streamlining separate programs in 

order to increase efficiencies and better serve American workers. 

2. Move the non-commodity nutrition assistance 

programs currently in the U.S. Department of 

Agriculture’s (USDA) Food and Nutrition Service into the Department of Health and Human 

Services—which will be renamed the Department of Health and Public Welfare. 

Also, establish a Council on Public Assistance, comprised of all agencies that administer public benefits, with statutory authority to set cross-program 

policies including uniform work requirements. 

3. Move the Army Corps of Engineers (Corps) Civil 

Works out of the Department of Defense (DOD) 

to the Department of Transportation (DOT) and 

Department of the Interior (DOI) to consolidate 

and align the Corps’ civil works missions with these 

agencies.

4. Reorganize the USDA’s Food Safety and Inspection Service and the food safety functions of 

HHS’s Food and Drug Administration (FDA) into a 

single agency within USDA that would cover virtually all the foods Americans eat.

5. Move USDA’s rural housing loan guarantee and 

rental assistance programs to the Department of 

Housing and Urban Development (HUD), allowing 

both agencies to focus on their core missions and, 

over time, further align the Federal Government’s 

role in housing policy. 

6. Merge the Department of Commerce’s (Commerce) National Marine Fisheries Service with 

DOI’s Fish and Wildlife Service. This merger would 

consolidate the administration of the Endangered 

Species Act and Marine Mammal Protection Act in 

one agency and combine the Services’ science and 

management capacity, resulting in more consistent 

Federal fisheries and wildlife policy and improved 

service to stakeholders and the public, particularly 

on infrastructure permitting.

7. Consolidate portions of DOI’s Central Hazardous 

Materials Program and USDA’s Hazardous Materials Management program into the Environmental 

Protection Agency’s (EPA) Superfund program. 

This consolidation would allow EPA to address 

environmental cleanup under the Comprehensive 

Environmental Response Compensation & Liability 

Act (CERCLA) on Federal land regardless of which 

of these agencies manages the land, while DOI and 

USDA would maintain their existing environmental 

compliance, bonding, and reclamation programs for 

non-CERCLA sites.

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 15
8. Optimize Department of State (State) and U.S. 

Agency for International Development (USAID) 

humanitarian assistance to eliminate duplication 

of efforts and fragmentation of decision-making. 

A specific reorganization proposal will be submitted 

by State and USAID to OMB as part of their FY 2020 

Budget request to improve the efficiency and effectiveness of the Federal Government’s humanitarian 

assistance across State and USAID, establish unity 

of voice and policy, and optimize outreach to other 

donors to increase burden-sharing and drive reform 

at the UN and in multilateral humanitarian policy.

9. Consolidate the U.S. Government’s development finance tools, such as the Overseas Private 

Investment Corporation (OPIC) and the Development Credit Authority (DCA) of USAID, into a new 

Development Finance Institution in a reformed 

and modernized way to leverage more privatesector investment, provide strong alternatives to 

state-directed initiatives, create more innovative 

vehicles to open and expand markets for U.S. firms, 

and enhance protections for U.S. taxpayers.

10. Transform USAID through an extensive, agency-driven structural reorganization of headquarters Bureaus and Independent Offices as a foundational component of USAID’s overall plans to better advance partner countries’ self-reliance, support 

U.S. national security, and ensure the effectiveness 

and efficiency of foreign assistance.

11. Move the policy function of the Office of Personnel 

Management (OPM) into the Executive Office of the 

President, and elevate its core strategic mission 

while devolving certain operational activities – 

the delivery of various fee-for-service human 

resources, IT services, and background investigations – to other Federal entities better aligned to provide non-strategic transaction processing services 

that meet 21st Century needs. This new structure 

would better accommodate an overhaul of the Federal civil service statutory and regulatory framework.

12. Transfer responsibility for perpetual care and 

operation of select military and veteran cemeteries located on DOD installations to the Department of Veterans Affairs’ National Cemetery 

Administration. This transfer assures these cemeteries will be maintained to national shrine standards to continue the recognition of service of those 

interred therein, gains efficiencies, and limits mission overlap based on a common-sense approach to 

good government.

13. Reorganize the U.S. Census Bureau, the Bureau 

of Economic Analysis, and the Bureau of Labor 

Statistics under Commerce to increase cost-effectiveness and improve data quality while simultaneously reducing respondent burden on businesses 

and the public. Together, these three agencies 

account for 53 percent of the U.S. Statistical System’s annual budget of $2.26 billion and share 

unique synergies in their collection of economic 

and demographic data and analysis of key national 

indicators. 

14. Consolidate the Department of Energy’s (DOE) 

applied energy programs into a new Office of 

Energy Innovation in order to maximize the benefits of energy research and development and to 

enable quicker adaptation to the Nation’s changing 

energy technology needs.

If you have children, you know that preparing for success in work and life begins early 

and—particularly in a changing and growing economy—continues throughout life. You 

want your kids to have a strong start in school as preparation for professional success, 

no matter what dream they pursue. And as adults, you want them to have easy access to 

training and information connecting them to the jobs they want and need, especially as 

the economy changes. The Federal Government should be making it easy for individuals 

to access high-quality education, training, and employment resources as they transition 

from one stage to the next. 

That’s why the Administration is proposing to consolidate the Departments of Education 

and Labor into a single Cabinet agency, eliminating duplication across the two agencies 

and maximizing the effectiveness of skill-building efforts. The new agency will be 

charged with meeting the end-to-end needs of American workers and students, from 

education and skill development to workplace protection to retirement security, to ensure 

access to the full range of coordinated resources Americans need to succeed in the 21st

Century economy. 

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 16 CENTURY
B. Changes to Refocus, Reduce, or Expand the Mission

15. Devolution of Activities from the Federal 

Government

a) Sell the transmission assets owned and 

operated by the Tennessee Valley Authority 

and the Power Marketing Administrations 

within DOE, including those of Southwestern 

Power Administration, Western Area Power 

Administration, and Bonneville Power Administration, to encourage a more efficient allocation 

of economic resources and mitigate unnecessary risk to taxpayers. 

b) Restructure the U.S. Postal System to return 

it to a sustainable business model or prepare 

it for future conversion from a Government 

agency into a privately-held corporation. 

The President’s Task Force on the United States 

Postal System will make recommendations on 

reforms towards this goal in August 2018.

c) Reorganize DOT to better align the agency’s 

core missions and programmatic responsibilities, reduce transportation program 

fragmentation across the Government, and 

improve outcomes. Changes would include 

spinning off Federal responsibility for operating 

air traffic control services, integrating into DOT 

certain coastal and inland waterways commercial navigation activities and transportation security programs, and reassessing the structure and 

responsibilities of DOT’s Office of the Secretary. 

16. Transform the way the Federal Government 

delivers support for the U.S. housing finance 

system to ensure more transparency and accountability to taxpayers, and to minimize the risk of taxpayer-funded bailouts, while maintaining responsible and sustainable support for homeowners. 

Proposed changes, which would require broader 

policy and legislative reforms beyond restructuring 

Federal agencies and programs, include ending the 

conservatorship of Fannie Mae and Freddie Mac, 

reducing their role in the housing market, and providing an explicit, limited Federal backstop that is 

on-budget and apart from the Federal support for 

low- and moderate-income homebuyers.

17. Rethink how the Federal Government can drive 

economic growth in concert with private-sector 

investments in communities across the Nation by 

coordinating and consolidating Federal economic 

assistance resources into a Bureau of Economic 

Growth at Commerce, producing a higher return on 

taxpayer investment on projects that are transparent and accountable.

18. Transform the U.S. Public Health Service Commissioned Corps into a leaner and more efficient 

organization that is better prepared to respond 

to public health emergencies and provide vital 

health services, including by reducing the size 

of the Corps and building up a Reserve Corps for 

response in public health emergencies.

MANAGEMENT IMPROVEMENT 

AND EFFICIENCY OPPORTUNITIES

19. Establish an accelerated process for determining 

whether one or more of the National Aeronautics and Space Administration’s (NASA) Centers should be converted to, or host, a Federally Funded Research and Development Center 

(FFRDC). FFRDCs can potentially allow the agency 

to be more agile in rapidly responding to changing 

needs and in recruiting and retaining scientific and 

technical expertise.

20. Consolidate the administration of graduate fellowships for multiple Federal agencies under the 

National Science Foundation in order to reduce the 

total cost of administering those fellowships. 

21. Optimize the Federal real property footprint by 

making smart investments in renovations and new 

facilities, driving down lease costs, and disposing of 

unneeded real estate through a streamlined process 

that results in the greatest return to the taxpayer.

22. Consolidate and streamline financial education 

and literacy programs currently operating across 

more than 20 Federal agencies to ensure effective 

allocation of Federal financial literacy resources and 

avoid unneeded overlap and duplication.

23. Strengthen the Small Business Administration (SBA) as the voice of small business within 

the Government by consolidating small business 

focused guaranteed lending and Federal contracting 

certification programs at SBA. 

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 17
24. Consolidate protective details at certain civilian Executive Branch agencies under the U.S. 

Marshals Service in order to more effectively 

and efficiently monitor and respond to potential 

threats. Threat assessments would be conducted 

with support from the U.S. Secret Service.

25. Consolidate the small grants functions, expertise, 

and grantmaking from the Inter-American Foundation and U.S. African Development Foundation 

into USAID beginning in FY 2019. The consolidation 

would be a significant step to reduce the proliferation of Federal international affairs agencies that are 

operating today, while also elevating community-led, 

“local works” small grants as a development and 

diplomacy tool for the U.S. Government.

26. Transition Federal agencies’ business processes 

and recordkeeping to a fully electronic environment, and end the National Archives and Records 

Administration’s acceptance of paper records by 

December 31, 2022. This would improve agencies’ 

efficiency, effectiveness, and responsiveness to citizens by converting paper-based processes to electronic workflows, expanding online services, and 

enhancing management of Government records, 

data, and information. 

TRANSFORMATION URGENCY – 

NEW CAPABILITY REQUIREMENTS

27. Transform the way Americans interact with the 

Federal Government by establishing a Government-wide customer experience improvement 

capability to partner with Federal agencies to help 

them provide a modern, streamlined, and customer-centric experience for citizens, businesses, and 

other customers, comparable to leading privatesector organizations.

28. Pursue a Next Generation (Next Gen) Financial 

Services Environment as a new approach to Federal Student Aid (FSA) processing and servicing 

with a modernized, innovative, and integrated 

architecture. Next Gen will save taxpayers millions 

of dollars and will create an improved, world-class 

customer experience for FSA’s more than 42 million 

customers, while creating a more agile and streamlined operating model. 

29. Solve the Federal cybersecurity workforce 

shortage by establishing a unified cyber workforce 

capability across the civilian enterprise, working 

through DHS and OMB in coordination with all 

Federal departments and agencies. The Administration will work towards a standardized approach 

to Federal cybersecurity personnel, ensuring Government-wide visibility into talent gaps, as well as 

unified solutions to fill those gaps in a timely and 

prioritized manner. 

30. Establish a Government Effectiveness Advanced 

Research (GEAR) Center as a public-private partnership to help the Government respond to innovative technologies, business practices, and research 

findings that present opportunities to improve mission delivery, services to citizens, and stewardship 

of public resources. 

31. Transfer the National Background Investigations 

Bureau from OPM to DOD, providing the opportunity to achieve an efficient, effective, fiscally viable, and secure operation that meets all agencies’ 

needs.

32. Expand upon existing agency evaluation capabilities and push agencies to adopt stronger practices 

that would generate more evidence about what 

works and what needs improvement in order to 

inform mission-critical decisions and policies. 

These changes will help to address the large gaps and 

inconsistencies across Government in Federal agencies’ ability to formally evaluate their programs.

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 18 CENTURY
“Education and labor are intimately 

interwoven. As the Father of Vocational 

Education, Frank Parsons put it,

all education is in the last analysis, 

vocational education because it is 

supposed to prepare students for 

their lives and future careers. These 

departments would benefit greatly 

from being conjoined.” ― Anthony

Alaska

“Permitting takes way 

too long and costs way 

too many tax dollars!”

― Joe

Florida 
IV. LOOKING AHEAD
The business of the Federal Government is to serve the American people, but outdated organizational frameworks hinder 

our ability to deliver on our mission, service, and stewardship objectives in the digital age. Data breaches, delays in 

background investigation and security clearance approvals, 

and outdated paper-based processes all erode trust in the 

Government. Moreover, when the American people compare 

Government service delivery models with the streamlined, 

multi-channel experiences they have when interacting with 

private-sector businesses, it is clear how outmoded many 

Government organizational models are. Americans routinely 

shop online, use smart phones to order rides, and get electronic money transfer services and yet are forced to deal 

with multiple agencies and excessive bureaucracy when they 

interact with Federal agencies. Lengthy permitting for infrastructure projects, confusing and overlapping job retraining 

programs, and byzantine requirements for applying for small 

business and farm loans all are calcified and entrenched in 

outdated organizational constructs designed decades ago.

“Not since the Industrial Revolution have the 

stakes of dealing with change been so high. 

Most traditional organizations have accepted 

in theory at least, that they must either change 

or die.”12

- from “Cracking the Code of Change”

It is also important to ensure that the Federal Government 

appropriately aligns its mission and service activities to areas 

where a Federal role is critical and where State and local governments cannot optimally provide effective services. It is no 

longer appropriate to avoid having foundational discussions 

about services that might be better served by direct State, 

local, or even private-sector stewardship. To the extent that 

existing organizational constructs are too complex or outmoded, organizational realignment or reform may be needed 

to ensure that mission, service, and stewardship objectives 

can be met. 

Recent decades have demonstrated that the Federal Government will continue to change. The question is whether 

short-sighted, piecemeal change will continue to sell taxpayers short and ignore fundamental shortcomings or whether 

transformation will elevate Government to the level of 

efficiency, effectiveness, and accountability that the public 

deserves. With the support of the Congress, the priorities 

above and the reorganization proposals that follow will make 

important strides in re-crafting an Executive Branch that is 

structured to best facilitate delivery of mission, service, and 

stewardship for the American people. 

12 Nohria, Nitin and Michael Beer. “Cracking the Code of Change.” 

Harvard Business Review, May-June 2000. Available on-line at hbr.

org/2000/05/cracking-the-code-of-change.

Did you know that the Department of Transportation 

(DOT) is the primary Federal agency responsible for 

all modes of transportation, except for maritime 

issues? Unlike aviation, highways, transit, pipelines, 

and railroads, DOT plays a limited role in the 

maritime sector, as the U.S. Department of Defense, 

through the U.S. Army Corps of Engineers (Corps), 

has responsibility for supporting investment in 

maritime commercial navigation. 

Our commercial ports and inland navigation 

channels have played a large role in how this 

Nation developed and where people live. Today, 

commercial navigation infrastructure—from 

deepening and widening navigation channels for 

commercial ships to terminals where ships dock 

and cranes that load and unload them—continues 

to make important contributions to many of 

America’s local and regional economies and is 

supported by investments from Federal, State, and 

local governments, port authorities, and the private 

sector. Yet, unlike other transportation sectors 

currently centralized under DOT, responsibilities 

for supporting the maritime industry’s ability to 

support the nation’s economy are split between the 

Corps, which supports navigation improvements 

and waterside port investments, and DOT, which 

supports landside port investments. 

To fix this misalignment, the Administration 

proposes to consolidate the Corps’ commercial 

navigation mission into DOT. By consolidating 

these functions, the Administration would 

place a single Federal agency in charge of 

supporting maritime transportation investments. 

This consolidation will enable DOT to better 

align investments across maritime and other 

transportation sectors to ultimately create a 

more efficient transportation system. Similarly, 

the Administration proposes to move the Corps’ 

responsibilities for supporting investments in 

other water resources infrastructure such as flood 

control and aquatic ecosystem restoration to the 

Department of the Interior, which has responsibility 

for land and water resources management. 

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 21
V. GOVERNMENT-WIDE 

REORGANIZATION PROPOSALS
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 23

Department of Education and the Workforce

Departments of Education and Labor

Summary of Proposal: This proposal would merge the Departments of Education (ED) and Labor 

(DOL) into a single Cabinet agency, the Department of Education and the Workforce (DEW). The new 

agency would be charged with meeting the needs of American students and workers, from education 

and skill development to workplace protection to retirement security. Merging ED and DOL would 

allow the Federal Government to address the educational and skill needs of American students 

and workers in a coordinated way, eliminating duplication of effort between the two agencies and 

maximizing the effectiveness of skill-building efforts.

THE CHALLENGE

ED and DOL share a common goal of preparing Americans for success in a globally competitive world 

through family-sustaining careers. However, the two Departments operate in silos, inhibiting the Federal 

Government’s ability to address the skill needs of the American people in a coordinated manner. The result 

has been the creation of a complicated web of funding streams for States and localities to administer, 

and a confusing set of signals sent to American students and workers regarding how best to develop the 

skills needed to succeed in the 21st Century economy. The Federal Government currently operates more 

than 40 workforce development programs spread across 15 agencies. This fragmentation perpetuates 

unnecessary bureaucracy and complicates State and local efforts to weave together disparate funding 

streams to meet the comprehensive needs of their citizens.

The Administration proposes to merge ED and DOL into a single Cabinet agency, the Department of 

Education and the Workforce (DEW). As part of the merger, the Administration also proposes significant 

Government-wide workforce development program consolidation, streamlining separate programs in 

order to increase efficiencies and better serve American workers. 

THE OPPORTUNITY

The new merged department would reduce unnecessary bureaucracy, streamline access and better 

integrate education and workforce programs, and allow the Administration to more effectively address 

the full range of issues affecting American students and workers. The workforce development program 

consolidation would centralize and better coordinate Federal efforts to train the American workforce, 

reduce administrative costs, and make it easier for States and localities to run programs to meet the 

comprehensive needs of their workforce.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The proposal would merge all of the existing DOL and ED programs into a single department, DEW, with 

four main sub-agencies focused on: K-12, Higher Education/Workforce Development, Enforcement, and 

Research/Evaluation/Administration. This would help create alignment throughout the education-to-career 

pipeline, while also creating coherence within the workforce development and higher education worlds.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 24 CENTURY

K-12

1 Government Accountability Office, Multiple Employment and Training Programs: Providing Information on Colocating 

Services and Consolidating Administrative Structures Could Promote Efficiencies, GAO-11-92, (January 2011).

The K-12 agency would support State and local educational agencies to improve the achievement of 

preschool, elementary, and secondary school students, including students with disabilities, Native American 

students, and English language learners. The agency would comprise improved ED K-12 offices that 

would better integrate across K-12 programs and more effectively coordinate with higher education and 

workforce programs. The K-12 agency would administer activities currently implemented by ED’s Offices 

of Elementary and Secondary Education, Innovation and Improvement, English Language Acquisition, 

and Special Education Programs. As described below, the Rehabilitation Services Administration would 

be moved to the Higher Education/Workforce Development agency.

American Workforce and Higher Education Administration

The new American Workforce and Higher Education Administration (AWHEA) would be charged with 

ensuring that American workers possess the skills necessary to succeed in the workforce. The agency 

would bring together current DOL workforce development programs and ED vocational education, 

rehabilitation, and higher education programs. As part of the reorganization, the Administration also 

proposes to consolidate overlapping workforce development funding streams. Observers of Federal 

workforce development efforts have long noted the large number of programs across multiple agencies and 

duplicative administrative structures inherent in the system. Since 2011, the Government Accountability 

Office has identified workforce development as an area of duplication, fragmentation, and overlap 

and has suggested that colocating services and consolidating administrative structures may heighten 

efficiency.1

 Despite modifications made as part of the 2014 reauthorization of the Workforce Innovation 

and Opportunity Act (WIOA), the system remains fragmented at the Federal level. To address these 

issues, the new agency would place higher education and workforce development programs under the 

same umbrella. By doing so, Federal skill-building policy would be better coordinated to meet the full 

range of needs of American students and workers, and in particular would support improved synergy 

between higher education and workforce development programs. This proposal would simplify and 

streamline Federal workforce development programs, moving from the current arrangement of more 

than 40 programs at 15 agencies to 16 workforce development programs at seven agencies.

The AWHEA would be structured to include components focused on: Higher Education; Disability 

Employment; Adult Workforce Development; Youth Workforce Development; and Veterans Employment, 

each headed by a presidentially-appointed official. 

• The Higher Education component would better align programs that promote and expand access

to postsecondary education with workforce development programs to meet the diverse needs of

students and workers. This includes strengthening the capacity of colleges and universities to promote 

reform, innovation, and improvement in postsecondary education, while expanding access to and

driving improvement in high-quality, short-term programs that provide students with a credential,

certification, or license in a high-demand field. The Higher Education component would also

complement Federal Student Aid’s customer-service focus and move to the Next Generation

(Next Gen) Financial Services Environment, also proposed in this Volume. Next Gen would enhance

operational components of Federal student aid programs, make it easier than ever to apply for
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 25

financial aid from a mobile platform, and streamline the way that schools interact with student loan 

servicing and the repayment system. 

• The Disability Employment component would consolidate ED’s Vocational Rehabilitation State

Grants and DOL’s Office of Disability of Employment Policy into one office within the AWHEA, allowing 

for better coordination of services, policy direction, technical assistance, and reporting within the

workforce development system. This office would ensure the provision of high-quality services to

individuals with disabilities, maintain strong coordination with researchers on best practices to

promote employment, and centralize DOL and ED’s support to States.

• The Adult Workforce Development component would consolidate four major formula streams that

currently serve adult populations in a duplicative manner: the WIOA Adult, WIOA Dislocated Worker, 

Employment Service, and Jobs for Veterans State Grants. This component would also consolidate

three Native American-serving workforce development programs currently spread across three

agencies, replacing them with a set-aside for Native American adults.

• The Youth Workforce Development component would address both in-school and out-of-school

youth and create stronger pathways to postsecondary paths and employment for both.

• The Veterans’ Employment Office would ensure that veterans continue to receive priority of service

in the workforce system; advise on veterans’ employment issues; and support the Departments of

Defense and Veterans Affairs in administering the Transition Assistance Program.

The AWHEA would also maintain a Federally-administered Apprenticeship and Impact Fund, which would 

consolidate a range of disparate grant programs into a single fund that is focused on testing and replicating 

effective apprenticeship, workforce development, and postsecondary education models.

In addition to greater policy coordination, this proposal could improve the use of data for learning, 

performance management, and evaluation in order to study how education and workforce development 

programs lead to successful labor market outcomes. For example, education programs could benefit 

from high-quality information about participants’ labor market outcomes, which are more commonly 

tracked in workforce development programs. 

Enforcement

The Enforcement agency would include worker protection agencies from DOL that are responsible for 

enforcing statutes relating to workers’ pay, safety, benefits, and other protections, as well as Federal 

workers’ compensation programs. The Agency would also include ED’s Office of Civil Rights, which is 

responsible for ensuring equal access to education through enforcement of civil rights in the nation’s K-12 

school and higher education institutions. The DOL agencies represent more than half of DOL’s workforce 

as measured in full-time equivalents (FTEs), mostly comprised of field enforcement staff. In the new DEW, 

all of these agencies would report to one senior official to enhance the efficiency and coordination of 

enforcement and compliance assistance efforts.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 26 CENTURY

Research, Evaluation, and Administration

The Research, Evaluation, and Administration agency would include centralized offices focused on 

policy development, research, and evaluation, in addition to management-focused offices related to 

IT, procurement, financial management, and budgeting. Consolidating these functions would result in 

efficiency gains. As discussed elsewhere, the Bureau of Labor Statistics would be moved to the Department 

of Commerce as part of a proposal to bring the primary economic statistical agencies under one umbrella.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 27

Consolidate Non-Commodity Nutrition Assistance 

Programs into HHS, Rename HHS the 

Department of Health and Public Welfare, and

 Establish the Council on Public Assistance

Departments of Agriculture and Health and Human Services

Summary of Proposal: This proposal moves the non-commodity nutrition assistance programs 

currently in the U.S. Department of Agriculture’s (USDA) Food and Nutrition Service (FNS) into the 

Department of Health and Human Services’ (HHS) Administration for Children and Families (ACF), and 

renames HHS the Department of Health and Public Welfare (DHPW). The proposal also establishes 

a Council on Public Assistance, comprised of all Federal agencies that administer public benefits, 

with statutory authority to set cross-program policies including uniform work requirements.

THE CHALLENGE 

USDA and HHS are currently responsible for administering the Federal Government’s major public assistance 

programs, not including housing programs. However, State and local governments, the entities delivering 

these services to participants, often administer many of these programs under a single Agency. For example, 

when a person goes to apply for services through the Temporary Assistance for Needy Families (TANF) program 

and for nutrition assistance through the Supplemental Nutrition Assistance Program (SNAP), they often go 

to a single State agency office to do so. Unfortunately, that single State agency currently must follow two 

separate sets of reporting, regulatory, and other administrative requirements – one set imposed by HHS 

for TANF, and another by USDA for SNAP. This creates unnecessary administrative burden and potential 

duplication, using up resources that could be better used helping families move towards self-sufficiency. In 

addition, because these programs are currently administered by different Federal departments, they are 

often not well coordinated.

This proposal moves a number of nutrition assistance programs currently housed in USDA – most notably 

SNAP and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) – to HHS and, 

acknowledging the addition of these programs to the Agency, renames HHS the Department of Health and 

Public Welfare (DHPW). To provide for even more coordination across all Federal public assistance programs, 

this proposal also establishes a permanent Council on Public Assistance, housed in DHPW and composed of 

all agencies that administer public benefit programs, including USDA, the Center for Medicare and Medicaid 

Services, the Department of Housing and Urban Development (HUD), and others. This Council would have 

statutory authority to set certain cross-program policies, including on uniform work requirements. 

THE OPPORTUNITY 

This proposal will better align the administration of these public assistance programs at the Federal level 

with how they are often administered at the State and local levels. This will reduce administrative burdens 

and duplications of effort that currently exist for State and local governments. It will also ensure that policies 

are applied consistently across all programs, potentially reducing confusing, complex, and sometimes 

contradictory requirements across programs that can make it difficult for both States and participants to 

follow the rules. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 28 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Move Non-Commodity Nutrition Assistance Programs and Rename HHS

1 CACFP provides reimbursement for meals served by participating child and adult care providers, rather than a 

direct benefit to the household. However, for the same coordination reasons as the near-cash programs, we 

recommend moving it to HHS to align with the Head Start and Child Care programs operated by ACF.

2 Other programs include the Summer Food Service Program, the Food Distribution Program on Indian Reservations, 

the Special Milk Program, Assistance to Nuclear Affected Islands, and Disaster Assistance (not including Disaster SNAP).

FNS currently administers 15 nutrition assistance programs, which can be separated into two major 

categories: “near-cash” benefit programs and commodity-based programs. Near-cash programs provide 

money to low-income households, including through an electronic benefit transfer card or voucher, to 

allow participants to buy food through retail outlets. Commodity-based programs deliver actual food to 

eligible entities, who in turn provide a meal or food benefit to participants. Near-cash benefit programs 

do not need to leverage USDA’s expertise in food procurement or delivery, nor do they primarily fit 

with USDA’s core mission of supporting American farmers and agriculture. Rather, these programs are 

designed to support low-income Americans, a mission area better situated in DPHW. Specifically, the 

Administration proposes to move SNAP, WIC, the Child and Adult Care Food Program (CACFP)1

, and the 

Farmers’ Market Nutrition Programs into ACF. USDA, whether with a smaller FNS or a different division, 

would continue to administer the commodity-based programs, including the National School Lunch and 

School Breakfast Programs, The Emergency Food Assistance Program, the Commodity Supplemental 

Food Program, and others.2

Moving the near-cash benefit programs into ACF would allow for better and easier coordination across 

programs that serve similar populations, ensuring consistent policies and a single point of administration 

for the major public assistance programs. This single point of administration would lead to reduced 

duplication in State reporting requirements and other administrative burdens, and a more streamlined 

process for issuing guidance, writing regulations, and approving waivers. Having all the major public 

assistance programs under one agency would also create more synergies within the Agency, allowing ACF 

to develop a more holistic understanding of how programs interact with each other, which itself could 

lead to better policy analysis and outcomes. For example, as States have provided more TANF benefits 

through non-cash assistance, SNAP enrollment has grown due to individuals becoming “categorically” 

eligible for SNAP. This has resulted in some unintended consequences, such as families becoming eligible 

for SNAP through the receipt of a TANF pamphlet or other non-cash assistance. The Fiscal Year (FY) 2019 

Budget proposed to tighten these loopholes, but combining these public assistance programs under one 

agency would help to increase awareness of these interactions and improve policy development that 

prevents such unintended consequences.

With the move of these non-commodity programs, the welfare portfolio at HHS increases significantly. 

The proposal renames HHS the Department of Health and Public Welfare to more accurately reflect the 

mission of the Agency and raise the profile of non-health related programs within the Agency.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 29

Establish Council on Public Assistance

As part of this initiative, the Administration also proposes to create a permanent Council on Public 

Assistance within the DHPW that would accomplish the goal of ensuring a unified, coordinated focus 

on cross-cutting welfare and workforce issues at the State and local levels, and to drive Federal-level 

program reforms. The Council would be given statutory authorities and responsibilities, including but 

not limited to: 

• Approving service plans and waivers requested by States under Welfare-to-Work projects, assuming

enactment of the FY 2019 Budget proposal;

• Designing uniform work requirements to be implemented across all welfare programs;

• “Tie-breaker” authority to resolve disputes when multiple agencies disagree on a particular policy;

• Designing cross-program standards for program applications, data verification, and program integrity;

• Facilitating information sharing and collection as well as regulatory and other policy guidance

coordination across affected agencies; and

• Recommending programmatic and operational changes to eliminate barriers that it identifies at the 

Federal, State, and local levels to getting welfare participants to work.

The Council would be housed at DHPW and composed of agency heads or their representatives from 

USDA (including from the smaller, reformed FNS focused only on commodity programs), HUD, the 

proposed Department of Education and the Workforce, the Office of Management and Budget, and 

others, as appropriate, and chaired by DPHW senior leadership. Creating this Council would further 

break down silos between agencies operating public assistance programs by establishing an interagency 

coordination and support structure to carry out the welfare reform agenda of the Administration with 

high-level visibility. Because this Council would become the Administration’s welfare policy-making 

apparatus, this proposal would consolidate policymaking functions across the different agencies, likely 

reducing administrative resources and duplication in current policymaking functions, and would ensure 

that Federal public assistance programs are well aligned and focused on promoting opportunity and 

economic mobility.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 30 CENTURY

Consolidate Mission Alignment of

Army Corps of Engineers Civil Works

with Those of Other Federal Agencies 

Army Corps of Engineers Civil Works and

Departments of Transportation and the Interior

Summary of Proposal: This proposal would move the Army Corps of Engineers Civil Works (Corps) out 

of the Department of Defense (DOD) and into the Department of Transportation (DOT) and Department 

of the Interior (DOI) to consolidate and align Corps civil works missions with these agencies.

THE CHALLENGE 

The primary mission of DOD is to provide the military force needed to deter war and protect the security of 

the Nation. The Corps placement within DOD grew out of its historic involvement in military construction. 

Today, the Corps conducts both military and civil works functions. The Civil Works program has three 

primary missions: commercial navigation, flood and storm damage reduction, and aquatic ecosystem 

restoration; the commercial navigation program is split between coastal and inland navigation. 

THE OPPORTUNITY 

Both DOT and DOI have missions that relate to and/or complement the Corps’ civil works missions. 

DOT has a broad overarching systemic view of transportation policy and infrastructure in the United 

States that could beneficially inform the Corps’ transportation-related efforts. DOI administers 

various land, water, and natural resource management programs spanning the country that are 

complementary to Corps efforts. Under this proposal, Corps navigation would be transferred to DOT 

and the remaining Corps civil works missions (flood and storm damage reduction, aquatic ecosystem 

restoration, regulatory, and all other activities) would be moved to DOI, where those activities could 

be integrated and aligned with complementary programs focused on issues like water management, 

ecosystem restoration, and recreation.

Aligning and consolidating Corps civil works mission areas into those of DOT and DOI would increase 

consistency of Federal policy and actions in both transportation and natural resource management, 

resulting in more rational public policy outcomes. It would also enable the broadest possible view 

of both transportation and land and water management infrastructure, thereby leading to improved 

Federal investment decisions. The transfer of certain Corps programs to DOI – particularly when 

coupled with the other proposal in this Volume that would move the National Marine Fisheries Service to 

DOI – consolidates most major land and water resource management programs in the Federal Government 

in one department. Consolidating these programs under one umbrella would improve effectiveness 

of land, water, and natural resource management efforts, as well as infrastructure permitting, across 

Government. It would also place Corps civil works activities in domestic agencies instead of in DOD, 

whose mission is focused on national defense. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 31

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Under this proposal, the Corps commercial navigation functions would move to DOT, whose mission 

already includes Federal responsibility for all other modes of transportation. All other activities, including 

flood and storm damage reduction, aquatic ecosystem restoration, hydropower, regulatory, and other 

activities, would move to DOI. 

Aligning and consolidating the Federal Government’s role in domestic water resources activities would 

provide greater consistency in policy and investment decisions, including comparisons of various 

investment opportunities. Doing so would increase economic efficiency and improve transparency of 

investment decisions. 

Moving Commercial Navigation Functions to the Department of Transportation

Transferring Corps navigation programs to DOT would consolidate responsibility across all transportation 

modes within a single Federal agency, thereby encouraging consistent Federal policy in the transportation 

sector. This consolidation would leverage DOT’s expertise in infrastructure, and make DOT’s maritime 

responsibilities analogous to its role in other transportation sectors. In the maritime sector, DOT’s mission 

would expand to helping States and non-Federal partners make infrastructure investment decisions.

Moving Remaining Functions to the Department of the Interior

The Corps administers an aquatic ecosystem restoration program to implement projects designed to 

benefit fish, wildlife, and their habitat. These projects are often justified by the benefits they provide to 

species protected under the Endangered Species Act and the Migratory Bird Treaty Act, two laws that 

DOI administers with great expertise. Development of these projects requires significant coordination 

with DOI to ensure that the resulting project effectively targets the highest priority needs. If the Corps’ 

restoration program was administered through DOI, the Executive Branch could better direct its ecosystem 

restoration investments to achieve the greatest benefit to fish, wildlife, and their habitat, and better 

leverage the expertise and relationships DOI maintains with State fish and wildlife agencies.

In addition, consolidating the Corps’ regulatory responsibilities for permitting of non-Federal projects 

within DOI would simplify the infrastructure permitting process for stakeholders who often have to 

navigate multiple Federal agency processes when seeking project permits and approvals. Moving 

regulatory responsibilities, including those related to the Section 404 of the Clean Water Act and Section 

10 of the Rivers and Harbors Act, within DOI’s existing permitting programs would produce administrative 

efficiencies and opportunities for simplified interaction with stakeholders. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 32 CENTURY

Reorganize Primary Federal Food Safety Functions 

into a Single Agency, the Federal Food Safety Agency

Departments of Agriculture and Health and Human Services

Summary of Proposal: This proposal would address the current fragmented Federal oversight of 

food safety by reorganizing the U.S. Department of Agriculture’s (USDA) Food Safety and Inspection 

Service (FSIS) and the food safety functions of the U.S. Department of Health and Human Services’ 

U.S. Food and Drug Administration (FDA) into a single agency within USDA. USDA demonstrates 

strong and effective leadership in food safety and maintains an expert understanding of food safety 

issues from the farm to the fork. This proposal would cover virtually all the foods Americans eat.

1 Government Accountability Office, “GAO-17-317: High-Risk Series: Progress on Many High-Risk Areas, While Substantial 

Efforts Needed on Others,” (February 2017).

THE CHALLENGE

For more than forty years, the Government Accountability Office (GAO) has reported that the fragmented 

Federal oversight of food safety “has caused inconsistent oversight, ineffective coordination, and 

inefficient use of resources,1” and food safety has been on GAO’s list of high-risk areas since 2007. FSIS 

and FDA are the two primary agencies with major responsibilities for regulating food and the substances 

that may become part of food. FSIS is responsible for the safety of meat, poultry, processed egg 

products, and catfish, while FDA is responsible for all other foods, including seafood and shelled eggs. 

There are many examples of how illogical our fragmented and sometimes duplicative food safety system 

can be. For example: while FSIS has regulatory responsibility for the safety of liquid eggs, FDA has 

regulatory responsibility for the safety of eggs while they are inside of their shells; FDA regulates cheese 

pizza, but if there is pepperoni on top, it falls under the jurisdiction of FSIS; FDA regulates closed-faced 

meat sandwiches, while FSIS regulates open-faced meat sandwiches. 

To address this fragmented and illogical division of Federal oversight, FSIS and the food safety functions 

of the FDA would be consolidated into a single agency within USDA called the Federal Food Safety Agency. 

GAO and other experts have recommended merging Federal food safety functions as a potential solution 

to this fragmentation. The National Research Council and the Institute of Medicine (now known as the 

Health and Medicine Division of the National Academies of Sciences, Engineering, and Medicine) have 

recommended that the core Federal food safety responsibilities should reside in a single entity or agency, 

with a unified administrative structure, clear mandate, a dedicated budget, and full responsibility for 

the oversight of the entire U.S. food supply. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 33

THE OPPORTUNITY

The new Federal Food Safety Agency would pursue a modern, science-based food safety regulatory 

regime drawing on best practices of both USDA and HHS, with strong enforcement and recall mechanisms, 

expertise in risk assessment, and enforcement efforts across all food types based on scientificallysupported practices. The Agency would serve as the central point for coordinating with State and local 

entities and food safety stakeholders, rationalizing and simplifying the Federal food safety regulatory 

regime. The reform would reduce duplication of inspection at some food processing facilities, improve 

outreach to consumers and industry, and achieve savings over time while ensuring robust and coordinated 

food safety oversight.

While the FDA and FSIS currently have very different regulatory regimes, consolidating FSIS and the food 

safety functions of FDA would allow for a better allocation of resources based on risk, better communication 

during illness outbreaks, and improved policy and program planning through development of a single 

strategic plan. 

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The irrational divisions of responsibility between FDA and FSIS have evolved since the early days of U.S. 

food regulation. The Congress created separate statutory frameworks, spurred in part by various food 

safety concerns and incidents of the day, originally to address the widespread marketing of intentionally 

adulterated foods and the unsafe and unsanitary conditions in meat packing plants in the early 1900s. Over 

the years, the Congress added new authorities to meet new challenges. Over time, the different legislative 

authorities that govern the two agencies have resulted in two distinct regulatory regimes, cultures, and 

approaches to addressing food safety. Thus, fully integrating FSIS and the food safety functions of FDA 

would ultimately require a reconciliation of underlying legislative authorities and regulatory approaches. 

Food Safety and Inspection Service Approach

FSIS is responsible for the safety of domestic and imported meat, poultry, processed eggs, and catfish. Meat 

and poultry undergo continuous (i.e., 100 percent) inspection during slaughter, and one or more Federal 

inspectors are on site during all hours that a slaughter plant is operating, and present for every shift in 

processing plants. FSIS is involved in many areas of food processing and food distribution: the inspection 

of domestic products, imports, and exports; conducting risk assessments; and educating the public 

about the importance of food safety. FSIS ensures the safety of imported products through a three-part 

equivalence process that includes an analysis of the country’s legal and regulatory structure, initial 

and periodic on-site audits to ensure equivalence with FSIS standards, and a continual point-of-entry 

re-inspection of products from the exporting country.

Food and Drug Administration Approach

FDA is responsible for the safety of all U.S. domestic and imported foods except meat, poultry, processed 

eggs, and catfish. FDA conducts inspections of most establishments that manufacture, process, pack, or 

hold foods. FDA requires food importers to verify that their foreign suppliers have adequate preventive 

controls in place to ensure that the food they produce is safe, and FDA can refuse entry into the United 

States of food from a foreign facility if FDA is denied access by the facility or the country in which the 

facility is located. FDA also has a systems recognition program, which determines whether another 

country has comparable regulatory programs and public health outcomes to the United States. Systems 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 34 CENTURY

recognition allows FDA to avoid duplication of effort while leveraging the high-quality work done by 

regulatory authorities in each country. Given the scope of FDA’s responsibilities, FDA inspects food 

establishments based on risk. As required by law, FDA must inspect 100 percent of high-risk domestic 

food facilities every three years. FDA physically inspects less than two percent of imported foods annually 

at the ports. Where FSIS and FDA statutory and/or regulatory regimes overlap, some establishments fall 

under the jurisdiction of both agencies.

Locating the Federal Food Safety Agency at USDA

USDA is well poised to house the Federal Food Safety Agency. USDA is a strong leader in food safety; 

has a thorough understanding of food safety risks and issues all along the farm to fork continuum; and 

many agencies within USDA focus on food safety.

The Agricultural Research Service (ARS) spends about $112 million on in-house food safety research, and 

ARS scientists work with both FSIS and FDA to help develop research priorities and food safety practices. 

In addition, many other programs at USDA have food safety elements, from helping to manage wildlife on 

farms, to monitoring animal health, to collecting pesticide residue data on fruits and vegetables. USDA 

also has established relationships between State departments of agriculture, local farms, and processing 

facilities, and is thus keenly aware of food safety issues at all levels.

Following the food reorganization, FDA (which would be renamed the “Federal Drug Administration”) 

would focus on drugs, devices, biologics, tobacco, dietary supplements, and cosmetics.

The proposed consolidation would merge approximately 5,000 full-time equivalent (FTE) employees 

and $1.3 billion from FDA with about 9,200 FTEs and $1 billion in resources in USDA. In the long term, 

the Administration expects this proposal would result in improvements in food safety outcomes, policy 

and program consistency, and more efficient use of taxpayer resources.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 35

Move Select USDA Housing Programs to HUD

Departments of Agriculture and Housing and Urban Development

Summary of Proposal: This proposal would move the Department of Agriculture’s (USDA) rural 

housing loan guarantee and rental assistance programs to the Department of Housing and Urban 

Development (HUD). Having both USDA and HUD housing programs administered by HUD would allow 

both agencies to focus on their core missions and, over time, further align the Federal Government’s 

role in housing policy. 

1 In general, HUD and USDA rental assistance programs make rents affordable to eligible households by paying the 

difference between the unit’s rent and 30 percent of a household’s adjusted income. These programs include: 

1) tenant-based rental assistance/vouchers for eligible tenants to rent privately owned apartments or single-family 

homes, which can be applied to different properties if tenants move; and 2) project-based rental assistance that is 

attached to specific properties and is available to tenants only when they are living in units at these properties.

THE CHALLENGE 

Currently, USDA and HUD operate similar programs that assist homeowners and low-income renters 

and support rental housing development. Each agency operates its own mortgage insurance programs 

for home purchase and refinance loans, as well as loans to build, rehabilitate, and refinance rental 

housing properties. In addition, the two agencies operate separate rental assistance programs offering 

subsidies to make rents affordable to low-income tenants.1

 The programs, however, are not identical; 

there are differences in eligibility requirements, assistance levels, delivery and oversight structures, and 

other program features that have evolved separately over time. Given that these housing programs are 

currently situated in separate agencies with distinct missions and priorities, incorporating best practices 

across programs and establishing a unified housing policy has been a challenge. This proposal seeks 

to mitigate these issues by moving USDA’s single-family and multifamily loan guarantees and rental 

assistance programs to HUD. 

THE OPPORTUNITY 

Moving USDA housing programs to HUD would foster a more integrated approach to homeownership and 

rental housing programs by consolidating oversight and policy direction under one agency. In the long 

term, it would improve operational efficiency and service delivery through integration of like programs 

and the adoption of best practices.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

USDA’s housing programs, which serve eligible rural areas, were initially established in the 1940s in 

response to an underrepresentation of national housing programs in rural areas. They were also a result 

of the ready-made delivery system USDA had in place through its field office structure for farm loans. 

Since then, the rationale for separate, rural-focused housing programs at USDA has become outdated 

given HUD’s role in serving communities throughout the Nation, including in many rural areas. In fact, 

due in large part to the sheer size of its programs, HUD serves more households in USDA-eligible areas 

than USDA does. For example, as shown in the Figure, HUD’s Federal Housing Administration (FHA) 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 36 CENTURY

guaranteed approximately 633,000 single-family loans in zip codes that were 100 percent USDA-eligible 

from fiscal years 2015 to 2017 compared to 258,000 loans guaranteed by USDA. 

Moving USDA housing programs to HUD would be the 

first step toward achieving long-term improvements 

in operational efficiency and service delivery. For 

example, program requirements, management and 

oversight processes, and systems would be assessed 

to identify and take advantage of best practices from 

each agency. Private-sector partners, including 

lenders and developers, that currently work with 

both agencies to administer housing programs could 

realize efficiencies as conflicting requirements are 

eliminated or reduced. Another long-term objective, 

to the extent it can be achieved without compromising 

Agency mission, would be to produce Federal savings 

by reducing Agency overhead costs. 

This reorganization could be modeled after the provision in a draft House bill, the “FHA-Rural Regulatory 

Improvement Act of 2011,” which proposed to establish a separate HUD Rural Housing office to provide 

loan guarantees and rental assistance in rural areas, and transfer the USDA housing programs into 

that office. This proposal is also consistent with findings from the Government Accountability Office 

(GAO). Since 2012, GAO has issued annual reports on opportunities to reduce fragmentation, overlap 

and duplication, and housing programs at USDA and HUD have routinely been included in that report.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 37

Merge the National Marine Fisheries Service (NMFS) 

with the U.S. Fish and Wildlife Service (FWS)

Departments of Commerce and the Interior

Summary of Proposal: This proposal would merge the Department of Commerce’s (DOC) National 

Marine Fisheries Service (NMFS) with the Department of the Interior’s (DOI) U.S. Fish and Wildlife 

Service (FWS). This merger would consolidate the administration of the Endangered Species Act 

(ESA) and Marine Mammal Protection Act (MMPA) in one agency and combine the Services’ science 

and management capacity, resulting in more consistent Federal fisheries and wildlife policy and 

improved service to stakeholders and the public, particularly on infrastructure permitting.

THE CHALLENGE 

The National Marine Fisheries Service (NMFS) – located in the Department of Commerce’s National Oceanic 

and Atmospheric Administration (NOAA) – and the U.S. Fish and Wildlife Service (FWS) – housed within 

the Department of the Interior (DOI) – administer two foundational laws that aim to prevent extinctions 

and recover fish and wildlife: the Endangered Species Act (ESA) and the Marine Mammal Protection Act 

(MMPA). The Services’ jurisdictions under these two laws is generally split based on habitat type, with FWS 

covering species that spend time on land or in inland fisheries, while NMFS covers mostly marine species.

This split jurisdiction, coupled with the fact that the Services are located in different departments, 

creates a confusing permitting landscape for project proponents. For example, when reviewing the 

impacts of a proposed dam system on endangered species, FWS and NMFS may come up with directly 

contradictory requirements about how that dam system needs to be managed to be ESA compliant. 

FWS may determine that the dam system needs to release extra water to benefit an endangered inland 

fish species, while NMFS may simultaneously conclude that the dam operator should store that water to 

provide future benefits to an anadromous fish under NMFS’s management. The end result is confusion 

and a lack of clarity on how to proceed with the project. 

This proposal would seek to address these concerns by merging NMFS with FWS in DOI, simplifying the 

administration of the ESA and MMPA, and coordinating fish and wildlife science and related resource 

management capacity in one bureau within DOI. 

THE OPPORTUNITY 

This proposal would simplify and bring greater clarity and consistency to the administration of the ESA 

and MMPA, enabling a coordinated and synchronized approach to ESA and MMPA regulatory reform. This 

would result in improved service to stakeholders and the public, particularly on infrastructure permitting. 

This merger would also combine fisheries and wildlife management capacity into one bureau within DOI. 

DOI already carries a great breadth of natural resource management responsibilities, and bringing NMFS 

and certain Army Corps of Engineers programs, as proposed elsewhere in this Volume, into DOI would 

increase the effectiveness of conservation efforts across the Government by putting them all under one 

umbrella. Over time, the proposal may yield savings through the consolidation of administrative support 

functions within the merged FWS and across DOI. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 38 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Merging NMFS into DOI’s FWS presents opportunities to improve implementation of the ESA and MMPA, 

which will benefit of species and stakeholders and improve natural resource management.

With the Services currently housed in different departments and assigned different species under 

their jurisdictions, administration of the ESA and MMPA can be complicated and inconsistent, posing 

challenges for stakeholders and species alike. Under these statutes, both agencies have similar 

responsibilities: NMFS for primarily marine species and FWS for primarily freshwater and land-based 

species. Under the ESA, the Services decide whether to protect a species (i.e., list it as threatened or 

endangered), designate critical habitat for listed species, and perform consultations for Federal actions 

that may impact listed species or their critical habitat. Under the MMPA, the Services review and issue 

permits that allow the hunting, harassing, or killing of marine mammals in limited circumstances. 

In recent years, FWS and NMFS have sought to better align their implementation of the ESA. Rather than 

pursuing individual regulations that govern ESA implementation, the Services have undertaken several 

joint rulemakings in recent years, which establish clear and consistent definitions and processes for how 

the ESA should be administered. 

However, bringing NMFS into FWS would also improve the effectiveness of fish, wildlife, and natural 

resource management activities by coordinating protections for jointly managed species, improving 

interagency coordination, and streamlining permitting. Both Services engage in complementary scientific 

research, voluntary habitat conservation, law enforcement, and international conservation work. 

A merger provides an opportunity to look across this suite of activities to direct resources at the highest 

value conservation work and to discover agency best practices that could be applied more broadly.

This idea is not new. Dating back to the Carter Administration, previous administrations and congresses 

have proposed reorganizing NMFS and FWS, with a focus on improving natural resource management. 

Those past proposals span a wide spectrum. From smallest to largest, these proposals have suggested 

moving NMFS’s ESA responsibilities to FWS, merging NMFS into FWS, moving NOAA into DOI, and 

establishing a new Department of Natural Resources.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 39

Consolidation of Environmental Cleanup Programs

Departments of the Interior and Agriculture, and the Environmental Protection Agency

Summary of Proposal: This proposal would consolidate portions of the Department of the Interior’s 

(DOI) Central Hazardous Materials Program and the Department of Agriculture’s (USDA) Hazardous 

Materials Management program into the Environmental Protection Agency’s (EPA) Superfund program. 

This consolidation would allow EPA to address environmental cleanup under the Comprehensive 

Environmental Response Compensation & Liability Act (CERCLA) on Federal land regardless of which 

of these agencies manages the land, while DOI and USDA would maintain their existing environmental 

compliance, bonding, and reclamation programs for non-CERCLA sites.

THE CHALLENGE 

The Comprehensive Environmental Response Compensation & Liability Act of 1980 (CERCLA) provided 

the President with the authority to respond to the release of hazardous substances that pose a threat to 

public health or the environment. EPA was designated as the lead agency for developing and implementing 

guidance and regulations for addressing those releases, and approving remedies for the most contaminated 

sites in the country (i.e., those sites that end up on the National Priorities List (NPL)). The job of actually 

performing and paying for the cleanup activities was then distributed across the Federal Government to 

ensure that agencies have an incentive to be good environmental stewards of the properties they operate, 

manage, or administer. In general this system works as intended; agencies such as the Departments of 

Energy and Defense, for example, pay for the cleanup associated with their activities on properties they 

operate, manage, or administer.

The system becomes more challenging when addressing environmental conditions at abandoned mine 

sites, which are present on both private and public lands. EPA is delegated authority for conducting 

cleanup at mining sites on private lands, while DOI and USDA are responsible for executing cleanup at 

mining sites on Federal lands. The problem is that DOI and USDA inherited over 80,000 abandoned mine 

sites, over which they had no control prior to the mid-1970s. While the vast majority of these sites have 

only minor environmental or physical hazards, some require a more extensive environmental cleanup. 

In those instances, DOI and USDA apply EPA’s guidance, but discrepancies in interpretations have led to 

inefficiencies and inconsistencies across the Federal cleanup regime. In some instances, inconsistent 

cleanup determinations within a mining district or watershed have been the result of these types of 

conflicting interpretations. In addition, due to competing mission priorities within DOI and USDA, the 

cleanup activities at these sites do not necessarily receive the same level of attention that they would if 

they were part of EPA’s Superfund program.

Consolidating the cleanup programs in a way that allows EPA to add sites in need of CERCLA-level attention to 

the Superfund program would create efficiencies by eliminating inconsistent interpretations among various 

agencies, reducing the number of decisions and approvals, and ultimately expediting the cleanup of sites.

THE OPPORTUNITY 

This proposal would reduce inefficiencies, oversight costs, and indirect costs by consolidating the 

environmental assessment and cleanup activities under the agency with the most significant expertise 

in this area.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 40 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

This proposal would integrate portions of the DOI and USDA cleanup programs into EPA’s Superfund 

program in order to streamline the Federal Government’s response to abandoned mine sites in need of 

environmental assessment and cleanup. The Federal Government’s responsibility for cleanup is currently 

dispersed across agencies based on jurisdiction, as opposed to expertise and liability. This proposal 

would enable better use of resources and expertise, streamline the implementation of statutory and 

regulatory requirements, and facilitate a more comprehensive and consistent approach to addressing 

contaminated lands across the Nation.

The agencies estimate that there are over 80,000 abandoned mine sites on Federal lands, close to five 

percent of which could require a CERCLA-level cleanup. While DOI and USDA attempt to address those 

sites as they are identified, their environmental cleanup programs are not core to their missions, and 

therefore present a challenge for the agencies to address the wide range of environmental issues stemming 

from mining sites and other activities on Federal lands. As such, certain sites requiring CERCLA-type 

cleanup may not be addressed in as timely a manner as they could be if included as part of a more holistic, 

national program. 

The multi-million dollar environmental liabilities associated with abandoned mine sites pre-date modern 

Federal regulation of environmental issues. The General Mining Law of 1872 was enacted to help develop 

the West by encouraging mining on Federal lands without the need for bonding or permitting. In the 

mid-1970s, environmental and other land control issues drove the desire to develop a more comprehensive 

Federal approach to the development of our natural resources. It was at that time that the Federal Land 

Policy and Management Act of 1976 and the Surface Mining Control and Reclamation Act of 1977 were 

passed. Under these laws, DOI and USDA administer the environmental compliance, financial bonding, 

and closure reclamation of mine sites on Federal lands. Due to their efforts since the passage of those 

laws, the vast majority of modern mine sites do not rise to the level of environmental degradation that 

would require a response under the CERCLA. DOI and USDA, however, continue to be responsible for 

addressing the environmental problems stemming from the abandoned mines from the General Mining 

Law of 1872 era simply due to their presence on Federal lands.

EPA is the Federal agency responsible for the development of regulations, procedures, and guidance used 

by the Federal Government to conduct environmental cleanup. EPA is also responsible for overseeing 

and approving remedies put into place at Federal sites on the NPL and providing technical assistance 

to States that oversee cleanup activities at Federal sites that are not on the NPL. Due to this role, EPA 

serves as the Federal Government’s subject matter expert on decontamination and hazardous substance 

risk assessment.

Funding and FTEs would shift from DOI (up to $10 million and eight FTEs) and USDA (up to $3.5 million 

and six FTEs) to EPA to cover the increase in the assessment and cleanup workload at EPA, while DOI 

and USDA would continue to maintain funding and FTEs for their existing compliance, bonding, and 

reclamation programs for modern mines. Although the end result would be a slightly larger Superfund 

program, it would continue to allocate resources based on risk. In addition, project managers would 

have control over the cleanup work and not have to direct the actions through another Federal agency 

manager at Federal sites. The affected States, Tribes, and communities surrounding these sites would 

also have a single Federal point of contact for raising their concerns with the cleanup approach. This 

may also lead to certain sites that have been languishing receiving attention, which could result in more 

favorable conditions for enjoying the natural environment of our Federal lands, and the rivers and streams 

that run through them.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 41

Optimization of Humanitarian Assistance

Department of State and U.S. Agency for International Development

Summary of Proposal: The Administration is launching a process to optimize U.S. humanitarian 

assistance. U.S. humanitarian assistance programs are conducted by three Department of State 

(State) and U.S. Agency for International Development (USAID) offices, dividing decision-making on 

humanitarian policy and implementation. The Administration will develop a proposal to reorganize 

how humanitarian assistance is provided across State and USAID to maximize our leverage and assure 

all assistance meets our foreign policy goals and objectives, including the capacity to drive strong 

United Nations (UN) humanitarian system reform, increase burden sharing, minimize duplication 

of effort in programming and policy, and maximize efficiency in meeting humanitarian needs and 

resolving underlying crises. In developing this proposal, the Administration will address changes 

needed to achieve a unified voice on humanitarian policy, budget, and reforms to optimize outcomes. 

The process will consider all options to achieve these objectives. As part of this process, State and 

USAID will submit their joint recommendation to the Office of Management and Budget (OMB), as 

part of their Fiscal Year (FY) 2020 Budget request, to optimize humanitarian assistance programs.

THE CHALLENGE 

In FY 2017, State and USAID provided $9 billion in humanitarian assistance. More than 65 million people 

are displaced worldwide with needs outstripping limited resources. As a result, it is critical to maximize 

the impact of U.S. taxpayer resources spent on humanitarian assistance and deliver the greatest outcome 

to beneficiaries for those investments. Currently, three U.S. Government offices — one at State and two 

at USAID — share the responsibility to establish humanitarian policies and implement related assistance 

programs. Given the size of U.S. humanitarian relief efforts, it is imperative that they coherently plan, 

budget, and program against needs, providing the best possible outcomes for beneficiaries and value 

for the taxpayer as well as avoiding duplication of effort and fragmentation of decision-making. 

State’s Bureau for Population, Refugees, and Migration (PRM) serves as the Government lead for program 

response to refugees (i.e., those who have crossed an international border). Within USAID’s Bureau for 

Democracy, Conflict, and Humanitarian Assistance (DCHA), the Office of U.S. Foreign Disaster Assistance 

(OFDA) is the lead Federal coordinator for international disaster assistance and aid to internally-displaced 

persons (IDPs). USAID’s Office of Food for Peace (FFP) is the lead Federal provider of international food 

assistance, including to IDPs and refugees. All three offices—PRM, OFDA, and FFP—address the needs 

of victims of conflict, where, without careful coordination, there is the risk of overlapping effort. 

While PRM and DCHA have always responded to conflict-induced displacement, in the last decade the 

composition of global beneficiaries has changed dramatically. Victims of conflict have become the largest 

share of affected persons globally. Conflict-related emergencies — which are man-made, inherently 

political, and require diplomatic engagement—impact a changing mix of refugees, IDPs, and other affected 

persons, which requires the three Government offices to be able to respond in a fluid and adaptable way. 

The most recent example is the Rohingya humanitarian emergency in Burma and Bangladesh. OFDA 

and PRM separately fund their partners to assist victims of conflict in Burma. PRM funds additional 

partners to support Rohingya who have become refugees by crossing into Bangladesh. FFP provides 

food for refugees, IDPs, and others affected in both Burma and Bangladesh. In an emergency situation 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 42 CENTURY

like this, it can be difficult to consistently execute a cohesive U.S. response that uniformly monitors the 

performance of implementers, including UN agencies, ensures there are no duplications or gaps in aid, 

and deploys a seamless and effective assistance strategy for all affected people. 

Under the current set-up, improvements in coordination across U.S. humanitarian assistance are 

dependent upon the circumstances and willingness of those involved on a case-by-case basis. For 

example, in 2015, thanks to their good working relationship, the heads of USAID and State worked 

together to prevent the closure of the Dadaab refugee camp and the forced return of its occupants to 

Somalia. 

Similarly, the delivery of humanitarian assistance across different offices can result in multiple and divergent 

Government voices in international fora on UN humanitarian policy and other aspects of humanitarian 

assistance, if not well coordinated, in an environment where most other participant countries have a single 

voice, represented by their foreign ministries. This results in confusion and reduces the effectiveness of 

the United States relative to its scale in the global humanitarian system. 

This structure can also create additional programmatic and other costs and inefficiencies in implementing 

U.S. assistance, ranging from programming efforts that are conflicting, or contain gaps, to the use 

of different contracting, oversight, accountability measures, systems, policies, and procedures with 

implementers. In addition, it impedes broader seamless and coherent responses encompassing all 

tools available to the United States, from relief assistance to development support. There is a growing 

recognition that relief-development coherence is key to solving prolonged large-scale displacement.

The evolution and expansion in global humanitarian needs and responses in recent years and the structure 

of the U.S. humanitarian response apparatus, among other factors, underscore why we now need to 

optimize how we provide humanitarian assistance.

THE OPPORTUNITY 

The ultimate goal is to achieve strategic, coherent, and seamless U.S. humanitarian programmatic 

and policy responses that best achieve our foreign assistance and policy goals, and that maximize our 

leverage, the benefit to recipients of assistance, and the value to the U.S. taxpayer. The Administration’s 

reorganization proposal will strengthen the capacity of the U.S. Government to achieve critical major 

reforms within the UN humanitarian system, optimizing outcomes and securing greater accountability 

and transparency within the multilateral humanitarian system. 

Specifically, the final proposal will seek to achieve:

• A seamless cohesive approach to humanitarian programming and funding delivered by the United

States;

• A unified voice that ensures the United States exercises a level of influence over donors and multilateral 

humanitarian efforts commensurate with our overall level of humanitarian funding and that we are

not disadvantaged in dealing with the foreign ministries of other nations. A unified voice will not only 

allow the U.S. Government to more effectively and consistently drive necessary reforms amongst

implementers, particularly the UN, but will also strengthen our ability to encourage other donors to 

increase their share of humanitarian assistance; and

• Strong and consistent oversight of U.S. Government implementing partners’ performance, including 

the UN humanitarian partners.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 43

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Each U.S. humanitarian office—PRM, OFDA, and FFP—has its strengths, and often works well with the 

others, both in Washington and in the field, when their leadership jointly focus on addressing specific 

challenges and improving specific responses. However, the actions taken by State and USAID to date have 

not overcome structural deficiencies and therefore have been unable to achieve a systematic, optimal, 

and consistent approach to humanitarian operations, programming and standards, policy issues, and 

coordination with the UN and other implementers, other donors and grantees. 

As outlined in the FY 2019 Budget, following an in-depth external study of USAID’s humanitarian offices 

in 2016, the Administration decided to merge OFDA and FFP. The merger will allow these two offices to 

increase the efficiency and effectiveness of USAID’s humanitarian programs. The Administration intends 

to go beyond the FY 2019 Budget by elevating the merged OFDA and FFP offices in a new USAID bureau. 

In addition, the Administration is deploying a new approach to relief in the near term across State and 

USAID as a stopgap measure that improves how we conduct humanitarian assistance within the current 

U.S. humanitarian structure, and is also launching a process that will optimize the structure of U.S. 

humanitarian assistance, culminating with the delivery of a joint recommendation for consideration by 

OMB as part of the 2020 Budget development process.

Elevation of USAID’s Humanitarian Assistance Offices into a Bureau 

As a first step, USAID is currently seeking to elevate the merged OFDA and FFP into a new Bureau. The 

Bureau would report to a new Associate Administrator for Relief, Resilience, and Response. This action is 

intended not only to raise the importance of humanitarian assistance within USAID and with domestic and 

international stakeholders, but also to improve and eliminate duplication within USAID’s crisis responses, 

including those crises driven by persistent conflict and food insecurity. The improvements include 

facilitating the transition from relief to development in new and ongoing humanitarian emergencies.

New Approach to Relief 

State and USAID are embarking on a new approach to relief in the near-term, discussed in broad terms 

in the FY 2019 Budget, to begin to address three presidential priorities to 1) increase burden-sharing by 

other donors; 2) catalyze advance reform at the UN and other implementing partners; and 3) improve 

internal Government coherence on humanitarian assistance. Under this approach, State and USAID will 

both continue to engage in humanitarian policy and diplomacy.

Amplifying U.S. Global Leadership by Optimizing U.S. Humanitarian Assistance

In addition, the Administration proposes to launch a process to revisit and optimize humanitarian 

assistance across State and USAID, to result in a reorganization proposal in the 2020 Budget. This proposal 

to optimize how humanitarian assistance is provided across State and USAID will establish the capacity 

to drive strong UN humanitarian system reform, increase burden-sharing, minimize duplication of effort 

in programming and policy, and maximize efficiency, and empower our diplomatic efforts to resolve 

conflicts and end long-standing displacement. Table 1 lays out the key challenges and risks, as well as 

the desired outcomes to be addressed in a final 2020 Budget proposal.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 44 CENTURY

In developing this proposal, the Administration will address fundamental changes needed to achieve a 

unified voice on humanitarian policy, budget, and reforms to optimize outcomes by institutionalizing the 

core elements of the new approach to relief, to optimize the effectiveness of U.S. humanitarian assistance, 

and to make the coordination of policy and implementation across State and USAID seamless and more 

durable, accountable and effective. 

Table 1:

Optimization of Humanitarian Assistance – Current Challenges and Risks, and Desired Outcomes

Current Challenges and Risks

• Programming overlap, gaps and inconsistencies

across programs

• Voices and policy positions not fully

coordinated in international forums and

negotiations

• Suboptimal policy positions and compromises

in international negotiations

• Difficulties in shifting funds across refugees,

IDPS, and food as needed to address changing

situations

• Different and suboptimal business models for

providing assistance

• Suboptimal accountability, transparency,

efficiency and effectiveness

• Duplicative and different oversight and

reporting requirements

Desired Outcomes

• Humanitarian leadership optimized to achieve

foreign policy priorities, including UN reform and

other reforms, coherent policy and programming

• Increased burden-sharing

• Strengthened diplomacy to resolve conflicts

• Seamless, coherent budgeting, planning,

and programming (including planning for

contingency needs)

• Unified voice that seeks optimal UN reforms

• Seamless implementation of reliefdevelopment coherence across affected

persons regardless of status, not just IDPs

• Provision of aid based on needs (not status)

• Ability to surge in unified, seamless response 

across all humanitarian assistance as crises evolve

• Ability to use funding as needed either for

refugees or IDPs and other affected persons

• Significant and measurable improvements

in outcomes for beneficiaries and value for

U.S. taxpayers, including accountability and

transparency

• Seamless and coherent responses

encompassing all tools available from relief

assistance to development support
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 45

Development Finance Institution

Overseas Private Investment Corporation and USAID Development Credit Authority

Summary of Proposal: The Development Finance Institution (DFI) brings together the U.S. 

Government’s development finance tools, such as the Overseas Private Investment Corporation 

(OPIC) and the Development Credit Authority (DCA) of the U.S. Agency for International Development 

(USAID), in a reformed and modernized way to leverage more private sector investment, provide 

strong alternatives to state-directed initiatives, create more innovative vehicles to open and expand 

markets for U.S. firms, and enhance protections for U.S. taxpayers. 

THE CHALLENGE 

“Development finance” refers to the use of tools such as loans, guarantees, and political risk insurance 

to facilitate private-sector investment in emerging markets with the goal of achieving positive 

developmental impact. Public-sector support aims to mobilize transactions that the private sector 

wouldn’t do on their own. 

The U.S. Government has used these tools through OPIC to back projects in key sectors such as 

power, water, and health that improve the quality of life for millions, and help lay the groundwork 

for creating modern economies. Likewise, the U.S. Government has used USAID’s DCA risk-sharing 

guarantee program to drive private investment into countries and sectors with no or insufficient access 

to commercial finance. 

Current U.S. development finance tools are outdated and fragmented across multiple Federal agencies, 

and often are not well coordinated. This has hampered the Government’s ability to make investments 

that support key U.S. foreign policy and national security objectives, and resulted in the inefficient use of 

taxpayer dollars. For example, OPIC and DCA have operated for over 15 years without significant legislative 

updates, and lack authorities to pursue more innovative deals in pursuit of our foreign policy interests. 

These institutions also have some duplicative functions, and lack the most modern development finance 

tools needed to counter the state-driven model of countries like China, or to cooperate with the DFIs of 

our allies like the United Kingdom, Germany, Canada, and Japan, who are investing heavily throughout 

the developing world. 

DFI brings together the U.S. Government’s development finance tools, such as OPIC and DCA, in a 

reformed and modernized way to leverage more private-sector investment, provide strong alternatives 

to state-directed initiatives, create more innovative vehicles to open and expand markets for U.S. firms, 

and enhance protections for U.S. taxpayers. 

THE OPPORTUNITY 

With a new DFI, the United States will be better placed to advance our development and national security 

goals in the developing world and boost the competitiveness of American businesses, which are critical 

for promoting American prosperity and security. Compared to the status quo, the DFI will be better 

aligned with the President’s National Security Strategy and better able to manage U.S. taxpayer risk. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 46 CENTURY

A consolidated DFI will increase coordination and operational efficiencies, making more funding available 

for programming. In addition, it will be more nimble and better able to mobilize private sector funding 

with a modernized 21st Century toolkit allowing it to compete globally.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

In November 2017, before the Asia-Pacific Economic Cooperation (APEC) Summit in Vietnam, the President 

committed to reforming U.S. development-finance institutions to “better incentivize private-sector 

investment” and “provide strong alternatives to state-directed initiatives that come with many strings 

attached.” Additionally, the President’s National Security Strategy prioritizes efforts to catalyze private 

sector activity in developing countries to complement our more traditional foreign assistance programs.

The DFI will have reformed and modernized tools so that it is more interoperable with partners, while 

adhering to the key principles of mitigating risk to the U.S. taxpayer and not displacing private sector 

resources. The DFI will have similar tools to OPIC and USAID’s DCA today, (e.g. loans, guarantees, and 

insurance). In addition, the DFI will be able to support development finance related feasibility studies, 

project-specific grants, and equity investments, with appropriate constraints.

The DFI will have an updated governance structure and strong institutional linkages with the Department 

of State (State) and USAID to ensure the prioritization of projects that are critical to national security and 

developmentally impactful. The connectivity will drive better pipeline and programming coordination 

amongst USG agencies. For example, in a high-priority country, we envision complementary activities 

that could entail having the DFI support a feasibility study and subsequent early-stage financing for a 

new project, while USAID funds economic policy reforms that strengthen the enabling environment 

and attract more private-sector investment. To cement this alignment, the Fiscal Year (FY) 2019 Budget 

proposes resources for State/USAID programming (and other transfer authorities) to support activities 

such as grants for technical assistance or “wraparound” services that complement and support the DFI’s 

project-specific investments.

The new DFI governance structure will ensure that U.S. Government investments catalyze, but do not 

displace, the private sector, and will better manage taxpayer risk. For example, the Budget proposes 

annual loan limitations, in addition to an overall exposure cap, and the Administration’s proposal includes 

investment constraints to enhance taxpayer protections. The Budget also requests significantly expanded 

funding for inspections, evaluations, and oversight of the DFI.

The Administration expects savings from eliminating some redundant efforts in development-finance 

programs, such as risk-management, credit-modeling, and servicing. These savings will allow the DFI 

to allocate more effort to its mission than to duplicative overhead activities.

The Administration’s DFI proposal is consistent with similar proposals from a range of independent 

stakeholder groups and think tanks such as the Modernizing Foreign Assistance Network and the Center for 

Strategic and International Studies, and derives important lessons from other countries’ DFIs. Additionally 

this proposal reflects significant coordination among all affected agencies and various other stakeholders. 

The Administration has indicated strong support for the goals of H.R. 5105/S.2463, the ‘’Better Utilization 

of Investments Leading to Development (BUILD) Act of 2018.’’ The legislation is broadly consistent with 

the Administration’s DFI proposal, and the Administration has been working with the Congress to make 

adjustments to the text as the bills progress through the legislative process.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 47

Structural Transformation of Central

Washington-Based Bureaus at the

U.S. Agency for International Development

U.S. Agency for International Development

Summary of Proposal: The U.S. Agency for International Development (USAID) is planning an 

extensive, Agency-driven structural reorganization of its headquarters Bureaus and Independent 

Offices, as a foundational component of its overall plans to better advance partner countries’ 

self-reliance, support U.S. national security, and ensure the effectiveness and efficiency of foreign 

assistance. Most significantly, USAID’s transformation will accomplish the following: 1) elevate 

and realign its humanitarian assistance, conflict-prevention and response, and resilience and food 

security programs; 2) consolidate and reorient its centralized program design, innovation, and 

technical support functions to better support overseas Missions; and 3) consolidate and streamline 

policy, budget, performance, and central management functions.

THE CHALLENGE 

USAID has not undergone a comprehensive structural transformation in more than 20 years. The operating 

environment for USAID has changed dramatically in those 20 years, and USAID is looking to change with it 

by creating a more dynamic and efficient organization that enables its people and programs to be more 

effective while also maintaining the Agency’s leadership on development. The goal of this transformation 

effort is to strengthen the Agency’s core capabilities. Specifically, that means breaking down stove-pipes 

and creating coherent and rational structures that can enable more efficient coordination and integration 

of programs and resources. It also means continuing to work to unlock information, analysis, and ideas 

internally and externally that can improve decision-making and programming across the organization. For 

example, the magnitude, complexity, and protracted nature of humanitarian assistance, stabilization, and 

resilience needs worldwide has outstripped USAID’s existing structures and approaches, so the Agency 

has planned an improved structure that will enable fully-integrated responses and effective transitions 

from recovery to longer term resilience and self-sufficiency. Further, specialized technical expertise and 

cross-cutting capabilities are dispersed inconsistently and in some cases duplicatively across the Agency, 

with no single centralized resource to support Missions overseas in designing innovative and effective 

programs. USAID’s budget, policy, and evidence-based performance functions are currently dispersed 

among multiple bureaus and offices, so the Agency is planning to bring those functions under one umbrella, 

as well as ensure coherence in operationalizing the vision for self-reliance that is the centerpiece of the 

future USAID. Lastly, the restructuring is exploring how to better integrate core management functions 

to strengthen the operational foundation of the Agency.

To address these challenges, USAID is pursuing a comprehensive set of experience-based, employee-driven 

reforms across the Agency. These proposals will elevate and consolidate humanitarian assistance; better 

align efforts to prevent and respond to conflict and conduct stabilization and response efforts; enable the 

building of more resilient communities and countries in the face of shocks; reinforce advanced program 

design, innovation, and implementation as core capabilities; strengthen connections and coherence 

between policy, budget, and strategy; and align central management services.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 48 CENTURY

THE OPPORTUNITY 

These reforms will strengthen USAID’s core capabilities in priority areas, rationalize Bureau and Office 

structures, and establish clear roles and responsibilities to reduce duplication, improve accountability, 

and maximize effectiveness. As a result, USAID will be better positioned to support the President’s 

National Security Strategy and economic growth objectives through foreign assistance, including through: 

better development and emergency response outcomes; increased self-reliance in partner countries and 

a reduced need for traditional foreign assistance; improved USAID program and procurement design 

and implementation; and greater accountability, effectiveness, and efficiency in using taxpayer dollars.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

USAID’s ambitious structural reorganization will provide a strong foundation for its broader transformation 

plans, which emphasize policy and process reforms across such topics as ending the need for foreign 

assistance, better supporting national security, opening markets for U.S. businesses, and driving reforms 

in human resources, information technology, and procurement. These structural changes will help 

ensure that improvements are sustainable by strengthening core Agency capabilities and coordination, 

improving the design and implementation of humanitarian and development assistance programs, and 

streamlining offices and decision-making. USAID is investing extensive time, expertise, and leadership 

focus in analyzing, developing, and implementing seven major Bureau changes, including in many 

Washington-based offices. Each major change summarized below is supported by a strong rationale and 

detailed plans for successful implementation. Taken together, they represent a significant re-envisioning 

of USAID and its potential to support U.S. national security, foreign policy, and economic goals while 

effectively managing and overseeing taxpayer-funded programs.

Associate Administrator for Relief, Response, and Resilience

The new Associate Administrator will lead an integrated effort to strengthen and further unify humanitarian 

assistance with resilience and food security, and with prevention and response to conflict and crises. 

By providing overall strategic and programmatic guidance, the Associate Administrator will reduce 

stove-piping, improve decision-making, and ensure effective, timely, and appropriate coordination of 

critical programming and technical assistance. This position will also reduce the number of individuals 

who report directly to the Administrator and Deputy Administrator, and allow them to focus on broad 

strategy and management of the overall Agency.

Bureau for Humanitarian Assistance 

The current structure of humanitarian assistance at USAID is out of date and based on an artificial 

bifurcation of food and non-food humanitarian assistance, which impedes fully-integrated, effective, and 

efficient responses. The new Bureau for Humanitarian Assistance will consolidate USAID’s current Offices 

of Food for Peace and U.S. Foreign Disaster Assistance, uniting humanitarian programming, eliminating 

confusion and duplication in the field and in Washington, D.C., and allowing beneficiaries and partners 

to deal with one cohesive humanitarian assistance provider within USAID. This unified structure will 

improve the Agency’s core capability to save lives, reduce hunger and human suffering, and mitigate the 

impact of disasters and complex emergencies around the world.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 49

Bureau for Resilience and Food Security 

Elevating leadership and strengthening Mission support on resilience will better enable USAID’s programs 

to break the cycle of chronic vulnerability, extreme poverty, and hunger driven by recurrent shocks and 

stresses – and therefore to reduce the types of instability that threaten U.S. national security. The new 

Bureau for Resilience and Food Security will combine the capabilities and expertise of the current Bureau 

for Food Security (including the Center for Resilience), the Office of Water, and the Climate Adaptation 

team to provide technical leadership and more efficient and effective support to field Missions through 

four Centers that cover Agriculture, Resilience, Water, and Nutrition, as well as through cross-cutting 

capabilities such as research.

Bureau for Conflict Prevention and Stabilization 

Approximately 70 percent of USAID’s programming is in fragile states or countries in conflict, emerging from 

conflict, or at risk of conflict, yet USAID’s current Bureau for Democracy Conflict and Humanitarian Assistance 

(DCHA) does not always operate as one unit with one voice. The new Bureau for Conflict Prevention and 

Stabilization will house USAID’s current DCHA Offices of Transition Initiatives; Civilian-Military Cooperation; 

Conflict Management and Mitigation; and Program, Policy and Management, along with Countering Violent 

Extremism staff, in a single streamlined and focused Bureau. The Bureau will lead the implementation of 

effective conflict prevention, stabilization, and political transition assistance through field programs to 

respond to acute crises, integrated technical assistance and services to Missions, and surge capacity and 

rapid response support. Enhancing and more effectively integrating these functions in one bureau will 

strengthen USAID’s ability to counter violent extremism, advance U.S. national security, achieve long-term 

development goals, and help more countries move towards self-sufficiency.

Bureau for Development, Democracy and Innovation 

In USAID’s current structure, there is no single, central resource for program design and innovation, 

with relevant technical expertise spread inefficiently and inconsistently across the Agency, both at 

headquarters and in regional Bureaus. The new Bureau for Development, Democracy and Innovation 

will bring together the technical expertise of the current Bureau for Economic Growth, Education, and the 

Environment; the Center for Democracy, Human Rights, and Governance; the Global Development Lab; 

regional bureaus; and other components such as American Schools and Hospitals Abroad, the Center for 

Faith-Based and Community Initiatives, and Minority-Serving Institutions Program. The Bureau will be 

a one-stop shop for technical expertise and high-quality program-design support. It will house several 

Centers on specific topics and help Missions to improve programmatic results by integrating innovation, 

technology, inclusivity, good governance, private-sector engagement and partnerships, expertise in 

managing small grants, and other cross-cutting priorities into long-term development efforts. 

Associate Administrator for Strategy and Operations 

Currently, USAID’s budget, financial management, policy and learning, and other management functions are 

dispersed across multiple Bureaus that report separately to the Administrator and Deputy Administrator. 

The increasing complexity of USAID’s mission means that these two Agency leaders can no longer 

devote sufficient attention to strategic and programmatic priorities while also driving management 

reforms, operational and procurement improvements, and overseeing USAID’s finances and human 

capital. USAID is exploring the feasibility and value of establishing a new Associate Administrator for 

Strategy and Operations that would unite these functions under a single dedicated leader for the first 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 50 CENTURY

time, to reduce stove-piping; improve decision-making; and ensure effective, timely, and appropriate 

coordination of critical operations and management functions. This role would also reduce the number 

of individuals who report directly to the Administrator and Deputy Administrator, to allow them to focus 

at the strategic level while the Associate Administrator for Strategy and Operations would be accountable 

for all management functions on a day-to-day basis.

Bureau for Policy, Resources and Performance 

The new Bureau for Policy, Resources, and Performance (PRP) will consolidate staff from the current 

Bureau of Policy, Planning and Learning, the Office of Budget and Resource Management, the Bureau for 

Management, and the Global Development Lab to better coordinate, align, and strengthen USAID’s foreign 

assistance policy, resource management, and evidence-based performance management functions. The 

PRP Bureau would report to the newly-established Associate Administrator for Strategy and Operations.

Bureau for Management 

Multiple Agency-wide management and human capital functions reside in organizational units outside of 

the Management Bureau. The Bureau for Management oversees most procurement and program-funded 

human resources functions, whereas the remainder of human resource functions are housed within the 

Bureau for Human Capital and Talent Management (HCTM), and the Office of Security (SEC) is currently a 

stand-alone organizational unit. The merger of HCTM and SEC with the Management Bureau will provide 

for a more simplified operational structure. It will reduce direct reports to the Administrator, increase 

accountability and direct oversight, allow for all human capital components to reside in a single Bureau, 

and support a more streamlined security clearance process. The Bureau for Management would report 

to the newly-established Associate Administrator for Strategy and Operations.

Bureau for Asia 

The countries of Afghanistan and Pakistan were formerly part of USAID’s Bureau for Asia until 2010, when 

the previous Administration established the separate the Office of Afghanistan and Pakistan Affairs (OAPA) 

to address the tremendous pace of operations in the two countries. Designed as an interim solution 

intended to help administer the ramping up of development programs in Afghanistan and Pakistan, 

the current maturation of those programs, and the necessity for improved regional coordination and 

effectiveness to carry out the President’s South Asia Strategy, warrant the reintegration of OAPA into a 

single Asia-wide regional Bureau.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 51

Reorganizing the U.S. Office of

Personnel Management

U.S. Office of Personnel Management

Summary of Proposal: This proposal would reorganize the U.S. Office of Personnel Management 

(OPM) and the process by which Federal personnel management and operations functions are 

coordinated. Specifically, the proposal would move OPM’s policy function into the Executive Office 

of the President (EOP) and elevate its core strategic mission, while devolving certain operational 

activities, including the delivery of various fee-for-service human resources and IT services, to 

other Federal entities better positioned to provide transaction processing services that meet 21st 

Century needs. 

THE CHALLENGE 

Forty years ago, OPM was established in statute by the Civil Service Reform Act of 1978, and was tasked 

with aiding and advising the President on actions to promote an efficient civil service. This was the 

last time the Government implemented broad civil service reform. The General Schedule Federal job 

classification structure dates back to 1949. Today, there is broad acknowledgment that the Federal 

employment system is archaic in many significant respects, and does not reflect the realities of the 

contemporary workforce. Evidence of this recognition is the creation by the Congress in recent years 

of a variety of alternative personnel systems. These systems addressed problems impacting specific 

agencies as they arose. This has postponed a broader overhaul of the core personnel system, and 

left a fragmented personnel structure – roughly a third of which now lies outside the purview of OPM.

Meanwhile, the vast majority of OPM’s workforce and budget are currently dedicated to operational 

activities—with a small minority dedicated to policy and oversight activities related to, for example, 

hiring, performance management, compensation, merit system compliance, and labor relations. On a 

reimbursable basis, OPM performs human resources-related services, including background investigations 

and information technology services, for other Federal agencies. In recent years, several high-profile 

incidents concerning these services—including a major information security breach—have created major 

distractions for OPM leadership that have nothing to do with the core personnel functions that are OPM’s 

primary charge. 

The 2.1 million-person civilian workforce represents one of the Federal Government’s largest and most 

impactful investments. Like any large corporation, the Government is only as effective as its people. Yet 

the Government Accountability Office has designated strategic human capital management as a high-risk 

area since 2001, because the Federal Government does not do an effective job attracting, managing, and 

retaining a skilled workforce. An extensive literature review documents these failings. The causes are 

varied, but addressing them effectively requires an optimized management structure that is centrally 

situated, empowered to view the Federal workforce holistically, and free to focus on core strategic and 

policy concerns.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 52 CENTURY

THE OPPORTUNITY 

This proposal is an opportunity to elevate the Federal workforce management function and maximize 

the operational efficiency of human capital services. The civil service system is overdue for an overhaul, 

and that overhaul would best be implemented under a new management structure that is more focused 

on core priorities and that has not been molded around the existing, archaic framework of civil service 

rules and regulations. 

Once complete, a transition into the EOP could create a more streamlined personnel management unit 

that is less expensive to operate. Such a unit would also support centralized coordination of all personnel 

policies for Federal employees, eliminating the confusing matrix of who does what today, as well as several 

key gaps in policy that are inhibiting the streamlining of mission support services. Centralizing human 

capital operational services at the General Services Administration (GSA) should provide economies 

of scale and significant cost-avoidance based on reductions in contract and IT duplication as well as 

increased data sharing and availability. 

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Current OPM Structure 

OPM currently comprises seven major organizational units: Employee Services, Retirement Services, 

Healthcare & Insurance, Merit System Accountability & Compliance, Human Resources Solutions, Suitability 

Executive Agent, and the National Background Investigations Bureau. In general, current OPM activities 

and functions fall into two categories: human resources policy and compliance and human resources 

service delivery and implementation.

This proposal would elevate human resources policy functions into the EOP, and provide it with a wholeof-Government mandate that OPM currently lacks. 

To drive real reform, the Federal Government needs to elevate Federal workforce policy so that evidence 

and leading practice can drive strategic management of the workforce. In particular, reform requires an 

agency steadfastly committed to:

• A holistic view of the Federal workforce;

• Assessment of innovations and contextual changes that drive the future of work;

• Data-driven policy development;

• Data analytics and strategic workforce management;

• Agency policy advice and change management assistance; and

• Identification and advancement of leading practice throughout the Federal Government.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 53

Structure and Function of the EOP Office 

Today, Federal human resources policy is fragmented, making it difficult to assess Government-wide 

human capital challenges. This EOP office would centralize policy decisions in areas such as employee 

compensation; workforce supply and demand; identification of future workforce skill needs; leadership 

and talent management; and other important issues. The office would work to rationalize policies, 

procedures, and incentives across the Government, while minimizing unintended consequences. 

This new office would also modernize the approach to human resources policy, with a core focus on: 

strategy and innovation; workforce and mission achievement; senior talent and leadership management; 

and, total compensation and employee performance. Each of these units would be informed by data 

analytics and human resources standards. 

Achieving this vision will require realignment of OPM’s current functions, some of which would be 

transferred and realigned to a service delivery operational entity. The new entity would be formed from 

a combination of OPM’s operational/service units with the existing offices of GSA, to be reconstituted 

as the “Government Services Agency.” This combination would yield an organization with a focus on 

providing Government-wide services and solutions associated with the full Federal employee lifecycle. 

Immediately below is a summary of how current OPM functions could be realigned under this proposal. 

While the precise transition plan for all units has not been finalized, organizational units in the EOP 

office would subsume and expand upon the current OPM human capital policy-based activities under 

this proposal. At the end of this paper, there is an existing OPM organizational chart and a notional 

organizational chart for the office to be housed within the EOP.

Current OPM Organizational Units

Employee Services

Retirement Services

Healthcare & Insurance

National Background Investigations Bureau

Human Resources Solutions

Function Type

Policy

Employee Servicing

Agency Servicing

Agency Servicing

Agency Servicing

Receiving Agency

EOP Office

"Government Services Agency"

"Government Services Agency"

Department of Defense

"Government Services Agency"

 Note: The placement of other OPM offices and functions will be determined at a later date.

Transfer of Operational Functions to a Renamed Government Services Agency 

OPM’s current human resources service delivery and implementation functions would be transferred. 

A strong nexus would be retained, however, between these operational activities and the personnel 

management office to be housed in the EOP, which would be responsible for ensuring that human 

resources IT operations and services evolve in a manner consistent with changes in workforce policy.

Centralizing human resources operational functions in a single entity within the newly renamed 

Government Services Agency would integrate the transactional and employee-centric, service-based 

functions currently performed by OPM with existing GSA operations, including Federal employee payroll 

and travel. With end-to-end services around the Federal employee lifecycle maintained in one place, 

considerable operational efficiencies should be attained. Currently, these services are stove-piped, 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 54 CENTURY

forcing burdensome processes on managers and employees. It is worth noting that HR services are rated 

last among all mission support services by Federal managers. 

To achieve the vision outlined in this proposal, the consolidated service agency would house those 

functions currently performed by OPM’s Human Resources Solutions, and Healthcare & Insurance 

organizational units. It could also potentially carry out OPM’s responsibilities for retirement processing 

and servicing, but other entities, such as the Department of the Treasury, would also be considered.

As also discussed in this Volume, activities currently performed by the National Background Investigations 

Bureau would be consolidated with similar activities mandated to the Department of Defense.

Additional Analysis and Background

More than 80 percent of OPM’s funding and staff is dedicated to meeting the Agency’s service-based 

responsibilities. These include important functions, such as administering the Federal Employees 

Health Benefits Program for more than 8.2 million active Federal employees, retirees, and their families; 

administering the Civil Service Retirement System and the Federal Employees Retirement System for 

over 5.3 million active Federal employees, annuitants, and survivors; processing more than two million 

background investigations each year for over 100 Federal agencies; and managing USAJOBS, which 

receives over 85 million searches each month from 15 million site visitors. While these functions are 

vital, their scope and scale are such that they necessarily distract agency leadership’s attention from 

strategic human capital management and stewardship of an efficient civil service structure. OPM’s 

greatest visibility in recent years has stemmed from high profile challenges within these operational 

and service-based activities.

In 2014, a data breach into OPM’s systems exposed personally identifiable information for over 20 million 

individuals, including Federal employees and their families, job applicants, and contractors, creating one 

of the biggest national security threats in decades and requiring the Federal Government to pay for credit 

monitoring for 10 years. In 2007, OPM issued a stop work order marking its fourth consecutive failure 

to automate its retirement processing function. Since then, OPM has not attempted this effort again, 

and instead relies on manual reviews. From 2014 to today, OPM has increased prices on background 

investigations by more than 40 percent, and the timeline for processing background investigations has 

tripled, further straining agency budgets and the ability to fill critical positions. Currently, OPM is working 

to reduce an inventory that has grown to approximately 725,000 cases.

There is no significant benefit obtained from having these operational fee-based functions housed within 

the same agency that oversees the overarching policies. Further, it is in no way apparent that OPM has a 

comparative advantage relative to other Federal entities in the management of information technology or 

contractual services. Also, in selling human resources and IT products to those agencies whose personnel 

practices it monitors, OPM is in a position that can lend the appearance of a conflict of interest. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 55

Achieving the End-State Vision 

Achieving this vision may entail both legislation and administrative actions to transfer and/or delegate 

certain basic OPM functions, resources, and authorities. This includes moving peripheral functions to 

other agencies, and moving core policy units into the EOP. There would also be a change-management 

and capacity-building process, led by the Director of the Office of Management and Budget and the 

Director of OPM, to transform and elevate the organization. Fully and effectively achieving the end-state 

vision presented here would necessarily require a partnership with the Congress, including the granting 

of statutory authorities as necessary. 

Current OPM Structure
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 56 CENTURY
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 57

Consolidation of Federal Veterans Cemeteries

Department of Veterans Affairs

Summary of Proposal: This proposal would transfer responsibility for perpetual care and operation 

of select military and veterans cemeteries located on Department of Defense (DOD) installations to 

the Department of Veterans Affairs (VA) – National Cemetery Administration. This transfer would 

increase efficiency, limit mission overlap, and ensure that these cemeteries are maintained to national 

shrine standards to continue the recognition of service of those interred therein.

THE CHALLENGE 

Currently, mission overlap exists in the oversight and operations of Federal military and veterans cemeteries. 

Specifically, VA maintains and operates 135 national cemeteries and 33 cemeterial installations, DOD is 

responsible for approximately 43 cemeteries located on active and inactive installations, the Department 

of the Interior (DOI) is responsible for 14 situated within national parks, and the Department of Agriculture 

(USDA) is responsible for one. In most cases, this mission overlap is inconsequential as the responsible 

agency has adequate infrastructure and support in place at each location, making each a suitable 

caretaker. However, at some facilities responsible agencies no longer maintain an active presence, 

presenting unique challenges for efficient oversight and warranting reconsideration of the status quo. 

This proposal recognizes an opportunity to transfer responsibility for the operation and care of select 

post cemeteries, 10 of which are located on inactive facilities formerly occupied by the Department of the 

Army (Army) and one on a re-missioned open garrison (Fort Devens), to VA by leveraging the expertise and 

capabilities of the National Cemetery Administration (NCA). This consolidation will enable the Army to 

utilize Operations and Maintenance resources for other critical mission needs while reducing duplication 

of effort across Government. 

THE OPPORTUNITY

For several decades, DOD has maintained “post cemeteries” on inactive bases shuttered as a result of 

various closure and re-missioning decisions – specifically, 10 former active Army facilities. In these cases, 

lack of an active Army presence makes efficient operations and maintenance challenging. The National 

Cemetery Administration (NCA), established by the Congress in the National Cemeteries Act of 1973 

and one of the three administrations that make up VA, operates a large network of veterans cemeteries, 

making it better suited for this mission. In addition, one open garrison – Fort Devens, Massachusetts – has 

been re-missioned as an Army Reserve Forces Training Area and is included in this proposal. 

In addition to serving as the interface for the public in the delivery of VA burial benefits, NCA operates and 

maintains the network of national cemeteries to “national shrine” standards. These standards include 

headstone realignment, irrigation and grounds improvements, and other facility upgrades to improve 

accessibility and visitors’ experience. NCA’s performance is substantiated by consistently high customer 

satisfaction ratings from veterans, family members, and visitors.

Consolidation will alleviate duplicative mission requirements and entrust operational control to an 

agency with more expertise in running cemeteries. This will allow more burial options for veterans and 

dependents at some of the transferred cemeteries by taking advantage of NCA’s operational experience 

in maximizing the use of available space. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 58 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

VA, DOD, DOI, and USDA maintain approximately 226 Federal cemeteries where the remains of veterans 

and dependents from various eras and conflicts are interred. The NCA is responsible for 135 national 

cemeteries and 33 other cemeterial installations. 

The remaining 58 cemeteries fall under the collective responsibility of DOD, DOI, and USDA as listed 

below. Not listed are numerous other State and/or tribal veterans cemeteries. Further, this inventory 

does not include American Battle Monuments Commission installations as nearly all are overseas and 

currently maintained to guidelines commensurate with “national shrine” standards.

Department of the Army

(post cemeteries proposed 

for transfer)

• Vancouver Barracks Cemetery, WA

• Fort McClellan Post Cemetery, AL

• Fort McClellan Prisoner of War 

Cemetery, AL

• Fort Lawton Cemetery, WA

• Fort Douglas Cemetery, UT

• Fort Worden Cemetery, WA

• Fort Missoula Cemetery, MT

• Fort Stevens Cemetery, OR

• Benicia Post Cemetery, CA

• Fort Sheridan Cemetery, IL

• Fort Devens Cemetery, MA (active)

Department of the Army

• Arlington National Cemetery, VA

• U.S. Soldier’s and Airmen’s Home 

National Cemetery, Washington, DC

• Aberdeen Proving Ground, MD

• Fort Benning, GA

• Fort Bragg, NC

• Carlisle Barracks, PA

• Edgewood Arsenal, MD

• Fort Huachuca, AZ

• Fort Knox, KY

• Fort Leonard Wood, MO

• Joint Base Lewis-McChord, WA

• Fort Meade, MD

• Presidio of Monterey, CA

• Fort Riley, KS

• Fort Sill, OK

• U.S. Military Academy, NY

• Watervliet Arsenal, NY

• Fort Campbell POW Cemetery, KY

• Fort Drum POW Cemetery, NY

• Fort Gordon German POW Cemetery, GA

• Schofield Barracks, HI

Department of the 

Interior National Park 

Service

• Gettysburg, PA 

• Antietam, MD

• Battleground, VA

• Fredericksburg, VA

• Yorktown, VA

• Poplar Grove, VA

• Fort Donelson, TN

• Andrew Johnson, TN

• Stones River, TN

• Shiloh, TN

• Andersonville, GA

• Vicksburg, MS

• Chalmette, LA

• Custer, MT

Department of the Air Force

• Fort George Wright Cemetery, 

Fairchild Air Force Base, WA

• U.S. Air Force Academy, CO

• F.E. Warren AFB, WY

• Fort Crook/Offutt AFB Cemetery, NE

• Volk Field, Camp Douglas, WI

Department of the Navy

• Maine Memorial, FL

• Captain Ted Conaway Memorial Navy 

Cemetery, VA

• U.S. Naval Cemetery, Great Lakes 

Naval Base, IL

• Cuzco Beach Naval Cemetery, U.S. 

Naval Base Guantanamo Bay, Cuba

• U.S. Naval Academy, MD

Department of Agriculture

• Fort Reno Cemetery/POW Annex, OK
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 59

Transfer of the 11 cemeteries italicized above from Army to NCA makes progress towards several 

Administration priorities, including, but not limited to: reducing redundancies and mission duplication 

across Government; streamlining operations and achieving efficiencies; increasing access to burial 

options for veterans and eligible dependents; and, providing veterans with benefits they have earned 

in service to the Nation. 

This consolidation will constitute the largest transfer of cemeteries to VA since the National Cemeteries 

Act of 1973 (P.L. 93-43) established the system in place today. The proposal is limited to base cemeteries 

located on installations that no longer maintain an active personnel presence, as well as one re-missioned 

base (Fort Devens) where transfer would realize efficiencies. Although the effort is not conceived as a pilot, 

it will enable VA to develop and execute an implementation plan that could also inform future transfers. 

This proposal would not transfer cemeteries on other active DOD installations or those located within 

DOI national parks where support infrastructure and presence exists.

Transferring these facilities to NCA is the optimal good-government strategy, and is consistent with 

the National Cemeteries Act of 1973. NCA leads the way in providing a variety of world-class burial and 

memorial benefits for veterans and their families and has received the highest customer satisfaction 

rating among the public and private sector from the American Customer Satisfaction Index (ACSI) for six 

consecutive years. Upon transfer, these facilities will be maintained to the same high standards as other 

NCA cemeteries, which have garnered public praise. VA does anticipate that each of the 11 transferred 

cemeteries will need to undergo some minor infrastructure improvements (e.g., roads, irrigation and 

drainage, marker alignment, turf renovation, etc.).
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 60 CENTURY

Reorganizing Economic Statistical Agencies

Departments of Commerce and Labor

Summary of Proposal: The U.S. Statistical System is composed of 13 principal statistical agencies 

across the Federal Government. Three of these agencies—the U.S. Census Bureau (Census), the Bureau 

of Economic Analysis (BEA), and the Bureau of Labor Statistics (BLS)—account for 53 percent of the 

System’s annual budget of $2.26 billion, and share unique synergies in their collection of economic 

and demographic data and analysis of key national indicators. Reorganizing these agencies under 

the Department of Commerce (DOC) would increase cost-effectiveness and improve data quality, 

while simultaneously reducing respondent burden on businesses and the public.

THE CHALLENGE 

Census, BEA, and BLS are the three statistical agencies responsible for the vast majority of the economic 

and demographic statistics produced by the Federal Government. However, as separate agencies across 

multiple departments, current duplications in data collection efforts yield increased burdens on businesses 

and the public. For example, Census and BLS separately collect data on, and maintain different lists of, 

business establishments to support their statistical activities. Such duplication creates unnecessary 

burden on respondents, which only impedes the timely production and analysis of vital U.S. data that the 

public rely on to make everyday household, business, and policy decisions. Further, because these three 

agencies already work in close coordination with each other, their reorganization under one department 

would bring about efficiencies through the integration of not only data products, but staff services and 

IT systems, achieving cost savings while improving data quality and security. 

Reorganizing these agencies under the direction of DOC’s Undersecretary for Economic Affairs will provide 

the policy and management oversight necessary to coordinate and streamline the production of Federal 

economic statistics. To achieve this goal, planning would begin in 2019 with implementation in 2020, 

after the peak operations of the 2020 Decennial Census are complete.

THE OPPORTUNITY 

This proposal would support three key opportunities for improvement:

• Reorganizing Census, BEA, and BLS within DOC would reduce redundancy by utilizing shared

infrastructure – including modernized IT and human resource systems – resulting in more efficient

collection and production of national data.

• Integrating survey operations, such as survey sample designs and respondent lists, would reduce

respondent burdens for businesses and the public by decreasing redundant survey questions and

consolidating existing surveys.

• Reorganization could also improve data quality by streamlining the approaches used to measure

U.S. economic statistics, including capital investment, productivity, trade, and service industries.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 61

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Reorganizing Census, BEA, and BLS is logical because all three produce national-level economic and 

demographic indicators whose value extends far beyond the scope of their respective departments 

and programs. There is general agreement within the statistical community, the Administration, and 

among private stakeholders that consolidating these three agencies would reduce public burden and 

end duplicative practices, while simultaneously enabling a more coherent approach to developing the 

Nation’s principal statistics. Numerous presidential, congressional, and other studies have recommended 

consolidation and coordination. In addition, many other nations with high statistical capacity, including 

Canada, the U.K., Australia, and New Zealand, have a much greater degree of centralization of statistical 

functions than the United States. 

While there is a sound case for reorganization, the Administration acknowledges that there are 

risks. Maintaining trust in the accuracy, objectivity, reliability, and integrity of Census, BEA, and BLS 

products is essential to meeting the needs of a wide range of end users and other stakeholders. The 

reorganization will provide the opportunity to move to an open-source environment that will improve 

transparency and confidence in statistical products. Reorganizing these agencies under DOC’s Under 

Secretary for Economic Affairs provides the best opportunity to preserve the quality and integrity of 

these products while also creating the greatest opportunity to improve the efficiency of the agencies. 

The Under Secretary already leads oversight activities of both BEA and the Census Bureau on high 

priority management, budget, employment, and risk management issues; advises Government 

officials on economic policy; and participates in interagency policy councils. Folding BLS into DOC 

would only strengthen the Under Secretary’s ability to coordinate and integrate current work with 

the priorities and requirements of the Department and other Government entities. To mitigate any 

possibility of impacts to high priority programs, such as the decennial census, reorganization would 

not occur until late 2020, after nationwide field operations for the 2020 Census have been completed. 

The Administration will continue to study this proposal to ensure that a combined agency will not be 

less accountable or transparent to the American people than the current division of responsibility 

among multiple agencies.

Reorganization would focus on the following goals: achieving increases in operational efficiencies; 

reductions in respondent burden; enhancements in privacy protections; and improvements in data 

quality and availability. 

Achieving Increases in Operational Efficiencies 

The integration of data products and sharing of administrative services and IT systems could yield greater 

economies of scale, resulting in substantial increases in operational efficiencies. For example, BLS’s 

headquarters lease is ending in Fiscal Year 2022. Rather than develop and finalize independent plans 

for relocation, BLS will explore options with Census and BEA to leverage office space as well as unique 

assets necessary to complete their mission, such as lock-up production facilities. In addition, Census has 

invested heavily in its IT infrastructure ahead of the 2020 Census and intends to expand that investment 

to the rest of the Bureau following its completion. Starting to plan for consolidation now would allow 

Census to integrate the operational requirements of BLS and BEA so that the planned expansion of their 

infrastructure could address the needs of all three agencies. This would also provide the most costeffective opportunity to modernize older systems at BLS and BEA.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 62 CENTURY

Reductions in Respondent Burden

The potential to consolidate duplicative survey data collections and eliminate some collections and 

survey questions would produce tangible efficiencies for the public and the Federal Government. For 

example, BLS and Census currently conduct separate surveys on U.S. businesses and their activities, 

and because current law does not permit consolidation of the lists of business establishments, BLS and 

Census maintain separate lists of business establishments to support statistical activities. Consolidation 

of these agencies could allow for combining these surveys into a single data collection. Reorganizing 

these agencies within one department would also provide them with access to existing administrative 

data in a more efficient manner, which could lead to the elimination of certain collections while 

producing higher quality and more timely data. For example, current agreements between outside 

partners and Census, BEA, or BLS only permit the agency in the agreement to use the administrative 

data. Through a reorganization, the administrative data agreements with outside partners could be 

leveraged for use across a larger suite of programs and would reduce public burden and costs.

Enhancements in Privacy Protections

Privacy risks and concerns over the safeguard of information could also be optimally mitigated by 

consolidating these agencies. The proliferation of information about people and businesses online 

increases the risk of unintended respondent re-identification. Currently, BLS and Census each release 

numerous business data products, including data on employment and wages of industries and occupations, 

values of sales and inventories, and prices received by producers and paid by consumers, with each 

release adding incremental risk to this re-identification issue. Current law does not permit consolidation 

of the administrative source data used by each agency, and each set of data products provide unique 

functionality such that data users would be harmed by ceasing one of the products. Consolidating these 

products while maintaining the best features of both could reduce privacy risks while ensuring data users’ 

needs are still met. Further, housing these agencies at DOC would increase collaboration and allow each 

agency to seamlessly develop, apply, and promulgate disclosure avoidance techniques across the suite 

of statistical data products. 

Improvements in Data Quality and Availability 

Consolidation would also allow each of the three agencies to access the source data utilized by the 

agencies in constructing their statistics. This could result in improvements to existing products as 

well as the production of new statistical products. If all source data resided in a single Department 

more granular data would be made available for input into key economic indicators, and could improve 

the timeliness of their releases. For example, GDP estimates could see reductions to the size of GDP 

revisions, and the Producer Price Index – released by BLS using Census inputs – could incorporate more 

current data and economic patterns in its estimates. Reorganization would also allow for production 

of new statistical estimates that would have been difficult to produce before, such as fully integrated 

statistics on goods and services, trade, and inbound and outbound foreign direct investment.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 63

Consolidation of the Department of Energy’s

Applied Energy Offices and Mission Refocus

Department of Energy

Summary of Proposal: This proposal would consolidate the Department of Energy’s (DOE) applied 

energy programs into a new Office of Energy Innovation in order to maximize the benefits of energy 

research and development and to enable quicker adaptation to the Nation’s changing energy 

technology needs. It would also establish a parallel Office of Energy Resources and Economic 

Strategy, which would focus on strategic delivery of solutions that support U.S. energy dominance in 

access to resources and infrastructure. Finally, it would maintain the Office of Cybersecurity, Energy 

Security, and Emergency Response, which would protect energy infrastructure from increasingly 

sophisticated threats and ensure energy restoration following disasters. 

THE CHALLENGE 

DOE’s core applied energy research and development (R&D) offices are currently organized by major 

energy technology or primary energy source, such as nuclear, fossil, and renewables. This structure 

emphasizes siloed, fuel type-driven R&D that can hinder the development of integrated solutions, inhibit 

effective collaboration, and impede the best possible research outcomes. DOE’s current, entrenched 

applied energy program organizational structure parallels the stakeholder community, and thus the 

programs can be influenced by the strongly held beliefs of the technology and fuel champions of their 

respective areas, which have biases that are often counter to identifying solutions that are good for the 

Nation as a whole. 

DOE also maintains a separate program called the Advanced Research Projects Agency-Energy (ARPA-E) 

that conducts applied research. While the program features positive aspects, such as coordination with 

industry and cross-cutting research, it makes little strategic sense that this entity exists independent of 

DOE’s main applied research programs. Achieving energy dominance requires an integrated national 

energy strategy and scarce resources must be directed to address national concerns.

This proposal would consolidate DOE’s applied energy research programs into a single Office of Energy 

Innovation that would take a holistic view of energy innovation to ensure Federal research keeps pace 

with the changing needs of the Nation’s energy system while maximizing the value to the taxpayer. In 

parallel, an Office of Energy Resources and Economic Strategy would be established to capture the 

Department’s expertise in monitoring, analyzing, and administering the Nation’s physical energy assets 

and the Office of Cybersecurity, Energy Security, and Emergency Response established in 2018 would be 

maintained to address emerging threats to U.S. energy security from cyber, natural, or other sources.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 64 CENTURY

THE OPPORTUNITY

Organizing applied energy research under one unified office has the potential to reduce a practice of 

picking energy technology winners and losers and pitting fuel types against one another for Government 

funding and attention. Breaking down the rooted R&D silos could enable greater flexibility and efficiency 

in decision-making and enhance the Department’s ability to set and achieve big goals. Revitalizing DOE’s 

applied energy R&D in this manner also provides the opportunity to integrate the positive attributes 

of ARPA-E into DOE’s core energy research rather than it being a wholly independent program. Many 

fields of research, such as materials, energy storage, and the overall enhancement of the grid’s stability 

and baseload capabilities, span today’s applied energy offices and would especially benefit from a fuel 

and technology-neutral program structure. With a unified Office of Energy Innovation, applied energy 

research could be directed to achieving nationally significant outcomes and breakthroughs, rather 

than incremental changes for individual fuel types that may have limited if any strategic connection 

to one another. 

In addition, maintaining the Office of Cybersecurity, Energy Security, and Emergency Response and 

establishing the Office of Energy Resources and Economic Strategy in parallel with the new Office of 

Energy Innovation ensures that key missions of the Department are adequately addressed and prioritized.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Under this proposal, DOE would create a single Office of Energy Innovation to tackle all applied R&D to 

further the Nation’s energy dominance. The merger would include both the operational components and 

programmatic R&D activities of each applied energy office to maximize savings. The new office would 

emphasize sector and system-level outcomes and ensure a robust, systemic focus on early-stage R&D, 

where the Federal role is strongest. The proposal would also integrate into the blended organization 

some positive elements of the ARPA-E model, such as coordination with industry and ability to incorporate 

cross-cutting research into program outcomes.

To minimize the potential for simply creating new silos with different foci and to move away from the 

risk-averse tendencies of the long-standing programs, the new office would include an energy technology 

and fuel source-agnostic front-end program that invests in revolutionizing energy concepts, materials, 

and processes, as well as incremental improvements in existing technologies across energy sectors. 

It would also incorporate a mechanism to translate results to either longer-term integrated R&D programs 

within DOE or to the private sector. Projects could be initially short-term with defined milestones and 

priority could be given to crosscutting technologies or solutions that demonstrate a multi-dimensional 

approach or that otherwise maximize public benefit.

Rather than presupposing the fraction of the budget necessary for certain energy technologies or 

sources, the office would undertake a broader review of energy system needs and opportunities. 

All R&D would be required to compete for resources in the new environment, which would drive the 

best projects to the top of the list for limited resources, weeding out activities that are less efficient, 

duplicative, and do not adequately consider the crosscutting and diverse nature of the Nation’s energy 

requirements.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 65

By elevating R&D decision-making to a system-wide, cross-sector level and implementing multi-disciplinary, 

multi-dimensional R&D programs, this proposal would not only make effective use of Federal funding 

but would also facilitate new technological advancements, some of which potentially would never be 

envisioned or achieved in a siloed environment. 

By establishing a parallel Office of Energy Resources and Economic Strategy, the Department’s expertise 

in monitoring, analyzing, and administering the Nation’s physical energy assets capacity can be enhanced 

and streamlined to more effectively enable energy dominance. Through improved oversight and solution 

development for both the physical and market aspects of the nation’s energy system, this office would 

promote multi-dimensional decision-making to better support resiliency, infrastructure improvement, 

and economic growth. Further, we cannot ignore emerging threats to U.S. energy security whether it 

be from cyber, natural, or other sources. To address this important issue, DOE established the Office of 

Cybersecurity, Energy Security, and Emergency Response (CESER) in 2018. In this proposal, CESER would 

be maintained to address this critical mission. While separate offices, both ERES and CESER would be tied 

to the Office of Energy Innovation and the three would work synergistically to achieve the system-wide, 

interdisciplinary vision and strategy.

This proposal seeks to take the action needed to break down existing stovepipes in the applied energy 

landscape and reap the benefits of that fundamental change, while protecting and enhancing other key 

energy mission priorities within the Department. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 66 CENTURY

Divesting Federal Transmission Assets

Department of Energy and Tennessee Valley Authority

Summary of Proposal: This proposal would sell the transmission assets owned and operated 

by the Tennessee Valley Authority (TVA) and the Power Marketing Administrations (PMAs) within 

the Department of Energy, including those of Southwestern Power Administration, Western Area 

Power Administration, and Bonneville Power Administration. Eliminating or reducing the Federal 

Government’s role in owning and operating transmission assets, and increasing the private sector’s 

role, would encourage a more efficient allocation of economic resources and mitigate unnecessary 

risk to taxpayers. 

1 Quadrennial Energy Review, “Transforming the Nation’s Electricity System: The Second Installment of the QER,” 

January 2017, p. A-34.

2 See, for example, Congressional Budget Office study, “Should the Federal Government Sell Electricity?” November 

1997, p. 13.

THE CHALLENGE 

The Federal Government owns, operates, and maintains over 50,000 miles of electricity transmission 

lines and related assets (substations, switchyards, etc.). The Federal Government’s role in owning and 

operating transmission assets creates unnecessary risk for taxpayers and distorts private markets that 

are better equipped to carry-out this function.

The vast majority of the Nation’s electricity needs are met through for-profit investor-owned utilities. 

Ownership of transmission assets is best carried out by the private sector, where there are appropriate 

market and regulatory incentives. 

THE OPPORTUNITY 

Reducing or eliminating the Federal Government’s role in transmission infrastructure ownership would 

encourage a more efficient allocation of economic resources and mitigates risk to taxpayers.

The Fiscal Year (FY) 2019 Budget estimates that selling Federal transmission assets would result in net 

budgetary savings of $9.5 billion, in total, over the 10-year window.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Federal transmission assets account for roughly 14 percent of the Nation’s transmission lines.1 Collectively, 

TVA, Southwestern Power Administration, Western Area Power Administration, and Bonneville Power 

Administration own, operate, and maintain over 50,000 miles of transmission lines and related assets. 

By contrast, the vast majority of the Nation’s electricity needs are met through for-profit investor owned 

utilities. The Federal Government’s role in electricity production and marketing dates largely to the 

New Deal. Since then, the Federal Government has expanded its involvement to include owning and 

operating electric transmission assets. Today, a strong justification no longer exists for the Federal 

Government to own and operate these systems.2

 The private sector already meets the vast majority of 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 67

the Nation’s electricity needs. Private ownership of transmission assets could result in more efficient 

operations and capital improvements while reducing the subsidies (both implicit and explicit) that the 

Federal Government now provides to the respective regions’ ratepayers. 

Federal transmission infrastructure assets (lines, towers, substations, and/or right of ways) could be 

broken off from the generation assets and sold separately, and the private sector and/or State and local 

entities could carry out the transmission functions now provided by TVA and the PMAs. The Federal 

entities that would result after such sales could contract with other utilities to provide transmission 

service for the delivery of Federal power just as the Southeastern Power Administration, which does not 

own transmission lines, already does.

The private sector is best suited to own and operate electricity transmission assets. Private ownership 

of Federal transmission assets could result in more efficient operation, greater innovation, stronger 

regulatory oversight, and direct and/or greater access to private capital markets. Further, selling these 

transmission assets could encourage market efficiency resulting from competition and impose market 

discipline resulting from both shareholder and greater regulatory scrutiny. The sale of Federal transmission 

assets would result in more efficient allocation of economic resources and help relieve long-term pressures 

on the Federal deficit related to future Federal capital investment and spending on transmission. 

Prior administrations also have recognized the policy merits of divestiture and have proposed to privatize 

the Federal electricity infrastructure a number of times. For example, in the FY 1987 Budget, President 

Reagan proposed privatizing the PMAs, stating, “Utilities are not normally a Federal responsibility.” In the 

FY 1996 Budget, President Clinton also proposed to sell four out of five existing PMAs, and successfully sold 

the Alaska Power Administration in 1996. In the FY 2014 Budget, the Obama Administration announced 

it was undertaking a strategic review of options for addressing financial challenges at TVA, including a 

possible divestiture of TVA, in part or as a whole.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 68 CENTURY

Restructure the Postal Service

United States Postal Service

Summary of Proposal: This proposal would restructure the United States Postal System to return 

it to a sustainable business model or prepare it for future conversion from a Government agency 

into a privately-held corporation. Like many European nations, the United States could privatize 

its postal operator while maintaining strong regulatory oversight to ensure fair competition and 

reasonable prices for customers. The President’s Task Force on the United States Postal System 

will make recommendations on reforms towards this goal in August 2018.

THE CHALLENGE 

When the United States Postal Service (USPS) was created out of the Post Office Department in 1970, the 

Congress tasked it with binding the Nation together through correspondence; half a century later, that role 

has been increasingly supplanted by less expensive digital alternatives. USPS has extremely high fixed 

costs as a result of relatively generous employee benefits combined with a universal service obligation that 

is understood to require mail carriers to visit over 150 million addresses six days per week. Historically, 

this level of service was supported by a high volume of mail. Despite significant decline in volume in the 

internet age, the size of the delivery network has continued to grow to meet expectations of the current 

operating structure. USPS can no longer support the obligations created by its enormous infrastructure 

and personnel requirements. USPS already has over $100 billion in unfunded liabilities, a substantial 

capital investment backlog, has posted losses for over a decade, and has no clear path to profitability 

without reform. A new model that adequately finances USPS while meeting the needs of rural and urban 

communities, large mailers, and small businesses is needed.

THE OPPORTUNITY 

A privatized Postal Service would have a substantially lower cost structure, be able to adapt to changing 

customer needs and make business decisions free from political interference, and have access to private 

capital markets to fund operational improvements without burdening taxpayers. The private operation 

would be incentivized to innovate and improve services to Americans in every community.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

This proposal would restructure USPS by aligning revenues and expenses to restore a sustainable business 

model and possibly prepare it for future conversion from a Government agency into a privately-held 

corporation. Like many European nations, the United States could privatize its postal operator while 

maintaining strong regulatory oversight to ensure fair competition and reasonable prices for customers. 

A private Postal Service with independence from congressional mandates could more flexibly manage 

the decline of First-Class mail while continuing to provide needed services to American communities.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 69

Profitability and Privatization: Considerations for the Future of USPS

1

 UK National Audit Office, The Privatisation of Royal Mail, April 2014, Pg. 16: https://www.nao.org.uk/report/

privatisation-of-royal-mail-plc/

2

 2017 Report on Form 10-K United States Postal Service, Balance Sheet, CSRS and FERS Unfunded Retirement 

Benefits, and PSRHBF Funded Status

In 2017, USPS experienced faster than expected declines in both First-Class Mail and Marketing Mail. First-Class 

Mail has declined 40 percent since 2001. Marketing mail is more stable, down only 10 percent since 

2001, but is incredibly sensitive to price and market downturns. At the same time, USPS has continued 

to grow its package delivery business, particularly the last-mile delivery that is relatively cheaper for 

them because of the huge fixed network they must maintain to support mail delivery. However, the 

revenues from lower-margin package delivery and other competitive products cannot replace declining 

revenue from the market-dominant (monopoly) products in the long-run. This year, USPS continued 

its six-year string of defaults and for the first time defaulted on pension-related payments rather than 

just health benefit prepayments. USPS’s current model is unsustainable. Major changes are needed in 

how the Postal Service is financed and the level of service Americans should expect from their universal 

service operator. 

One successful model of Postal reform internationally has been to transition to a model of private 

management and private or shared ownership. USPS is caught between a mandate to operate like 

a business but with the expenses and political oversight of a public agency. A private postal operator 

that delivers mail fewer days per week and to more central locations (not door delivery) would operate 

at substantially lower costs. A private entity would also have greater ability to adjust product pricing 

in response to changes in demand or operating costs. Freeing USPS to more fully negotiate pay and 

benefits rather than prescribing participation in costly Federal personnel benefit programs, and allowing 

it to follow private sector practices in compensation and labor relations, could further reduce costs. 

A privatized Postal Service could be structured like an investor-owned utility and continue to be regulated 

by the Postal Regulatory Commission (PRC), a successor agency, or another Federal regulator such as 

the Federal Trade Commission, consistent with the existing models of privatization in Europe. Even with 

continued regulation, a privatized Postal Service would be more insulated from politics and more likely 

to succeed as a financially-viable business. A private entity would also have access to private capital 

markets to raise money for needed improvements like new vehicles without burdening taxpayers with 

additional liabilities. 

USPS privatization through an initial public offering (IPO) or sale to another entity would require the 

implementation of significant reforms prior to sale to show a possible path to profitability. Most foreign 

posts that have been privatized have been profitable at the time of the sale. In contrast, USPS has lost over 

$65 billion since the last recession and recorded a $2.7 billion loss last fiscal year. To reach profitability, 

most international postal operations have gone through significant restructuring, including shrinking 

their physical and personnel footprints. In some cases, foreign governments have had to absorb legacy 

retirement liabilities1

 in order to prepare a postal operator for sale. The existing unfunded liabilities 

in USPS’s retirement programs total more than $100 billion. USPS owes an additional $15 billion to 

Treasury’s Federal Financing Bank and has further liabilities to the Department of Labor’s Workers 

Compensation program. According to the Postal Service’s own estimates, the Agency is insolvent, with 

liabilities exceeding assets by more than $120 billion.2
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 70 CENTURY

Forthcoming Recommendations by the Task Force on the United States Postal System

To address these major issues and identify solutions, possibly including private ownership, the President has 

issued Executive Order 13829: Task Force on the United States Postal System. The Task Force will conduct 

a thorough evaluation of the operations and finances of the Postal Service and make recommendations 

for reform consistent with this reorganization proposal. The Task Force will examine:

1. The expansion and pricing of the package delivery market and the USPS’s role in competitive 

markets;

2. The decline in mail volume and its implications for USPS self-financing and the USPS monopoly 

over letter delivery and mailboxes;

3. The definition of the ‘‘universal service obligation’’ in light of changes in technology, e-commerce, 

marketing practices, and customer needs;

4. The USPS role in the U.S. economy and in rural areas, communities, and small towns; and

5. The state of the USPS business model, workforce, operations, costs, and pricing.

The recommendations will include administrative and legislative reforms to the United States postal 

system that promote our Nation’s commerce and communication without shifting additional costs to 

taxpayers. The report will be available by August 10, 2018.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 71

DOT Mission Adjustments

Department of Transportation

Summary of Proposal: This proposal would reorganize the Department of Transportation (DOT) to 

better align the agency’s core missions and programmatic responsibilities, reduce transportation 

program fragmentation across the Government, and improve outcomes. The proposal would spin-off

Federal responsibility for operating air traffic control services and locks along the Saint Lawrence 

Seaway, integrate into DOT certain coastal and inland waterways commercial navigation activities 

and transportation security programs, and reassess the structure and responsibilities of DOT’s 

Office of the Secretary.

THE CHALLENGE 

While DOT is not in need of wholesale reorganization, the Department does administer several programs 

that do not fit neatly within its core missions of financial assistance and safety oversight. The most 

significant misalignment is where DOT still has operational responsibilities, principally the Federal 

Aviation Administration’s (FAA) air traffic control services, and to a much smaller degree, the Saint 

Lawrence Seaway. DOT also administers two defense-related sealift programs that are outside of its 

core missions. In addition, there is unnecessary fragmentation in transportation programs across the 

Executive Branch. For example, the U.S. Army Corps of Engineers (Corps) is responsible for coastal and 

inland waterways navigation, while the Department of Homeland Security (DHS) manages certain surface 

transportation security programs.

This proposal addresses these challenges. The proposal would spin off FAA’s air traffic control services 

and the Saint Lawrence Seaway from the Government; transfer to DOT responsibilities for coastal and 

inland waterways navigation from the Corps; and integrate into DOT certain DHS programs related to 

surface transportation security, including transit security grants.

THE OPPORTUNITY 

Spinning-off Federal responsibility for air traffic control services to a non-profit entity would better 

enable our aviation system to respond to consumer needs and modernize services. Having DOT take over 

responsibility for coastal and inland waterway navigational development would take advantage of DOT’s 

strengths in infrastructure finance and would make DOT’s maritime responsibilities analogous to DOT’s 

role in other transportation sectors. Shifting commercial navigation to DOT would also create long-term 

opportunities to adjust ownership and financial relationships between the States and the Federal 

Government, resulting in more efficient project delivery outcomes. Consolidating within DOT surface 

transportation security programs would streamline the Federal Government’s interaction with surface 

transportation agencies and operators, clarify the Federal Government’s role in surface transportation, 

consolidate planning and grant processes for both safety and security investments, and facilitate more 

effective Federal inspections and interactions with relevant surface transportation agencies and operators.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 72 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

DOT, created in 1967, has one of the largest discretionary budgets (in terms of outlays) of any 

domestic Cabinet-level agency. It has a decentralized management structure in which the Office of 

the Secretary of Transportation (OST) coordinates the programs, regulatory activity, and research 

and development of nine operating administrations, or “modes.” In 2017, the Department had total 

budgetary resources of $78 billion and employed 54,676 full time equivalents. DOT’s modes generally 

focus on three primary missions:

1. Financial Assistance. Approximately 70 percent of DOT obligations in any given year are in the form 

of grants to States and localities, primarily for highway, transit, and airport infrastructure, though 

DOT has smaller grant programs for passenger rail and multi-modal projects (e.g., BUILD grants). 

2. Safety Regulation. DOT ensures the safety of the aviation system (including aircraft, air traffic 

control, and emerging technology, such as drones or commercial space), motor vehicles, motor 

carriers, railroads, transit systems, pipelines, and the movement of hazardous materials. 

3. Operations. Air traffic control operations constitute the single largest operational budget item, and 

also comprise a majority of DOT’s workforce. DOT also operates a lock on the Saint Lawrence Seaway.

This proposal recognizes that most of DOT’s activities are oriented around financial assistance to States 

and localities and safety oversight, that there are several programs within DOT that do not align with 

those two focus areas, and that several programs outside of DOT should be merged into the Department. 

Air Traffic Control and Saint Lawrence Seaway

The most significant misalignment is in areas where DOT operates transportation systems, principally 

the FAA’s air traffic control services, and to a much smaller degree, the Saint Lawrence Seaway. Both 

of those components could be spun off from the Government, which would allow them to have better 

governance structures and insolation from the political system, and allow them to better assess fees 

based on actual usage of their systems. Spinning FAA air traffic control services out of the Government, 

to a non-profit entity, similar to the Canadian system, has strong policy merits, evidenced by the 

approximately 60 countries that have shifted air traffic control responsibilities to non-governmental 

providers. 

Maritime Consolidation 

Unlike all other modes of transportation, DOT has a very limited role in the Nation’s commercial maritime 

systems. The Maritime Administration (MARAD) is DOT’s operating administration engaged in the promotion 

of the U.S. maritime sector, yet its mission is dominated by educating cadets at the U.S. Merchant Marine 

Academy and carrying out two defense-related programs designed to meet the Department of Defense’s 

military sealift needs in a time of crisis. In contrast to DOT’s other operating administrations, MARAD has no 

safety regulatory function and limited financial assistance activities, which leaves DOT under-represented 

in commercial maritime issues. 

There are opportunities to add to DOT’s responsibilities for coastal ports, inland waterways, and navigation 

permitting activities. Under this proposal, responsibility for coastal port dredging and operation of the 

inland waterway system, currently carried out by the Corps, would be shifted to DOT, which already 

has some limited expertise in the port and inland waterway sectors. Shifting these programs to DOT 

would also be an opportunity to reassess the type of Federal involvement in both sectors. Given DOT’s 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 73

extensive experience in providing financial assistance to major infrastructure projects, a new model of 

Federal financial assistance to ports may be a more efficient project delivery mechanism than direct 

Federal control, construction, and ongoing maintenance. A similar financial assistance model could be 

applied to the inland waterway system, though some portions may require continued Federal ownership, 

control and operation. In addition, transferring current U.S. Coast Guard responsibilities for permitting 

alterations to bridges and aids to coastal navigation to DOT would better align those functions with 

similar functions already carried out by DOT’s.

Surface Transportation Security 

DHS has two security-related surface transportation functions that would be transferred to DOT under 

this proposal: transit security grants currently administered by the Federal Emergency Management 

Agency (FEMA) and Transportation Security Administration (TSA) surface transportation inspection and 

guidance activities. 

FEMA currently provides security grants to transit and rail operators. The Federal Transit Administration, 

which manages much larger financial assistance programs aimed at these same agencies and operators, 

could integrate FEMA’s programs into its existing industry relationship. In fact, security and emergency 

preparedness are already eligible expenses in FTA’s programs, highlighting the duplicative nature 

of the separate FEMA grants. Consolidating all transit and rail grant funding within DOT would eliminate 

confusion among transit agencies about which agency funds their emergent needs.

More generally, DOT has a strong focus on the safety of our Nation’s transportation networks, while 

DHS is responsible for the security of those assets. However, both agencies have programs for the same 

non-Federal agencies, operators, and companies that own and manage surface transportation assets. 

Furthermore, the Federal Government traditionally provides guidance, financial assistance, technical 

assistance, and in certain cases, oversight and regulation for the surface transportation sector. The 

Federal Government has no operational role in managing or securing surface transportation assets, nor 

should it. That is clear in DOT’s mission and history, however since its creation TSA has been pressured 

to expand its operational programs for surface transportation. Despite the compelling case for Federal 

aviation security operations, establishing a corresponding Federal role in surface transportation would 

be duplicative of non-Federal efforts, cost-prohibitive, and impractical to manage. 

Currently, TSA has a small component ($129 million enacted in Fiscal Year (FY) 2018) dedicated to 

assessing threats to surface transportation facilities, encouraging security planning and threat reporting, 

overseeing compliance with certain rail security regulations, and disseminating best-practice guidance 

to transportation companies and government agencies. Under this proposal, TSA’s surface-related 

programs would be incorporated into DOT, which interfaces directly and regularly on safety matters, 

ensuring that both safety and security are addressed appropriately. While DHS receives useful intelligence 

reporting from current TSA programs and outreach, many other Sector Specific Agencies who lead the 

collaborative process for other critical infrastructure security have shown they can collaborate to share 

intelligence as effectively as a DHS component. As part of this proposal, the Administration will ensure 

any reorganization does not degrade security.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 74 CENTURY

OST Organizational Structure 

OST has traditionally focused on formulating national transportation policy and overseeing and supporting 

the Department’s operating administrations. More recently, however, the scope of activities performed 

by OST has broadened significantly. Now, OST has programmatic responsibilities that have traditionally 

been carried out by operating administrations. For example, OST houses the Build America Bureau, 

which, among other responsibilities, administers transportation credit programs, awards INFRA grants, 

allocates private activity bonds, and communicates best practices and funding opportunities to project 

sponsors. OST also administers the BUILD grant program, which received a large increase in funds in 

the agency’s FY 2018 appropriation. 

Executing these programmatic responsibilities while simultaneously performing its more traditional oversight 

and management functions has been challenging and has stressed OST’s organizational structure. Now that 

OST has performed these dual roles for several years, it is time to consider whether OST’s organizational 

design is optimal for allowing it to most effectively carry out its statutory responsibilities. This proposal 

would include an assessment by the Administration and the Department of OST’s organizational structure 

and programmatic responsibilities, including potential alternative structures.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 75

Reform Federal Role in Mortgage Finance1

Summary of Proposal: This proposal would transform the way the Federal Government delivers 

support for the U.S. housing finance system to ensure more transparency and accountability to 

taxpayers, and to minimize the risk of taxpayer-funded bailouts, while maintaining responsible 

and sustainable support for homeowners. Proposed changes, which would require broader policy 

and legislative reforms beyond restructuring Federal agencies and programs, include ending the 

conservatorship of Fannie Mae and Freddie Mac, reducing their role in the housing market, and 

providing an explicit, limited Federal backstop that is on-budget and apart from the Federal support 

for low- and moderate-income homebuyers.

1 In order to propose changes in the Federal Government’s role in housing finance, this proposal outlines policies 

related to the privately-owned GSEs and ending their conservatorship. Nothing in this paper should be construed 

as implying that the GSEs are agencies or instrumentalities of the Government nor that FHFA as conservator is 

operating as an agency of the United States.

THE CHALLENGE

The U.S. housing market is supported by a complex system of Federal subsidies and programs intended 

to make mortgage financing accessible to a wide range of homebuyers. However, this system is 

challenged by the operation of two privately-owned Government sponsored-enterprises (GSEs), Fannie 

Mae and Freddie Mac, in conservatorship, a condition that has been maintained since 2008, in addition 

to overlapping and sometimes conflicting Federal goals. The Federal role in support of housing finance 

is not effectively targeted to households in need of assistance or sufficiently accountable to taxpayers, 

as the costs and benefits of that support are unclear.

In response, this proposal would end the conservatorship of Fannie Mae and Freddie Mac and propose 

better tailoring of delivery of Federal programs. Policy makers should also pursue an approach that 

would level the playing field with the private sector to decrease the Federal subsidies supporting housing.

THE OPPORTUNITY

This proposal would reorganize the way the Federal Government delivers mortgage assistance and 

go beyond restructuring Federal agencies and programs by transitioning Fannie Mae and Freddie Mac 

to fully private entities. Competition to the duopolistic role played by the two privately-owned GSEs 

would be an essential element of reform to decrease moral hazard and risk to the taxpayer. Both 

Fannie Mae and Freddie Mac, as well as other competitive entrants, would have access to an explicit 

Federal guarantee for mortgage-backed securities (MBS) that they issue that is only exposed in limited, 

exigent circumstances. Such a guarantee would be on-budget and fully paid-for. This would also 

ensure that the Government’s role is more transparent and accountable to taxpayers, minimize the 

risk of taxpayer-funded bailouts, and ensure that mortgage credit continues to be available in times 

of market stress for creditworthy borrowers.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 76 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Under the current system, Fannie Mae and Freddie Mac, two privately-owned GSEs, buy and guarantee 

mortgages from lenders and sell them to investors as MBS. Although they are private companies, they 

are congressionally chartered, a unique status that has been viewed as conveying an implicit Federal 

backstop that has in turn lowered their cost of capital relative to similarly-sized institutions. In 2008, 

Fannie Mae and Freddie Mac were taken into conservatorship and received (and continue to receive) an 

explicit but limited backing from the Treasury under a Preferred Stock Purchase Agreement (PSPA), which 

gives access to capital funding that covers any loss the enterprises may incur. In their Federal charters and 

by action of their primary regulator, the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie 

Mac have goals of providing a certain amount of financing to low- and moderate-income borrowers. 

However, these affordable housing activities are not clearly accounted for on the Federal balance sheet. 

In addition to the GSEs, other Federal programs provide mortgage support, contributing to a large Federal 

footprint in the housing market. The Department of Housing and Urban Development (HUD) Federal 

Housing Administration (FHA) provides mortgage insurance intended to aid borrowers traditionally 

underserved by the conventional mortgage market, including lower-wealth households, minorities, and 

first-time homebuyers. The Departments of Veterans Affairs (VA) and Agriculture (USDA) also administer 

mortgage insurance programs targeted to veterans and lower-income rural households, respectively. 

The loans guaranteed by FHA, VA, and USDA are in turn packaged into MBS that are guaranteed by Ginnie 

Mae, a Federal entity operated by HUD. Together, loans backed by the GSEs and Ginnie Mae comprised 

about 70 percent of mortgages originated in 2017. 

All these entities, taken as a whole, form a complex and overlapping network of cross-subsidization, 

without clear accountability as to who is paying for, and who is receiving, housing subsidies. Although 

the Federal role in the housing market has helped to facilitate the availability of the 30-year fixed-rate 

mortgage, the current system has structural flaws that have also created distortions in home pricing that 

may actually hinder the goal of homeownership. This reorganization proposal, which includes broad 

policy and legislative reforms beyond restructuring Federal agencies and programs, would: 

• Increase competition. The proposal would remove the Federal charter from statute and fully 

privatize the GSEs. A Federal entity with secondary mortgage market experience would be charged 

with regulatory oversight of the fully privatized GSEs, have the authority to approve guarantors, 

and develop a regulatory environment that is conducive to developing competition amongst new 

private guarantors and the incumbent GSEs, ensuring they would all be adequately capitalized 

and competing on a level playing field. If the GSEs lost some of the benefits that have led them to 

dominate the market, this would enable other private companies to begin competing in this space. 

The regulator would also ensure fair access to the secondary market for all market participants, 

including community financial institutions and small lenders. 

• Increase transparency and accountability. Under this proposal, which would also involve entities 

outside the Executive Branch of the Federal Government, guarantors would have access to an 

explicit guarantee on the MBS that they issue that is only exposed in limited, exigent circumstances. 

Taxpayers would be protected by virtue of the capital requirements imposed on the guarantors, 

maintenance of responsible loan underwriting standards, and other protections deemed appropriate 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 77

by their primary regulator. The regulator would set fees to create an insurance fund designed to take 

effect only after substantial losses are incurred by the private market, including the guarantors, in 

order to ensure the continued availability of mortgage financing through shifting economic cycles. 

The projected cost of this guarantee and other fees charged would be on-budget and accountable, 

resulting in reduced implicit taxpayer exposure. 

• Align incentives and reduce overlap. Under this reform proposal, which would also require legislative 

and policy changes affecting the mandates of entities that are not part of the United States Government, 

the GSEs would focus on secondary market liquidity for mortgage loans to qualified borrowers, while 

HUD would assume primary responsibility for affordable housing objectives by providing support 

to low- and moderate-income families that cannot be fulfilled through traditional underwriting 

and other housing assistance grants and subsidies. To effectuate this, the newly fully-privatized 

GSEs would have mandates focused on defining the appropriate lending markets served in order to 

level the playing field with the private sector and avoid unnecessary cross-subsidization. A separate 

fee on the outstanding volume of the MBS issued by guarantors would be used specifically for 

affordable housing purposes, and would be transferred through congressional appropriations to, 

and administered by, HUD.

• Provide more targeted assistance to those in need. The proposal would be designed so that the 

affordable housing fees transferred to HUD would enable FHA to provide more targeted subsidies 

to low- and moderate-income homebuyers while maintaining responsible and sustainable support 

for homeownership and wealth-building. Some of the fees could potentially be used to support 

affordable multifamily housing or other HUD activities. All of this support would be on-budget 

and accountable.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 78 CENTURY

Create the Bureau of Economic Growth

Department of Commerce

Summary of Proposal: This proposal rethinks how the Federal Government can drive economic 

growth in concert with private sector investments in communities across the country. By coordinating 

and consolidating Federal economic assistance resources at the Department of Commerce (DOC), 

taxpayer dollars will receive a higher return on investment on projects that are transparent and 

accountable.

THE CHALLENGE 

Federal economic assistance programs that serve States, localities, and Tribes are broadly dispersed among 

Federal agencies with different purposes, eligibility criteria, time horizons, and reporting requirements. 

As a result, communities must navigate a complicated web of rules and regulations to determine which 

programs they might be eligible for, comply with different application requirements on a variety of 

timelines, and report on performance measures that differ in definition and reporting periods.

Consolidating these programs within DOC provides an opportunity to streamline and consolidate 

standards and processes for eligibility and participation, including planning and reporting requirements.

THE OPPORTUNITY 

This proposal establishes a Bureau of Economic Growth in DOC, consolidating existing economic 

development programs to provide a central place for grants and technical assistance to communities 

and entrepreneurs focused on job creation, business growth, and strengthening local economies. 

The new Bureau will better support and empower State, local, and tribal governments to spur their 

economies through locally planned development projects. The streamlined Bureau will also increase 

transparency in regional and local Federal spending, as well as encourage and facilitate complementary 

private-sector spending.

Some of the programs that will be consolidated include the Department of Housing and Urban Development’s 

Community Development Block Grant program, the Economic Development Administration’s Economic 

Development Assistance Programs, and rural business and community facility grants from the Department 

of Agriculture. As part of the Bureau’s focus on creating job opportunities and supporting the local business 

community, it would absorb the economic development functions of the Delta Regional Authority, Denali 

Commission, and Northern Border Regional Commission. The new Bureau would also oversee technical 

assistance programs. These programs provide training, planning, and other business development 

assistance to help businesses succeed no matter where they are in their lifecycle, whether they are just 

starting out, looking to expand, or trying to access new domestic and international markets.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 79

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

1 Government Accountability Office, “Action Tracker: Economic Development: Economic Development Programs,” 

https://www.gao.gov/duplication/action_tracker/Economic_Development_Programs/action1#t=3.

The Federal Government can play an important role in bolstering economic growth, with its ability to 

undertake large-scale economic development projects and holistically analyze their impacts. It is uniquely 

positioned to help mitigate market failures, and can leverage resources in distressed communities 

when local/regional entities cannot. Unfortunately, the current Federal economic development model 

is fragmented, resulting in fractured regulatory requirements and jurisdictions, overlapping programs, 

redundancy, and waste.1 Many programs and projects are unable to clearly demonstrate their impacts 

on measures of economic growth. 

The Bureau of Economic Growth reorganizes several Federal economic development programs into 

discrete functions based on mission, capabilities, and delivery method – with the intent of increasing 

efficiency and accountability, and improving outcomes and services to citizens, business owners, and 

communities. Consolidating this assistance within DOC provides an ideal opportunity to streamline and 

consolidate standards and processes for eligibility and participation, including planning and reporting 

requirements.

The new Bureau will accomplish its mission via three operational arms – planning, grant-making, and 

technical assistance – as well as an office of Bureau-wide administration. The Planning Office will engage 

State, local, and tribal community development agencies/authorities, in addition to regional consortia 

of these entities. Its primary function will be to leverage these agencies’ internal planning capabilities 

to identify each community’s unique barriers to economic growth and set community goals that are 

specific, measurable, actionable, relevant, and time-bound. Through this planning process, these State, 

local, tribal, and regional agencies can establish the criteria and milestones by which to measure the 

effectiveness of any subsequently awarded grants. 

After completing the planning process, applicants can apply to the Bureau’s Office of Grant-Making for 

the funds to implement their plans in a manner consistent with their established goals. The Office of 

Grant-Making will craft criteria to assure that the implementation activities are sufficiently comprehensive, 

actionable, and consistent with the applicant’s plan. 

The Office of Technical Assistance will work directly with non-profit and educational organizations 

operating within the State, local, tribal, or regional areas to build capacity through strategic and 

operational training and dissemination of best practices in economic development to local businesses 

and practitioners. These non-profits will apply directly to the Office of Technical Assistance for funding 

for technical assistance activities that support the community economic development plan. In addition 

to providing funding, the Office of Technical Assistance could provide access to assets that support the 

non-profit’s implementation. This direct engagement with non-profits will allow the Office of Technical 

Assistance to function in an efficient and scalable manner, without duplicating staff or other resources 

that already exist in the local community. Recognizing the unique challenges faced by small businesses, 

this proposal does not include the Small Business Administration’s Office of Entrepreneurial Development, 

which provides planning and educational services exclusively to small businesses, within the new bureau.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 80 CENTURY

Centralizing these economic development programs and activities under DOC is advantageous for several 

reasons. DOC is already tasked with the missions of “promoting job creation and economic growth” and 

“leading the Federal economic development agenda by promoting innovation and competitiveness, and 

preparing American regions for growth and success in the worldwide economy.” As such, Commerce is well 

equipped with resources and expertise to support the proposed economic development consolidation 

and advance economic growth. 

Through its Bureaus of Economic Analysis and the Census, DOC has access to comprehensive economic 

data which can be used to inform economic development strategies, measure outcomes, and improve 

accountability. Additionally, DOC has wide-ranging capabilities within its offices and Bureaus which 

make it uniquely suited to address the intrinsically multi-faceted nature of economic development. For 

example, it can leverage technical expertise to assist businesses with existing international footprints, 

or those looking to export through trade functions like export assistance and attracting foreign direct 

investment; facilitate technological innovation and commercialization; and help businesses register and 

protect their intellectual property.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 81

U.S. Public Health Service Commissioned Corps

Department of Health and Human Services

Summary of Proposal: This proposal would transform the Commissioned Corps (Corps) into a 

leaner and more efficient organization that would be better prepared to respond to public health 

emergencies and provide vital health services. It would do this through a series of management 

improvements, including reducing the size of the Corps and building up a Reserve Corps for response 

in public health emergencies.

1 Issues on the Need for the Public Health Service’s Commissioned Corps. GGD-96-55: Published: May 7, 1996. Publicly 

Released: May 15, 1996

THE CHALLENGE 

The Corps consists of approximately 6,500 uniformed public health professionals, who work alongside 

their civilian counterparts performing the same jobs but often receive higher total compensation. Corps 

officers receive military-like benefits, even though they have not been incorporated into the Armed Forces 

since 1952, and generally do not meet the Department of Defense’s criteria for the military compensation 

system. Further, the Corps’s mission assignments and functions have not evolved in step with the public 

health needs of the Nation.

The Fiscal Year 2019 Budget raised questions about the value of having Corps officers in roles that civilians 

can fill, given they are more expensive than equivalent civilians. Only a small percentage of Corps officers 

deploy for public health emergencies, and many officers encumber positions that could be filled by 

civilians. In addition, a 1996 Government Accountability Office (GAO) Report1 raised questions about 

the need for Corps officers in positions that did not provide direct health services.

THE OPPORTUNITY 

This proposal would reduce the Corps force from approximately 6,500 officers to no more than 4,000 

officers, and create a Reserve Corps that can provide additional surge capacity during public health 

emergencies. These reforms would result in a Corps that is more appropriately equipped to provide 

critical public health services and support in public health emergencies. 

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Reduce the Size of the Corps

This proposal would reorganize the Corps through a number of administrative and legislative reforms 

that would reduce unnecessary positions within the Corps and utilize Federal funds more effectively. 

The Department of Health and Human Services (HHS) would hold the Corps to a new standard, and 

require that officers fill critical public health roles and/or respond to public health emergencies. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 82 CENTURY

Under this proposal, HHS would reduce the size of the Corps to no more than 4,000 officers. Specifically, 

the agency would: 1) civilianize officers who do not provide critical public health services or support in 

public health emergencies; 2) require that Corps officers initially work in a hard-to-fill area and continue 

to serve there, or deploy as needed in a public health emergency (at least once every three years); and 

3) enforce standards for Corps eligibility and readiness.

Create a Reserve Corps

This proposal would also create a Reserve Corps–similar to those used by other uniformed service 

programs–that would deploy either in a public health emergency or to backfill critical positions left

vacant during Regular Corps deployments. The Reserve Corps would consist of Government employees 

and private citizens who agree to be deployed and serve in times of national need. The Reserve Corps 

would be an integrated part of the HHS response to public health emergencies.

Budgetary Reforms

In addition to restructuring the Corps workforce, this proposal would more appropriately allocate 

the cost of Corps officers to ensure each agency pays its fair share for Corps officers moving forward. 

Currently, if an agency employs a Corps officer the agency does not pay the accruing retirement costs 

for that officer, even though it pays the accruing retirement costs of civilian employees. This can result 

in an agency employing a Corps officer instead of a civilian because the Corps officer appears less costly 

than is actually the case. This proposal would require agencies to pay the accruing retirement costs for 

Corps officers moving forward. 

Under this proposal, the Corps would deliver on its mission in a more efficient and effective manner and 

spend taxpayer dollars more effectively. At the end of this transformation, the Corps would be leaner and 

have an improved ability to provide public health services and respond to public health emergencies.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 83

Improving NASA’s Agility through Increased Use of 

Federally Funded Research and Development Centers 

National Aeronautics and Space Administration

Summary of Proposal: This proposal would establish an accelerated process for determining 

whether one or more of the National Aeronautics and Space Administration’s (NASA) Centers should 

be converted to, or host, a Federally Funded Research and Development Center (FFRDC). FFRDCs 

can potentially allow the agency to be more agile in rapidly responding to changing needs and in 

recruiting and retaining scientific and technical expertise. 

THE CHALLENGE 

The missions and programs of NASA are conducted across 10 geographically-dispersed Centers, augmented 

by several testing and support facilities. While nine of the Centers are Government owned and operated, 

the Jet Propulsion Laboratory is operated by the California Institute of Technology as an FFRDC. 

In 2004, the President’s Commission on Implementation of United States Space Exploration Policy found 

that NASA Centers: 1) needed to modernize their infrastructure; 2) lacked institutional incentives to align 

them with new policy; and 3) utilized often ossified personnel practices. The Commission recommended 

that NASA Centers be reconfigured as FFRDCs to enable innovation, work more effectively with the 

private sector, and stimulate economic development. With the advent of the President’s National Space 

Strategy, a renewed look at the FFRDC operating model is warranted as part of NASA’s broader strategy 

to meet the Administration’s ambitious space objectives. This proposal would establish a process for 

determining whether one or more of NASA’s other Centers should be converted to, or host, an FFRDC.

THE OPPORTUNITY 

The new National Space Strategy and National Space Policy Directive 1 require the full agility of NASA, 

in concert with its commercial and international partners, in order to realize the President’s goals to 

return American astronauts to the moon and follow with human missions to Mars. In order to bolster 

NASA’s agility, increased use of FFRDCs could provide greater flexibility than civil servant organizations, 

potentially allowing them to better meet the agency’s evolving needs.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Background on FFRDCs

FFRDCs are research institutions that are owned by the Federal Government, but operated by 

contractors. They are intended to provide Federal agencies with Research and Development (R&D) 

capabilities that cannot be effectively met by the Federal Government or the private sector alone, and 

can convey a number of benefits, including the ability to recruit and retain scientific and technical 

expertise, and to more rapidly respond to the R&D needs of a Federal agency than would be possible 

with a civil servant workforce.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 84 CENTURY

The new National Space Strategy and National Space Policy Directive 1 make examining the potential 

advantages of an FFRDC model at NASA particularly timely. FFRDCs may offer a powerful approach 

to enable NASA to better align its workforce skillsets with Agency priorities, while simultaneously 

engendering an entrepreneurial spirit that better allows NASA to infuse talent from industry and 

commercial partners.

FFRDCs offer a number of advantages over traditional NASA Centers in terms of their competitive 

compensation to employees, flexibility, and technical skills available to the Agency. They occupy a 

unique position in the Nation’s R&D base: they are free from many of the outdated mechanisms inherent 

in the civil service, and can also perform work for non-Government customers. As a result, FFRDCs are 

noted for their technical excellence, strong integration with the U.S. industrial base, and agility. All of 

these are essential as NASA works to meet the bold objectives laid out in the National Space Strategy 

and National Space Policy Directive 1.

1 Congressional Research Service, “Federally Funded Research and Development Centers (FFRDCs): Background and 

Issues for Congress,” December 1, 2017.

Process to Determine Best Role for FFRDCs

This proposal lays a process to determine if one or more of NASA’s other Centers should be converted to, 

or host, an FFRDC. NASA would oversee this process and provide an analysis, including recommendations, 

to the White House by the end of August 2018 so that the outcome can be reflected in future budget and 

policy plans and proposals. NASA’s analysis would draw from prior studies of this topic and evaluate 

the potential of an FFRDC to further the Administration’s policy goals more effectively. In addition to 

studying whether one or more Centers could potentially be converted to an FFRDC in whole or in part, 

NASA would also establish whether it may be effective to perform new programs and projects using an 

FFRDC structure.

The additional analysis needed before increasing the use of FFRDCs will address the following:

• Although FFRDCs have several advantages over Government-owned and operated facilities, they 

can also have drawbacks. A 2017 report by the Congressional Research Service, for example, noted 

concerns with FFRDCs including mission creep, ineffective Federal agency oversight, and competition 

between FFRDCs and the private sector for Federal R&D funding.1 The analysis will weigh the specific 

costs and benefits of establishing an FFRDC for particular NASA Centers. 

• It is possible that a new FFRDC hosted at a Center may be effective in running new programs or 

projects that are part of the Administration’s space policy but are not yet underway. The analysis 

will examine whether these programs could more effectively be run by establishing a new FFRDC. 

Conversion of a Center, or parts of a Center’s operation, to an FFRDC would require several steps related 

to developing the sponsoring agreement with the organization managing the FFRDC, and addressing 

human capital issues. The analysis will examine these steps and estimate their feasibility.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 85

Management Consolidation of Federal

Graduate Research Fellowships 

National Science Foundation

Summary of Proposal: This proposal would consolidate the administration of graduate fellowships 

for multiple Federal agencies under the National Science Foundation (NSF) in order to reduce the 

total cost of administering those fellowships.

THE CHALLENGE 

Multiple agencies are administering many different graduate research fellowships across the Federal 

Government. Some of the larger programs fund over a thousand fellowships annually while smaller 

programs support only a handful of fellowships each year. Each awarding agency devotes resources to 

administering these fellowships, but some are similar enough that their management could be consolidated 

at one agency, potentially resulting in lower costs.

This proposal would consolidate the administration of Federal graduate research fellowships for smaller 

fellowship programs at NSF. NSF would leverage the efficiency of its existing graduate fellowship program 

to coordinate the fellowship application, selection, and award processes for other agencies, and be 

reimbursed by the other agencies for this work.

THE OPPORTUNITY 

Consolidating the management/administration of graduate fellowships for smaller agencies at NSF could 

lead to reduction of duplicative administrative efforts and yield savings across the Federal Government.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Graduate fellowships provide one or several years of funding support for students pursuing a Masters or 

Ph.D. degree. Awardees are selected based on a range of criteria, from their academic accomplishments 

to the broader societal impacts of their research work. Fellowships are a source of funding for student 

researchers in addition to research grants obtained by university faculty, and because fellowships 

tend to be highly competitive, they are viewed as prestigious in the scientific community. The Federal 

Government is by far the largest funder of graduate fellowships in the United States, but fellowships are 

also offered by foundations and private companies. 

NSF awards the highest number of graduate fellowships of all Federal agencies (more than 1,000 new 

fellows every year), and has an efficient system in place to do so. For agencies with much smaller fellowship 

programs, using NSF’s fellowship process instead of their own could be more efficient and produce savings 

if fellowship offices at other agencies can be downsized or eliminated. Even if NSF requires additional 

resources to process the increased workload, the Government-wide resources spent on administering 

graduate fellowships would be reduced compared to the status quo. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 86 CENTURY

An initial step to implement this proposal would be to take a thorough inventory of existing graduate 

fellowship programs across the Federal Government. At the same time, NSF would evaluate which types 

of programs and associated tasks would benefit from using NSF’s expertise and grants management 

infrastructure. Depending on the number and size of other agencies’ fellowship programs identified in 

the inventory, a phased approach could be implemented where less complex programs are the first to 

move under NSF management. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 87

Rationalize the Federal Real Property Approach

Government-wide Application

Summary of Proposal: The Federal Government is the largest single employer and owner of real 

property in the United States, and as such, has a huge impact on the Nation’s communities. Despite 

these far-reaching implications, its management of that real property is a mixed bag of smart 

space use, underutilized assets, liabilities, and leases. The Federal Government can do a better job 

strategically managing these assets, including utilizing private sector best practices, to improve our 

communities, right-size the Federal real property portfolio, and provide better value and services to 

the taxpayer. This proposal encompasses moving Federal offices and jobs for better quality of life 

and a more capable workforce; a new budgetary mechanism for capital projects; better incentives 

for agencies to divest unnecessary assets; and smarter leasing practices.

THE CHALLENGE 

Since 2004, the Federal Government has improved its real property management and has disposed of 

many properties that were no longer a needed. These actions have addressed low-hanging fruit, but 

many opportunities remain for agencies to improve their decision-making and identify transactions that 

provide greater value for the Government. Unlike the private sector, Federal agencies sometimes lack 

incentives to think strategically about their workforce and shifting mission needs, and how those factors 

influence where they are located. Without transformative real property-related authorities, the Federal 

Government’s ability to meet its mission needs and make smart real estate decisions will continue to 

stagnate and fall behind the private sector. 

THE OPPORTUNITY 

A combination of administrative and statutory changes would provide opportunities to optimize the 

Federal footprint by making smart investments in renovations and new facilities, driving down lease costs, 

and disposing of unneeded real estate through a streamlined process that results in the greatest return 

to the taxpayer. Together, these reforms would allow agencies to have the facilities they need to fulfill 

their missions and serve the American people, while at the same time freeing up unused or underutilized 

properties to generate a return for taxpayers and spur local economic development.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Title 40 Disposal Process Improvements 

Title 40 of the U.S. Code governs the process by which most agencies seek to dispose of unneeded Federal 

real property. The Title 40 process is complex, with many required steps prior to the disposal of real 

property: vetting for surplus, excess, public benefit conveyance, and finally sale. GAO has highlighted 

that the complexity of disposal under Title 40 impacts the decisions that agencies make and can lead 

to decisions and outcomes that are not economically rational. In response, prior Administrations have 

proposed modest disposal reforms, but those proposals did not advance in the Congress. In December 

2016, the Congress enacted legislation, the Federal Assets Sale Transfer Act (FASTA), which created a new 

Public Buildings Reform Board to review agency submissions for disposal, and also included some limited 

disposal process streamlining. While FASTA is a substantial step forward—and the enhanced visibility 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 88 CENTURY

from the Board will generate additional interest—the legislation did not tackle the major impediments 

to accelerating and expanding agency disposals. 

The Administration believes major new authorities are necessary to fully utilize the disposal process to 

return unnecessary Federal property back to productive non-Federal use. As part of its Infrastructure 

Initiative, the Administration proposed a series of improvements to streamline, accelerate, and incentivize 

the Title 40 disposal process. These improvements include: eliminating the public benefit conveyance 

authorities, allowing agencies to take unneeded Federal property directly to sale; retention of net proceeds 

of sale dedicated to real property use without further appropriation; and expansion of the allowable 

uses of the Government Services Administration (GSA) Disposal Fund to support agencies with the 

upfront costs of disposition in advance of making a report of excess. The Administration is proposing the 

elimination of all conveyance provisions, allowing surplus properties to go straight to market, maximizing 

the return to the taxpayer. Several Government Accountability Office (GAO) engagements since 2004 

have highlighted the benefit of allowing agencies to retain some or all of sales proceeds associated with 

the disposition of Federal real property. Without this reform, agencies currently incur substantial work 

and costs to dispose of properties, with little to no financial upside for them, reducing their incentive to 

pursue such disposals.

Federal Capital Revolving Fund (FCRF) 

The Administration recognizes that the Federal Government must have modern facilities to carry out agency 

missions and serve the American people. However, over the last decade, it has been difficult to secure 

the necessary appropriations to renovate existing buildings and construct major new Federal facilities, 

such as the replacement of the Federal Bureau of Investigation Headquarters facility in Washington, D.C. 

This inability to secure sufficient, timely funding to execute capital transactions often results in project 

cost escalation and costly lease extensions. 

To address this, in the Infrastructure Initiative and the Fiscal Year (FY) 2019 Budget, the Administration 

has proposed creating a new funding mechanism for large, civilian real property projects that is similar 

to the capital budgets that States employ. The proposal would establish a mandatory revolving fund 

for the construction or renovation of Federally-owned civilian real property, thus allowing agencies to 

budget for acquiring major assets incrementally while operating within the established, transparent 

Federal budget rules. This proposal is supported within the FY 2019 Budget, providing $10 billion for the 

corpus of the Fund. GAO has conducted frequent reviews of real property acquisition methodologies 

and challenges encountered with funding large projects. In 2014, GAO supported a similar approach to 

this proposal; however, the Administration’s proposal provides even more flexibility and cost savings 

opportunities that those identified by GAO. 

Relocation Analytics 

Due to mission and cost considerations, agencies are considering opportunities to reposition their real 

property footprints, including relocating staff and offices to locations outside of the National Capital 

Region. Unlike the private sector, which has considerable flexibility and often takes a holistic approach 

to real estate and corporate mission requirements, agencies do not do a good job thinking holistically 

about their mission, physical location, and how they could deliver services differently. The Administration 

believes there are many lessons that can be drawn from the private sector on how to assess changing 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 89

organizational requirements and how real estate footprints can be adjusted given information technology 

and management practices. The goal of this effort, led by GSA, is to provide agencies with thought-process, 

tools, and data to drive smarter decisions in agency relocations, and work is already underway. 

GSA Leasing Improvements 

In addition to managing Federal buildings, GSA also engages in extensive leasing with private sector 

lessors, who provide office and other space to Federal agency tenants. GSA’s lease portfolio includes 

approximately 180 million rentable square feet in more than 8,000 separate leases. In any given fiscal 

year, GSA executes an average of 25 prospectus-level lease transactions, defined as lease awards where 

the annual cost of the lease payments exceed more than approximately $3.1 million. 

GSA has seen considerable improvement in their leasing practices in recent years, demonstrating 

significant reductions in the number of holdover leases and reductions in the size of the lease portfolio. 

However, more can be done to ensure that GSA makes smart leasing decisions, particularly when 

running lease replacement competitions. GSA will be undertaking two policy changes: executing longer, 

non-cancelable lease terms to secure lower rates, and undertaking a more rigorous cost analysis before 

executing space reductions to ensure cost effective decisions. GSA continues to assist other Federal 

agencies in making the most cost effective decisions under the Administration’s Reduce the Footprint 

policy. Agencies are looking to reduce square footage and GSA helps to ensure that any reduction leads 

to a cost-effective solution.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 90 CENTURY

Consolidate and Streamline Financial Literacy Efforts

Summary of Proposal: More than 20 Federal agencies have some form of financial education or 

literacy program. To ensure effective allocation of Federal financial literacy resources and avoid 

unneeded overlap and duplication, this proposal consolidates and streamlines these programs.

THE CHALLENGE 

The Federal Government spends an estimated $250 million annually on financial literacy and education 

programs and activities across more than 20 Federal agencies to educate Americans about a wide array 

of financial literacy and education topics. These programs lack meaningful coordination, clear measures 

of effectiveness, and are oftentimes overlapping or duplicative. Furthermore, very few agencies appear 

to monitor the effectiveness of their programs and only a handful of these programs have been formally 

assessed or evaluated for impact. 

In addition to Federal programming, many non-federal organizations provide financial literacy services 

and resources, including nonprofit organizations, consumer advocacy organizations, financial services 

companies, employers, and State and local governments. Given the large number of participants served 

by Federal financial literacy and education programs, the Federal Government should consider the most 

effective ways to deliver these services while maximizing limited Federal resources and supporting the 

efforts of other public and private participants in this field. 

The Financial Literacy and Education Commission (FLEC) was established by law in 2003 and is made 

up of the heads of 22 Federal agencies and the White House Domestic Policy Council. Chaired by the 

Secretary of the Treasury, FLEC is tasked to improve “the financial literacy and education of persons in 

the United States through the development of a national strategy.” However, the FLEC has had limited 

success rationalizing Federal efforts to promote access to quality financial literacy and education tools 

for all Americans. 

THE OPPORTUNITY 

Consolidating and streamlining financial literacy efforts will increase Government efficiencies and reduce 

fragmentation among Federal programs. Reform would also improve coordination with entities outside 

of the Federal Government and develop a data-driven approach to financial education that will increase 

the impact of the programs and make financial literacy information more accessible. 

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

This proposal would require the Department of the Treasury (Treasury) to develop recommendations 

for Federal financial literacy and education activities that will be shared with the Office of Management 

and Budget before October 1, 2018. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 91

The Administration will consider streamlining and consolidation proposals as part of the Fiscal Year 2020 

Budget, including but not limited to:

• Using an evidence-based approach to articulate a national vision that outlines the appropriate role 

for the Federal Government and leverages the current work of non-profit organizations, the private 

sector, and State and local governments.

• Elimination and development of programs based on how much knowledge participants are acquiring 

from the financial literacy and education program, as well as how likely the program is to result in 

behavior that leads to greater financial capability. 

• Consolidation of financial literacy programs into fewer agencies, with a mandate that they consult 

with relevant experts in other agencies. 

• Consolidation of financial literacy policy and research into a single agency or commission that would 

evaluate both existing programs and proposals for future programs.

Challenges Posed by Status Quo

In addition to the $250 million that the Federal Government spends annually on financial literacy and 

education programs and activities, $170 million is spent on technical assistance and education for 

entrepreneurs by the Small Business Administration, one component of which addresses financial 

literacy. Six of the more than 20 Federal agencies that administer financial literacy programs account for 

almost 90 percent of the Federal funds expended on financial literacy for individuals and households. 

Some areas of potential overlap and duplication among Federal financial education activities, include:

• Financial Counseling: The Bureau of Consumer Financial Protection (BCFP), the Department of Defense 

(DOD), the Department of Housing and Urban Development (HUD), the Department of the Interior, and 

the Department of Veterans Affairs all fund or provide general or topic-specific financial counseling. 

• Retirement planning: BCFP, DOD, the Department of Labor (DOL), the Department of Health and 

Human Services (HHS), the Office of Personnel Management, the Social Security Administration, and 

Treasury all support activities that address retirement planning and decision-making. 

• Research: BCFP, DOL, the Department of Education (ED), the Federal Deposit Insurance Corporation 

(FDIC), the Federal Reserve Board, HHS, HUD, and Treasury are supporting (or have recently supported) 

research and evaluation of financial literacy and education. 

• Financial Education for military members: BCFP, DOD, and the Federal Trade Commission (FTC) 

all administer financial education and counseling programs for military members and their families. 

• Financial Literacy for youth: BCFP, ED, FDIC and Treasury all support initiatives that address financial 

literacy for youth. 

• Websites with financial education content: Many Federal agencies manage duplicative 

web content on financial education (e.g., BCFP, FTC, the National Credit Union Administration, 

and Treasury). 

However, limited evaluation is performed by Federal agencies on the effectiveness and impact of their 

financial literacy programs. For example, only three agencies have recently evaluated their programs using 

outcomes that measure changes in behavior. Most agencies only measure accessibility and utilization 

of their activities. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 92 CENTURY

Scope of Treasury’s Planned Review of Status Quo

Currently, the FLEC is assessing the landscape of Federal financial literacy and education activities, with 

the goals of:

• Determining the appropriate Federal role and effective methods to support programs administered 

by non-profit organizations, the private sector, State and local governments, and others. 

• Consolidating Federal financial literacy and education efforts, including streamlining overlapping 

or duplicative programs.

• Identifying best practices and eliminating ineffective programs, activities, or practices.

• Developing high-quality, consistent Federal financial literacy and education curriculum and resources. 

• Developing an effective mechanism for oversight and governance of Federal financial education 

programs to strengthen effectiveness and eliminate the risk of future overlap, duplication, and 

ineffectiveness. 

• Establishing governance and oversight to ensure that any new programs are aligned with the 

Government-wide vision.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 93

Streamline Small Business Programs

Small Business Administration and the Departments of Agriculture, 

Transportation, Treasury, & Veterans Affairs

Summary of Proposal: This proposal consolidates the various Federal programs that assist small 

business owners secure access to capital and Federal Government contracts into the Small Business 

Administration (SBA). In instances where a Federal lending or contracting certificate program is 

highly specialized or industry-specific, SBA’s duplicative authority would be eliminated.

THE CHALLENGE 

Small businesses play a critical role in our Nation’s economic growth. Approximately half of the U.S. 

private-sector labor force – nearly 58 million Americans – are employed by our Nation’s 30 million small 

businesses. Communities across the country rely heavily on the products, services, and jobs created by 

these Main Street businesses. Two of the most important ways the Federal Government supports small 

business creation and growth are by working with private lenders to provide capital access, and making 

Government contracting opportunities available to small businesses.

Unfortunately, the GAO has repeatedly identified the Federal Government’s current model for operating 

these programs as needing increased coordination and harmonization, citing duplicative programs at 

SBA and the U.S. Departments of Agriculture, Transportation, Treasury, and Veterans Affairs. Examples of 

issues that arise from duplicative programs include: inconsistent standards and processes for eligibility 

and participation; lack of consistent reciprocity between agencies and programs; and failure to realize 

efficiencies and economies of scale. Addressing these issues is critical for providing better service to 

America’s small businesses, creating jobs, and maximizing the Federal Government’s investments in 

communities.

THE OPPORTUNITY 

The various Federal small business lending and Government contracting programs represent ideal 

candidates for consolidation, given the overlap in their mission and delivery method. Centralizing these 

programs would provide an opportunity to assess and streamline participation requirements such as 

eligibility criteria, application processes, and reporting. It would also help to ensure consistency in the 

application of small business certification criteria and reciprocal recognition across Federal agencies. 

Furthermore, it would optimize the value of the Federal Government’s small business programs by achieving 

long-term cost efficiencies through centralized operations and oversight functions. Streamlining these 

programs and making them less burdensome would ultimately enable America’s entrepreneurs to invest 

more of their time and hard-earned profits in operating and growing their businesses. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 94 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

This consolidation will improve services to three major stakeholders: 1) business owners seeking financing 

or contracting certifications; 2) the lenders that service Government-guaranteed loans; and 3) the Federal 

agencies that contract with certified small businesses. It would help strengthen and streamline SBA’s 

operations across two of its primary program areas: 1) capital access; and 2) Government contracting support. 

Capital Access

Financing is a key component of starting, operating, and expanding a business. However, access to 

capital continues to be a hurdle for many entrepreneurs. Small business owners often do not have the 

same access to credit as larger businesses that can more readily take on a traditional loan from a bank. 

New entrepreneurs may not have a credit score that can guarantee them a loan, especially on a new or 

innovative product. Entrepreneurs in emerging markets are more likely to be denied credit and often 

rely on personal savings or credit cards to sustain their business. Furthermore, access to capital can be 

especially problematic for groups historically underrepresented in traditional commercial lending. The 

Federal Government helps mitigate these market failures through programs designed to offer creditworthy 

businesses the ability to obtain financing. 

Through its Office of Capital Access, SBA fills gaps in the commercial lending market and ensures that small 

businesses are well positioned to access credit. It supports strategies that focus on providing reasonable 

credit terms and access to credit for minority-owned, women-owned, and veteran-owned small businesses 

and entrepreneurs. Where appropriate, other small business loan and loan guarantee programs would 

be folded into the SBA’s Office of Capital Access. SBA’s existing expertise in providing capital access to 

small businesses makes it the best agency to oversee this combined lending portfolio. In addition to 

streamlining assistance, this proposal would create the opportunity for more comprehensive and costeffective program oversight and Federal credit risk management, including loan and lender monitoring, 

predictive risk assessments and mitigation activities, real time reporting, and enforcement activities.

Government Contracting Support

The Federal Government is the largest procurer of good and services in the world, spending hundreds 

of billions of dollars annually and averaging nearly $90 billion in contracts to certified small businesses 

each year. Contracting with the U.S. Government presents a large opportunity for small businesses, and 

the Congress has recognized its importance by establishing a minimum Federal contracts set-aside of 23 

percent for small businesses. In addition, as a subset of this overall small business goal, the Government 

strives to award no less than 5 percent of contracts to small disadvantaged businesses and women-owned 

small businesses, and 3 percent to service-disabled veteran-owned small businesses and those in 

HUBZone locations. These purchasing decisions result in high-impact investments that help grow small 

businesses and stimulate local economies.

Duplicative programs that support small business contracting would be consolidated into the SBA’s Office 

of Government Contracting and Business Development. In the event that any overlapping programs require 

industry-specific economic expertise, these programs would remain at their respective agencies, and 

the SBA would eliminate its duplicative authority. This proposal would create a “one-stop shop” within 

SBA for all Federal contracting certifications for both the participating small businesses and the Federal 

agencies seeking to meet their contracting requirements. This would result in reciprocal recognition of 

small business contracting certifications across all Federal agencies and make consistent standards and 

processes for eligibility and participation across programs targeting similar constituencies.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 95

The SBA currently provides expertise in this area, serving in an oversight role to ensure that the Government’s 

contracting goals are achieved each year. It also reports on Federal efforts to stimulate technological 

innovation and commercialization through small businesses, and provides unique services like the surety 

bond guarantee to support contractors who need bonds to access contracting markets. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 96 CENTURY

Consolidation of Certain Protective Details

U.S. Marshals Service

Summary of Proposal: This proposal would consolidate protective details at certain civilian Executive 

Branch agencies under the U.S. Marshals Service (USMS) in order to more effectively and efficiently 

monitor, assess, and respond to potential threats. Threat assessments would be conducted by the 

USMS with support from the U.S. Secret Service (USSS). Determinations as to whether protection 

would be provided and its size and scope would be made by the USMS in consultation with affected 

agency heads.

THE CHALLENGE 

The protective details of Government officials, including cabinet officials and some sub-cabinet officials, 

vary widely in size, scope, budget, training, and statutory authorization. To provide more effective and 

necessary security overall, this proposal would authorize USMS to manage protective details involving 

specified civilian Executive Branch agencies. Threat assessments would be conducted by the USMS with 

support from USSS and affected agencies upon request by the USMS. This proposal would not affect law 

enforcement or military agencies with explicit statutory authority to protect Executive Branch officials, 

including the Departments of Justice, State, Homeland Security, or Defense, USSS, or other non-civilian 

agencies. Instead, it would focus on standardizing protective details at civilian Executive Branch agencies 

that currently derive protection from a USMS deputation or other source, and assuring that a uniform 

and criteria-based determination of threat level and security need is centrally made. 

THE OPPORTUNITY 

The USMS currently provides for the protection of judicial and designated Federal Government officials by 

providing Deputy U.S. Marshals (DUSM) to serve in a protective capacity, and assists in the protection of 

other officials by deputizing Government employees of other agencies to perform this function. Currently, 

the USMS provides Deputy U.S. Marshals for the Secretary of Education and the Deputy Attorney General’s 

protective details. In addition, the agency deputizes Government employees of the Departments of 

Labor, Energy, Commerce, Veterans Affairs, Agriculture, Transportation, Housing and Urban Development, 

the Interior, and the Environmental Protection Agency to assist in the protection of their cabinet- and 

sub-cabinet officials. While the USMS requires certain baseline training and law enforcement requirements 

in order to approve a deputation, individuals serving on protective details vary in background, training, 

and experience. Furthermore, these agencies have full autonomy in determining the size and scope 

of their details’ activities, which vary based on a perceived threat and willingness to pay for protective 

services rather than the detection or assessment of existing threats.

The USMS currently exercises threat assessment responsibility for all matters related to members of the 

judiciary, court family, and other designated protectees through its Office of Protective Intelligence. The 

USSS currently exercises expertise in threat assessments through its National Threat Assessment Center 

(NTAC). NTAC provides guidance on threat assessment and training, both within the USSS and to law 

enforcement, public safety, and academic partners. Specifically, the Presidential Threat Protection Act of 

2000 authorizes the NTAC to provide consultation on complex threat assessment cases or plans, provide 

training in the area of threat assessments, and implement programs to promote the standardization of 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 97

Federal threat assessments, among other activities. The USSS is therefore well-positioned to support 

the USMS on best practices in protection and threat assessment, as needed. Based on these resources, a 

centralized analysis can be performed to determine the necessity for and extent of any protective detail.

Consolidation of resources related to certain protective details under one agency would leverage expertise 

of Government agencies trained in protective missions and threat analysis, ensure more efficient use 

of Government resources, and provide designated Government officials with appropriate protection 

tailored to their individual circumstances.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

Under this proposal, the USMS would be granted authority over designated protective details and 

provide its own personnel for the purposes of threat assessment and protection. Determinations 

as to whether protection would be provided and its size and scope would be made by the USMS, as 

delegated by the Attorney General in consultation with affected agency heads. The number of Deputy 

U.S. Marshals provided for any approved protection of an official would vary based on the individual’s 

threat assessment and risk. This proposal would be phased in as necessary in order to avoid disruptive 

impacts to both USMS and protected officials. The Administration will consult with the Congress 

regarding any need for additional legislative authority. Further, the Office of Management and Budget 

will coordinate with the Department of Justice and affected agencies on budgetary implications and 

necessary implementation guidance.

Consolidation of certain protective details under USMS offers Government-wide benefits including, but 

not limited to:

Standardization of Protective Service Levels

Consolidating resources and authority for certain protective details under the purview of the USMS would 

standardize those protective details Government-wide. USMS would work with USSS as necessary to 

determine threat levels for covered Federal officials in a consistent manner across all agencies. Protectees 

would benefit from standard, high quality training, as well as the USMS’ ability to set priorities and broader 

strategy across the force, an advantage over the current decentralized model. Operational de-confliction 

and coordinated processes would be easier and more efficient with fewer agencies providing protection 

for designated cabinet and sub-cabinet officials. Additionally, while the USMS requires general law 

enforcement training in order to approve a deputation, agency employees serving on protective details 

vary in background, capabilities, and experience. Providing DUSMs would ensure that every protectee 

has access to well-trained Federal law enforcement officials with appropriate experience and oversight.

New Efficiencies

Rather than employing separate protective details with separate resources and authorities, the USMS 

would professionalize and standardize this mission across multiple Executive Branch agencies. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 98 CENTURY

Small Grants Consolidation

U.S. Agency for International Development, Inter-American Foundation, 

and U.S. African Development Foundation

Summary of Proposal: The President’s Budget proposes to consolidate the small grants functions, 

expertise, and grantmaking from the Inter-American Foundation (IAF) and U.S. African Development 

Foundation (ADF) into the U.S. Agency for International Development (USAID) beginning in Fiscal 

Year (FY) 2019. The consolidation would be a significant step to reduce the proliferation of Federal 

international affairs agencies that are operating today, while also elevating community-led, “local 

works” small grants as a development and diplomacy tool for the U.S. Government.

THE CHALLENGE 

As a development and diplomacy tool, small grants allow the U.S. Government to engage directly with 

local organizations in poor and remote communities to support lives and livelihoods and build goodwill 

among local populations, often within foreign policy priority countries that the United States seeks to 

stabilize and/or assist in their journey to self-reliance. At present, multiple U.S. Government agencies 

provide small grants assistance; however, each faces unique challenges in doing so. Authorizations for 

carrying out small grants work are also long outdated or provided in annual appropriations only. 

As the U.S. Government’s lead development agency, USAID has experience in implementing small grants 

in political transitions, but its efforts to do so in long-term development contexts are more nascent, and 

often more labor-intensive per assistance dollar than traditional aid mechanisms. Meanwhile, IAF and 

ADF face the fixed overhead costs associated with running small independent agencies, which continue 

to comprise a significant share of their overall budgets, even as they have managed to keep variable 

costs per grant low. 

THE OPPORTUNITY

This proposal would support the USAID Redesign’s goal of helping countries on their journey to 

self-reliance, while also furthering the core mission of the foundations to support livelihoods in poor and 

remote communities across Latin America, the Caribbean, and Sub-Saharan Africa, leading to an aligned 

and enhanced approach to small grants for the U.S. Government. It would consolidate IAF and ADF’s 

deep expertise, relationships, and functions into USAID, thereby enhancing USAID’s capabilities while also 

reducing the duplication and overhead costs associated with having three agencies carry out small grants 

work. The proposal would better align the two foundations with U.S. foreign policy objectives and global 

development programs, while elevating community-led, “local works” small grants as a development and 

diplomacy tool and allowing for the sharing of best practices across USAID. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 99

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

This proposal is consistent with the Center for Global Development’s report entitled A Practical Vision 

for U.S. Development Reform (2017), which advised re-visiting the role of the foundations, in light of their 

overlap in mission and function with USAID. The Center advised considering the transfer of the certain 

elements of the foundations’ operating models into USAID, “potentially including outside advisory boards 

and flexible tools for grant-making to local civil society groups in developing countries.” The Congress 

has long recognized the value in small grants as an assistance-delivery mechanism, from establishing IAF 

and ADF in the late 1960s and early 1980s, respectively, to introducing a directive in annual appropriations 

over the past decade to enhance USAID’s capabilities in this area. This proposal would enable USAID to 

better achieve the intent of that directive. 

Through the consolidation, USAID would capitalize on the existing expertise, capacity, relationships, and 

tools that ADF and IAF provide, including their regional and market segment emphases, in order to reinforce 

the U.S. Government’s bilateral development efforts. In return, USAID would offer these programs a 

platform that would better integrate them with the Agency’s existing global development programs, more 

cohesively serve U.S. foreign policy objectives, and increase organizational efficiencies through reducing 

duplication and overhead. The consolidation would also serve to elevate community-led, “local works” 

small grants as a development and diplomacy tool for the U.S. Government, and it would allow for the 

sharing and integrating of best practices across USAID through the proposed Development, Democracy, 

and Innovation Bureau. As part of the proposal, IAF and ADF would begin to wind down as independent 

foundations in FY 2019, and would transfer their grants and select programmatic staff to USAID. 

In support of this consolidation proposal, the FY 2019 Budget requests a total of $55 million, across the 

following accounts: 

• $40 million in State/USAID’s Economic Support and Development Fund to support IAF and ADF’s 

grantmaking via USAID, beginning in FY 2019 (with $20 million per region);

• $7 million in USAID’s Operating Expenses account, to support the absorption of select programmatic 

staff from IAF and ADF in FY 2019; and

• $8 million for one-time costs to support the foundations’ orderly closeouts in FY 2019, in ADF’s 

($5 million) and IAF’s ($3 million) direct appropriations.

In recognition of the foundations’ regional expertise, the FY 2019 Budget proposes merging IAF’s grants 

and select personnel into USAID’s Latin America and Caribbean Bureau, and ADF’s grants and select 

personnel into USAID’s Africa Bureau. The work previously performed by the foundations would be initially 

programmed out of stand-alone offices within the regional Bureaus, but would be further integrated 

into the regional Bureaus over time. Overseas, IAF and ADF’s work would be fully integrated with USAID 

Missions. Certain cross-cutting functions (such as the monitoring and evaluation of small grants) would 

be housed centrally at USAID within the proposed Development, Democracy, and Innovation Bureau, 

so that such technical expertise and best practices could be leveraged for other regions and the Agency 

as a whole.

The proposal would also entail establishing a subcommittee under USAID’s Advisory Committee on 

Voluntary Foreign Aid for IAF and ADF’s former boards to remain involved with the foundations’ work 

going forward and to advise the Administrator on small grant activities generally, and on the smooth 

transition of the foundations’ functions.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 100 CENTURY

Transition to Electronic Government

National Archives and Records Administration (with the Department of Homeland 

Security and Social Security Administration)

Summary of Proposal: This proposal would transition Federal agencies’ business processes 

and recordkeeping to a fully electronic environment, and end the National Archives and Records 

Administration’s (NARA) acceptance of paper records by December 31, 2022. This would improve 

agencies’ efficiency, effectiveness, and responsiveness to citizens by converting paper-based processes 

to electronic workflows, expanding online services, and enhancing management of Government 

records, data, and information.

THE CHALLENGE

Federal agencies collectively spend billions of dollars on paper and paper-based records management 

practices. Even after decades of effort, far too many Federal Government services are still primarily 

paper-based. This forces NARA and Federal agencies to devote resources to actively processing, moving, 

and later maintaining large volumes of paper records (requiring facilities, staff, and support contracts), 

even as electronic communication and systems have dramatically increased the volume of information 

agencies must manage. To date, efforts to address this issue have been inconsistent and ineffective 

across agencies. 

The Federal Government must confront this challenge by taking a comprehensive, lifecycle approach 

to records management. On the front end, it must cease paper processes to the extent possible, which 

will enable more efficient and effective delivery of services. Then, on the back end, it must support 

streamlined and secure electronic records management. These actions will facilitate citizen services 

and benefit the taxpayer by creating efficiencies and preserving public access to Federal records.

THE OPPORTUNITY

As agencies implement electronic processes in place of paper, it will be easier for the public to connect 

with the Federal Government, and apply for and receive services, improving customer satisfaction. 

Electronic records will reduce processing times and decrease the probability of lost or missing information. 

For example, the Department of Homeland Security’s (DHS) U.S. Citizenship and Immigration Services 

(USCIS) currently ships most immigration applications among multiple facilities, such as lockbox and 

pre-processing centers, prior to adjudication, which is both costly and time consuming. 

Electronic records will greatly improve agencies’ ability to provide public access to Federal records, 

promoting transparency and accountability. Over the long term, this also will reduce agencies’ records 

management and storage costs and streamline the records management process, freeing resources for 

other high priority activities. This will also allow agencies to provide more timely and accurate assistance 

to their customers.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 101

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The Federal Records Act (FRA) authorizes NARA to issue Government-wide guidance to agencies on how 

to preserve their records and directs NARA to maintain a permanent archive of Government records that 

will be preserved indefinitely. NARA policies and regulations cover the entire lifecycle of records, from 

creation to use to storage or disposal. This proposal would use those authorities to drive agencies to 

reassess and modernize their paper-based processes Government-wide.

Currently, NARA holds more than 5 million cubic feet (equivalent to 12.5 billion pages) of archival records, 

and anticipates that an additional 3 million cubic feet of permanent records will be transferred by Fiscal 

Year (FY) 2030. Additionally, NARA’s Federal Records Centers Program stores over 28 million cubic 

feet of Federal Government records on a temporary basis for other Federal agencies, costing agencies 

approximately $200 million annually in payments to NARA. Agencies also acquire records management 

and storage services from commercial providers. At the same time, agencies are trying to manage a surge 

in their electronic records. NARA managed archival electronic records equivalent to 12 billion pages in 

2005, which grew to 34 billion in 2017.

However, the continuing need to support paper-based processes diverts resources away from investments 

in a modernized electronic records management system. Without focused attention to this challenge, 

NARA and agencies will face inadequate electronic records systems and protocols, leading to higher costs 

and lost records, as well as deficient practices and services for paper records.

This proposal would transition Federal agencies’ business processes and recordkeeping to a fully 

electronic environment, and end NARA’s acceptance of paper records by December 31, 2022. Establishing 

a deadline by which NARA will no longer accept paper records will force agencies to direct attention and 

resources to this issue in a way that has not occurred previously. To ensure this necessary transformation 

away from paper-based processes would occur across all of the Executive Branch, NARA will coordinate 

with Federal agencies to develop and provide the guidance, technical assistance, and services they will 

need to implement this proposal. The General Services Administration would play a supporting role by 

connecting agencies with commercial digitization services available in the private sector. This will allow 

agencies to more efficiently procure needed services, helping expedite the electronic records process.

U.S. Citizenship and Immigration Services Efforts to Expand Electronic Records

Even as the Administration moves toward electronic records management across the entire Federal 

Government, some individual agencies have already started to take critical steps toward this goal. 

For example, the USCIS National Records Center has centralized millions of paper records into a single 

facility, dramatically improving the integrity of USCIS’ recordkeeping and cutting the time spent on file 

retrieval—a vital component of application processing—from weeks and even months to only a few days.

USCIS already offers electronic filing capability for a replacement green card (I-90) and application for 

naturalization (N-400). It also plans to achieve end-to-end digital processing for all of the immigration 

benefits it adjudicates by the end of 2020. This will include the ingestion of all applications and evidence 

through adjudication, decision making, and communication with applicants. USCIS will create digital 

immigration records at the point of receipt that serve as the official record throughout the immigration 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 102 CENTURY

lifecycle. This will increase efficiency and reduce risk to the immigration system. To further eliminate 

paper, USCIS is moving to a fully automated Freedom of Information Act processing system. A subset of 

this electronic capability will be released to the public in summer 2018, and full deployment is scheduled 

to be complete by the end of 2018. Requesters will be able to file requests and receive responses online. 

These efforts also build on other important work USCIS has already done that uses electronic records to 

improve applicant services and increase efficiency, such as with its E-Verify system which electronically 

compares information from an employee’s Form I-9, Employment Eligibility Verification, to data from 

DHS and the Social Security Administration to confirm employment eligibility.

Social Security Administration Efforts to Expand Electronic Records

The Social Security Administration (SSA) also is reducing paper processes, relying on an expanding suite 

of automated and online options to conduct business with the public. In FY 2017, the public conducted 

over 155 million transactions via the SSA website, rather than through paper forms. SSA expects the 

number of successfully completed transactions in FYs 2018 and 2019 to increase by 35 million each year 

over the prior year. Additionally, SSA estimates that in FY 2019 about 50 percent of those submitting SSA 

retirement forms, or about three million people, will use SSA’s online services to complete their forms; 

this used to be a wholly paper-based, in-person transaction.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 103

Customer Experience (CX) Improvement Capability

Government-wide

Summary of Proposal: This proposal would transform the way Americans interact with the Federal 

Government by providing a modern, streamlined, and customer-centric experience for citizens, 

businesses, and other customers, comparable to leading private-sector organizations. The Office of 

Management and Budget (OMB) will provide leadership and establish a Government-wide capability 

to partner with Federal agencies to identify key customer groups (e.g., farmers, veterans), map their 

journeys from end-to-end and across agencies and programs, and improve their experience across 

delivery channels and organizational silos. This will be done in partnership with the U.S. Digital 

Service and the General Services Administration (GSA) Technology Transformation Service with 

contributions from specific involved agencies. This capability will also serve as a central resource 

to better manage organizational change and ensure reform proposals achieve mission, service, and 

stewardship objectives. 

THE CHALLENGE 

Americans expect well-designed, efficient Government services that are generally comparable in quality 

to that of leading private-sector organizations. Unfortunately, customer satisfaction with Federal 

services lags behind every other industry, as measured by the American Customer Satisfaction Index 

(ACSI), causing frustration for customers and higher costs for the Federal Government. While many 

agencies are taking action to improve their services, customer experience can lag when customer needs 

and journeys cross organizational silos. Whereas Government agencies execute their missions based 

on their specific authorities and responsibilities, customers tend to experience Government across 

stovepipes. For example, while the Federal Government strives to support small business growth and 

competitiveness, duplicative and inconsistent programs spread across five different Federal agencies 

have sometimes created confusion and extra work for the small businesses they mean to serve. 

As individual agencies make investments – particularly information technology investments – maturing 

the capability to improve customer experience across agency silos will help the Government meet 

21st Century needs and expectations. At the same time, improving customer focus can lead to greater 

efficiency and effectiveness in agency operations. This will require technical expertise, enhanced 

business processes, management support, and new Government authorities to create cross-agency, 

Government-wide solutions. 

THE OPPORTUNITY 

Establishing a Government-wide customer experience improvement capability would support existing agency 

efforts and create new Government-wide approaches to improve the way the public interacts with the Federal 

Government. In partnership with agencies, this new function would identify key Federal customers (e.g., 

veterans, students, farmers, retirees), map their journeys as they interact with Federal agencies, and work to 

streamline those interactions across delivery channels and organizational silos. It would work with Federal 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 104 CENTURY

organizations that control resources and services and convene partner agencies and programs to harmonize 

business processes with a more holistic customer-centric model. In many cases, Federal agencies already devote 

considerable resources to customer experience, and these existing efforts will benefit from more end-to-end 

visibility into customer needs and access to broader perspectives and tool sets. Further, this capability will 

support the U.S. Digital Service (USDS) and other information technology modernization efforts by evaluating 

how Federal services are delivered and identifying priority opportunities to leverage technology to make service 

delivery more customer-centric and efficient. Not only has this approach been proven to improve services 

in the private sector, but it also offers opportunities to reduce overlap and fragmentation and reduce costs.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The application of these tools and approaches has been proven in the private sector. Leading practice in 

the private sector now trends to having an individual Customer Experience Officer reporting directly to the 

CEO, supported by teams that both advocate for customer needs at an enterprise level as well as embed 

practices into individual business units across the organization. These CX organizations have developed 

a clear set of standards, tools, and capabilities – such as the use of personas and customer journey maps 

– and have demonstrated their utility across diverse organizations and industries. 

Applying these tools and capabilities to the Government has also been proven to work. Through USDS and 

GSA’s Office of 18F, the Government has recruited top-tier talent in information technology and business 

process re-engineering. These individuals are helping the agencies that serve customers incorporate 

user-centered design into plans to modernize digital services – and demonstrating those investments yield 

a high return. For example, for many years small business owners have been extremely frustrated by slow, 

bureaucratic, paper-based processes at the Small Business Administration (SBA) that were not responsive to 

their needs. Due to the USDS team at the SBA, small businesses can now apply for Government Contracting 

Programs online in about 1 hour instead of days. They can also secure key information on locating their 

business by using a mapping application that updates in near real-time. 

Further, individual agencies have developed enterprise-level customer experience capabilities that are 

delivering direct results to citizens, such as the Journeys of Veterans Map, which has become the centerpiece 

of the Department of Veterans Affairs’ (VA) success in presenting one face to veterans. For example, 

veterans have historically had a frustrating experience navigating over 1,000 VA phone numbers and more 

than 1,770 VA contact centers across its many lines of business. To address this challenge, VA is now in the 

process of integrating backend data systems and providing veterans a single front door. It estimates that 

these efforts will produce a cost avoidance of approximately $2 billion dollars over five years while also 

improving veterans’ experiences.

This proposal envisions building on these individual efforts by adding the capability to tackle customer 

experience challenges throughout the Government. To get started, this capability and relevant agencies 

will conduct research to identify the most significant opportunities for customer-centric change, develop 

customer journey maps which cross organizational silos, and then develop action plans to execute service 

improvements. As needed, agencies would partner with USDS and GSA’s Technology Transformation Service 

to enhance their digital services. One particular area of focus would likely be the creation of user-focused 

Digital Front Doors – rebuilding Government web properties to focus less on Government structure and more 

on user experience. For example Farmers.gov, designed by the U.S. Department of Agriculture, delivers the 

information, tools, and first-hand advice built around the needs of the people who produce our food, fiber, 

flora, and fuel. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 105

This capability will also serve as a central resource to better manage organizational change. Managing 

process improvements across organizations is complex, especially given the legal structures, size, and 

cultures of Federal agencies. It will partner with agency leadership to support interagency change 

management, including project planning, convening interagency meetings and facilitating collaboration, 

and sharing best practices on change management.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 106 CENTURY

Next Generation Federal Student Aid

Processing & Servicing Environment

Department of Education

Summary of Proposal: The Next Generation (Next Gen) Financial Services Environment that will 

benefit Federal Student Aid’s (FSA) customers and save taxpayer millions of dollars, will create an 

improved, world-class customer experience for FSA’s more than 42 million customers, while creating 

a more agile and streamlined operating model. FSA’s initial focus will be on modernizing capabilities 

related to the Free Application for Federal Student Aid (FAFSA®) form and the servicing and repayment 

of customer loans, with additional work to come to improve the experience throughout the student 

aid life cycle.

THE CHALLENGE 

FSA helps provide educational opportunity for more than 42 million students pursuing higher education. 

It manages one of the largest consumer loan portfolios in the country, rivaling those of major financial 

institutions. FSA’s customers deserve a world-class experience, but they do not consistently receive 

one today. Currently, customers interface with multiple brands and vendors throughout the student 

aid life cycle, creating a disjointed experience. Further, customers want additional capabilities and 

functionalities to enable them to make more informed decisions and make their loan experience easier 

and more accessible. The current student loan servicing environment is a major barrier to FSA’s ability 

to provide outstanding service to borrowers and taxpayers.

THE OPPORTUNITY 

The Department of Education is pursuing a new approach to FSA processing and servicing with a 

modernized, innovative, and integrated architecture that will benefit FSA’s customers and save taxpayers 

millions of dollars. The Next Gen Financial Services Environment will create an improved, world-class 

customer experience for FSA’s more than 42 million customers, while creating a more agile and streamlined 

operating model.

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The Next Generation Processing and Servicing Environment is being designed to meet customer expectations, 

improve how customers consume services and utilize different technology and media platforms, and 

further enhance borrower protections. The new system requires the separation of database housing, 

system processing, and customer account servicing so that cost efficiencies can be achieved and current 

state-of-the-art technologies can be deployed and evolve in the future. Through this market research, 

FSA has refined its strategy to implement the Next Generation Processing and Servicing Environment.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 107

Based on this research and discussions with a broad range of internal and external experts in student 

loan finance and information technology services, the Department has developed a plan for a Next 

Generation Financial Services Environment that will leverage best-in-business technology to improve 

customer experience and outcomes and drive savings for taxpayers by reducing FSA administrative 

costs. The key to this transformation will be a comprehensive, Department of Education-branded 

customer engagement layer that will create an environment through which the Department’s customers 

will receive clear, consistent information and readily accessible self-service options at every stage of 

the student aid lifecycle. FSA will emphasize a mobile-first, mobile-complete strategy – enabling and 

encouraging customers to fulfill all their needs on mobile devices – complemented by web, phone, chat, 

and in-person capabilities.

This engagement layer will foster a life-long relationship with customers, from before they apply for 

aid as high school students through when they plan for their children and grandchildren’s education. 

It will transform FSA into a trusted source of information and greatly simplify the process of helping 

customers choose the best options to help them manage their student debt. In addition, the creation of 

standardized systems, processes, and procedures—combined with the inclusion of clear performance 

expectations tied wherever possible to explicit contract incentives and disincentives—is expected to 

simplify oversight of vendor performance and better ensure compliance with consumer protection and 

customer service standards.

The Next Generation Financial Services Environment would provide customers a seamless, world-class 

experience with FSA from application through repayment, a mobile-first, mobile-complete experience 

that allows customers to seamlessly interact with FSA to make informed decisions about their educational 

experience, and improved back-end technology and operations, to allow FSA to innovate how it interacts 

with customers and the types of products and services it can offer.

FSA plans to leverage the latest in middleware, processing, data storage, and security to create a 

more efficient, cost-effective, and secure technical infrastructure. While Federal student loans are 

uniquely complex, the Department believes that leveraging modern commercial engagement and 

technical capabilities is likely to reduce FSA’s operating costs over the long-term, once the solution 

is fully implemented.

FSA has issued and will continue to issue solicitations focused on account processing and loan servicing 

in 2018. Significant customer-facing milestones will be realized throughout 2019. The Department plans 

to have significant elements of the Next Generation Financial Services Environment in place prior to the 

expiration of the current servicing contracts in 2019. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 108 CENTURY

Solving the Federal Cybersecurity

Workforce Shortage

Department of Homeland Security and the Office of Management and Budget

Summary of Proposal: The Federal Government struggles to recruit and retain cybersecurity 

professionals due to a shortage of talent along with growing demand for these employees across 

the public and private sectors. The Department of Homeland Security (DHS) and the Office of 

Management and Budget (OMB), working in coordination with all Federal departments and 

agencies, will establish a unified cyber workforce capability across the civilian enterprise. This 

Administration will work towards a standardized approach to Federal cybersecurity personnel, 

ensuring Government-wide visibility into talent gaps, as well as unified solutions to fill those gaps 

in a timely and prioritized manner.

THE CHALLENGE 

The Federal Government struggles to recruit and retain cybersecurity professionals due to a shortage of, 

and growing demand for, cybersecurity talent across the public and private sectors. The workforce shortage 

compounds the Government’s challenges in responding to a constantly evolving threat environment and 

achieving its many IT-dependent missions. 

In the past, each Federal department and agency was responsible for addressing its own cybersecurity 

workforce gaps independently, which has led to disaggregated and redundant Federal programs. 

As a result, the Government lacks a comprehensive, risk-derived understanding of which cybersecurity 

skillsets the Federal enterprise needs to develop and which positions are most critical to fill.

Moreover, the manner in which departments and agencies recruit, hire, train, retain, and compensate 

cybersecurity personnel varies by agency. This uneven approach has created internal competition for 

talent, which in turn creates disparities and discontinuities that degrade agencies’ ability to defend 

networks from malicious actors and respond to cyber incidents. A unified approach to attracting and 

retaining cybersecurity talent within the Federal Government would better support the Government’s 

cybersecurity enterprise.

Finally, there have not been continuous, strategic investments made in U.S. education programs to 

strengthen a pipeline for future cybersecurity talent. The abundance of redundant Federal programs 

focused on strengthening cybersecurity education illustrates how the Government’s role building the 

cybersecurity talent pipeline remains ill-defined. 

THE OPPORTUNITY 

This Administration can strengthen Federal cybersecurity and improve agencies’ ability to carry out their 

missions by identifying and closing workforce gaps in the near term, and can ensure long-term viability 

by building the cybersecurity talent pipeline.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 109

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

To improve recruitment and retention of highly qualified cybersecurity professionals to the Federal 

Government, this Administration will develop a standardized approach to identifying, hiring, developing, 

and retaining a talented cybersecurity workforce in a timely and prioritized manner.

In the near term, this Administration will prioritize and accelerate on-going efforts to reform the 

way that the Federal Government recruits, evaluates, selects, pays, and places cyber talent across 

the enterprise.

Taking Stock of the Current Cybersecurity Workforce and Identifying Gaps

Human Capital personnel from across the Executive Branch are currently working with the Office of 

Personnel Management (OPM) to categorize the Federal cybersecurity workforce, using the National 

Initiative for Cybersecurity Education Cybersecurity Workforce Framework (NICE Framework, as required 

by the Cybersecurity Workforce Assessment Act of 2015). By Fall 2018, the Federal Government will have 

catalogued the entire cybersecurity workforce to better understand our current set of knowledge, skills, 

abilities, and identify any gaps; this catalog will give us Government-wide insight into where our most 

pressing needs are, and, for the first time, enable the development of an enterprise-wide approach to 

the recruitment, placement, and training of cybersecurity talent.

Using the NICE Framework analysis, the Federal Government will be able to determine which workforce 

gaps are most critical to address the current cybersecurity threat landscape. DHS, as the lead agency for 

the protection of Federal IT networks, is best positioned to drive this prioritization with Federal agencies 

and OMB. By the first quarter of Fiscal Year (FY) 2019, all CFO Act agencies, in coordination with DHS and 

OMB, will develop a list of critical vacancies across their organizations. By the end of FY 2019, all CFO and 

non-CFO Act agencies will have a prioritized list of critical vacancies. OMB and DHS will analyze these 

lists and work with OPM to develop a whole-of-government approach to identifying or recruiting new 

employees or reskilling existing employees in FY 2019.

Developing Innovative Recruitment, Retention, and Mobility Strategies

As agencies prioritize their cyber workforce needs, they will likely need to adopt innovative hiring 

techniques to ensure the best and brightest cyber talent can seamlessly enter the Federal Government. 

To address this challenge, the Department of Homeland Security received authority, through the 2014 

Border Patrol Pay Reform Act, to modernize the traditional personnel system. With this new authority, 

DHS is working to create a new Federal hiring system called the Cyber Talent Management System 

(CTMS), exempting DHS from many of the requirements and restrictions in existing law under Title 5 for 

hiring and compensation of cybersecurity professionals. With an agile and innovative personnel system, 

DHS will be better equipped to compete for cyber talent with the private sector—speeding up the hiring 

process, attracting talent from non-traditional educational backgrounds, using innovative tools to assess 

applicants, and offering more flexible performance-based compensation. DHS will also be able to align 

prospective cybersecurity talent to the most pressing cybersecurity needs and will allow these technical 

professionals to accelerate their careers as rapidly as their aptitudes allow. In order to implement CTMS, 

by the first quarter of FY 2019 OMB, through its Office of Information and Regulatory Affairs (OIRA), will 

work with DHS to promulgate the necessary regulatory notices. By the end of FY 2019, DHS will work 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 110 CENTURY

with OMB and all Federal agencies to measure the performance of CTMS and determine how to expand 

the system so that all departments and agencies can leverage it to address their personnel gaps.

One of the main hindrances to a seamless entry into the Federal Government is the security clearance 

process. The success of this initiative partly hinges on the success of the Government’s security clearance 

reform initiative, as discussed in a separate Executive Branch reorganization proposal in this Volume. In 

addition to the Government-wide security clearance solution, OMB, DHS, and OPM will work with agencies 

to review workforce characteristics to rationalize security clearance requirements in order to expedite 

the vetting and onboarding process.

The NICE Framework Federal workforce assessment is expected to confirm what has been known for 

some time: that cybersecurity employees’ skills and competencies vary across the Government. OMB 

will consult with DHS to standardize training for cybersecurity employees, and will work to develop an 

enterprise-wide training process for Government cybersecurity employees.

As part of creating a modern hiring and compensation system that rewards cyber expertise, the Executive 

Branch should also evaluate opportunities to make cybersecurity positions more mobile than traditional 

Government jobs. Flexibilities that allow workers to easily move from one position to another, or from 

one agency to another, would appeal to cyber talent in the agile and fast-paced cybersecurity industry. 

This mobility is also useful during a major cybersecurity incident, allowing agencies to surge capacity for 

incident response activities. OMB, in coordination with departments and agencies, will develop a work 

plan to implement this initiative by the end of FY 2018. Departments and agencies will begin to exercise 

these authorities by the end of FY 2019.

As an alternative or supplement to surge capacity, a mobile workforce will allow agencies to surge 

capacity for incident response activities. OMB, DHS, and DOD will evaluate what workforce gaps might 

exist that would be needed during a major Federal cybersecurity incident to determine the requirements 

for a Federal cybersecurity reservist program. As part of this analysis, OMB, DHS, and DOD will evaluate 

the existing authorities of Federal agencies to rapidly mobilize talent, including those of the U.S. Digital 

Service, which recruits talent from the private sector. These organizations will also evaluate the feasibility 

of extending a reservist program to support non-Federal major cybersecurity incidents within the United 

States, such as those affecting critical infrastructure. These programs will be coordinated with existing 

cyber services, including those in the National Guard.

Reskilling Employees to Fill High-Value Cybersecurity Roles

In addition to hiring new cybersecurity talent, the Government must look for opportunities to maximize 

the potential of its existing workforce. This includes efforts to reskill employees whose skills have become 

less relevant due to automation. OMB, DHS, and OPM will build aptitude and skills assessments to 

identify and select current Government staff who can be reskilled to fill critically-needed cybersecurity 

jobs. By reskilling the current workforce, agencies will be able to quickly shift its workforce into the 

highest-priority vacancy gaps. OMB and DHS will establish a job reskilling work plan by the first quarter 

of FY 2019. OMB and DHS will then update the CIO Council on a quarterly basis on the implementation 

of the reskilling work plan.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 111

Building a Pipeline of Cybersecurity Talent

While solving the immediate needs of the Federal workforce is a major challenge, the Administration 

will also work to educate America’s youth to build an enduring cybersecurity talent pipeline. As part of 

the FY 2020 Budget development process, OMB will evaluate options to rationalize the size and scope of 

current Federal cybersecurity education programs, including the National Science Foundation (NSF)’s 

CyberCorps, the Scholarship for Service program, the National Security Agency (NSA)/DHS Centers for 

Academic Excellence program, NSF and NSA’s GenCyber Program, the Department of Labor’s apprenticeship 

program, DHS’s Cybersecurity Education and Training Assistance Program, the U.S. Army Cyber Center 

of Excellence, and the U.S. Navy Information Operations Command program, among others.

While the cybersecurity workforce shortage has been a known challenge for Federal agencies, no other 

Administration has taken a whole-of-Government approach to fixing it. OMB and DHS look forward to 

solving this major challenge through smart analysis and creative solutions. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 112 CENTURY

The GEAR Center

Government-wide

Summary of Proposal: This proposal would establish a public-private partnership to help 

the Government respond to innovative technologies, business practices, and research findings 

that present opportunities to improve mission delivery, services to citizens, and stewardship of 

public resources. The Government Effectiveness Advanced Research (GEAR) Center would be a 

non-governmental public-private partnership that would engage researchers, academics, non-profits, 

and private industry from disciplines ranging from behavioral economics, to computer science, to 

design thinking to use creative, data-driven, and interdisciplinary approaches to re-imagine and 

realize new possibilities in how citizens and Government interact.

THE CHALLENGE 

Most Federal Government entities and programs were designed many decades ago, while still others 

have their organizational roots aligned to the missions of the 19th Century. Their designers could not 

have anticipated how technology and society would evolve or how the mission demands on the Federal 

Government would evolve in the 21st Century. Government has also been slower than the private sector 

to adapt operations to new realities. The bottom line is that the Government has fallen behind the curve, 

with reported decreases in trust1

1 Pew Research Center, May, 2017, “Public Trust in Government Remains Near Historic Lows as Partisan Attitudes Shift.” 

 and lower customer satisfaction2

2 https://www.theacsi.org/news-and-resources/customer-satisfaction-reports/reports-2017/acsi-retail-report-2017.

. The inability to keep pace with the 

private sector on adoption of technology has likely contributed to these failures to meet expectations as 

well as inefficient use of resources. This proposal makes progress toward a future vision of a more efficient 

and effective Government that provides a level of service that citizens deserve.

Although disparate research is available in the public and private sector, there is little work directed 

toward providing a forward-looking view on how the operating entities of Executive Branch should 

evolve management practices for the 21st Century. The Executive Branch currently lacks the capability 

to work with State and local governments, businesses, and institutions of higher education to assess the 

long-term strategic needs of the Government enterprise, and to “test and learn” how to apply innovative 

approaches to meeting the mission, service and stewardship needs of the 21st Century. This capability 

is needed to effectively apply theory to practice in a low-risk environment.

THE OPPORTUNITY 

The GEAR Center would be a public-private partnership bringing together experts from disciplines 

ranging from behavioral economics, to computer science, to design thinking, in order to take a creative, 

data-driven, and interdisciplinary approach to imagining and realizing new possibilities in how citizens 

and government interact.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 113

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

3 The America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act 

of 2007 or America COMPETES Act was signed by President George W. Bush and became law on August 9, 2007. This 

was an Act, “To invest in innovation through research and development, and to improve the competitiveness of the 

United States.” On January 4, 2011, President Barack Obama signed into law the America COMPETES Reauthorization 

Act of 2010.

To establish the GEAR Center, the General Services Administration (GSA) could, for example, issue a new 

Challenge under the America COMPETES Act3

, and as a parallel effort, issue a Request for Information 

(not leading to a traditional contract but to get more information on the art of the possible) to maximize 

input from the public, universities, and industry to show transparency while promoting innovation from 

the largest group possible. 

New “Challenges” under the America COMPETES Act provide agencies with the authority to conduct 

prize competitions to spur innovation, solve tough problems, and advance their core mission. Prize 

competitions under this new statute may be funded jointly by more than one agency and by the private 

sector. These challenges can be monetary or non-monetary, and they allow for multiple phases of 

engagements, ideations, and competitions. The America COMPETES Act authority offers a flexible and 

fast method to obtain input from a wide swath of the public, including industry, non-profits, universities, 

and other entities. 

Based on the results of the Challenge, the GEAR Center could be established at a university, think tank, or 

other prominent research institution as a public-private partnership to inform critical areas for programs 

and services to meet the needs of the American public. The GEAR Center would call upon researchers, 

academics, non-profits, and private industry to help test hypotheses, rapidly prototype new strategies 

and models, and help the Government anticipate and respond to changes in technology with implications 

for service to citizens and Government mission.

The Center would provide the Federal Government with the opportunity to not only catch up to where 

the private sector services and capabilities are today, but to lay the groundwork for where Government 

operations and services need to be in five, 10, or 20 years or more by bringing together researchers, 

academics, non-profits, and private industry to inform leaders in the Federal Government of the future 

delivery models for programs and services that meet the needs of the American public. This Center will 

enable the testing of hypotheses and shape future direction in order to help the Government anticipate 

and respond to changes in technology and society with implications for how the Government can better 

serve its citizens. For example, the GEAR Center could examine the impacts to Government that are 

likely to occur due to broader economic forces (e.g., self-driving cars, automation), improving service in 

programs that rate the worst in terms of public feedback (e.g., immigration system, farmers), and exploring 

strategies to leverage Big Data and manage data as an asset across Government silos. 

Developing this capacity supports innovation as an engine to transform the public’s experience with 

Government. Researchers will validate and/or develop improved ways to serve the needs and desires of 

the customers of Government services, and rethink the experience of Government-public interactions. 
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 114 CENTURY

Further, the GEAR Center would provide capacity to explore questions concerning how Government 

can best harness technological advances to address evolving challenges concerning citizen interactions 

with the Government, Federal workforce skill/reskilling requirements, the leveraging of Big Data, and 

collaboration with the private sector via grant-making, procurement and public-private partnerships. 

In addition, it would explore opportunities to better integrate public and private sector innovative fee for 

service and co-investment models to ensure that infrastructure for the digital age receives appropriate 

investments and attention. 
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 115

 Transfer of Background Investigations from the 

Office of Personnel Management to

the Department of Defense

U.S. Office of Personnel Management and Department of Defense

Summary of Proposal: That the National Background Investigations Bureau (NBIB), currently under 

the Office of Personnel Management (OPM), be transferred to the Department of Defense (DOD).

THE CHALLENGE 

The placement and performance of background investigations for the Executive Branch has been an 

evolving and open issue for years. 

• In October 2016, the National Background Investigations Bureau (NBIB) was established to succeed 

the Office of Personnel Management’s (OPM) Federal Investigative Services (FIS). The NBIB absorbed 

the FIS’s background investigation capabilities, inventory, and operational challenges, and began 

the conduct of background investigations for 95 percent of Executive Branch agencies. 

• In August 2017, an implementation plan was provided to the Congress for DOD to conduct background 

investigations for DOD personnel, pursuant to the National Defense Authorization Act (NDAA) for 

Fiscal Year 2017 (P.L. 114-328). 

• In December 2017, the NDAA for Fiscal Year 2018 (§925(b) of P.L. 115-91) was enacted into law, 

legislating a phased transfer of DOD background investigations conducted by NBIB from NBIB to DOD. 

The pending transfer of DOD Investigations from NBIB comprises 70 percent of NBIB’s background 

investigation volume and raises questions with Government-wide implications regarding the remaining 

30 percent. With no easy or obvious answers regarding the placement of the 30 percent, the Security, 

Suitability, and Credentialing Performance Accountability Council (PAC) principal agencies (OPM, DOD, 

the Office of Management and Budget, and the Office of the Director of National Intelligence) initiated 

an interagency review to determine a path forward. 

THE OPPORTUNITY 

This proposal would transfer the NBIB background investigation program, currently under OPM, to 

DOD. The transfer provides the opportunity to achieve an efficient, effective, fiscally viable, and secure 

operation that meets all agencies’ needs. It avoids a variety of potential problems inherent in splitting 

the existing program into two pieces, and provides the means to achieve bold, transformative reform 

in the manner in which background investigations are conducted. The opportunity exists to improve 

timeliness, strengthen management of sensitive information and ensure a more trusted workforce.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 116 CENTURY

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The Administration recognizes that background investigations are critical to enabling national security 

missions and ensuring public trust in the workforce across the Government. The congressionally mandated 

transfer of 70 percent of NBIB’s background investigation caseload has significant implications for the 

conduct of background investigations Government-wide. Additionally, the mandate comes at a time when 

significant challenges in security, suitability, and credentialing processing continue to adversely affect 

Government operations. The background investigation inventory has risen to approximately 725,000; 

the average Top Secret background investigation takes four times longer than the target completion 

date; and costs have risen more than 40 percent since Fiscal Year 2014. This is an unsustainable way to 

do business.

Now is the time for bold, transformational change in how we vet our workforce. To that end, the 

Administration has concluded that to achieve an efficient, effective, fiscally viable, and secure operation 

that meets the needs of the Executive Branch, it is necessary for the background investigation program 

to remain consolidated through a complete transfer of NBIB to DOD. Given the urgency and complexity 

of the issue, the Administration believes this transfer is the right thing to do because:

• Consolidation retains “economies of scale”. Keeping the program together prevents unnecessary 

duplication of functions (e.g. headquarters, back office, etc.), removes operational complexity, and 

provides increased opportunities for centralization and specialization that will increase continuous 

process improvement benefits. 

• Residing within DOD facilitates better leveraging of DOD’s existing enterprise capabilities. DOD 

already provides capabilities to the enterprise by servicing industrial security clearances for 

31 agencies through the National Industrial Security Program, and manages adjudications for four 

agencies through the DOD Consolidated Adjudications Facility. DOD already has strong, established 

research and training programs under the Personnel and Security Research Center and Center 

for Development of Security Excellence, is developing continuous evaluation capabilities that will 

benefit non-DOD agencies, and has a global footprint that is well-suited to the increased need for 

international contact and employment investigations. Drawing on significant national security, IT, 

and cybersecurity expertise, DOD is also responsible for designing, building, securing, and operating, 

a suite of end-to-end vetting shared services to be made available to all Executive Branch agencies.

• Truly bold and transformational reforms are more achievable through consolidation. Despite 

improvements, the Federal government’s vetting policies, processes, and tools, have failed to 

keep pace with emerging technological capabilities and opportunities to continuously identify, 

assess, and integrate key sources of information. Reform initiatives chartered by the Security and 

Suitability/Credentialing Executive Agents are underway to revamp the fundamental approach 

and supporting policy framework, overhaul the business process, and modernize the information 

technology architecture. Implementation of these reforms across a single, consolidated provider 

can best serve the sustainment of a trusted workforce for the Nation.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 117

The Administration will take the requisite executive actions to ensure the background investigation 

program remains consolidated within DOD. Transition planning and implementation over the next 

several years will be critical to success and will involve interagency cooperation and coordination. The 

PAC will provide oversight of that transition, and will continue to be accountable for ongoing reform of the 

broader Executive Branch vetting program, including background investigations. The existing Security 

Executive Agent (the Director of National Intelligence) and Suitability and Credentialing Executive Agent 

(the Director of OPM) will continue to fulfill their respective policy and oversight roles for the security, 

suitability, and credentialing enterprise.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 118 CENTURY

Strengthening Federal Evaluation

Government-wide

Summary of Proposal: Bringing evidence to bear in decision-making is a critical component of good 

government. However, there are large gaps and inconsistencies across Federal agencies in their 

ability to formally evaluate their programs. These reforms would expand upon existing capabilities 

and push agencies to adopt stronger practices that would generate more evidence about what works 

and what needs improvement in order to inform mission-critical decisions and policies.

THE CHALLENGE 

Decisions about how best to allocate taxpayer dollars and improve government services involve a complex 

set of factors, including political priorities, resistance to change, and the availability of credible evidence. 

In many policy domains, however, we lack key information on program effectiveness that could help the 

Congress and the President make better decisions. Program evaluation is a valuable tool that can help 

us learn what works in order to focus limited funding on effective programs, discontinue programs that 

fall short of desired results, and identify ways to improve continually funded programs. For example, 

a decade of rigorous evaluations of the Maternal, Infant, and Early Childhood Home Visiting Program 

demonstrated positive impacts and future savings that warranted scaling up the program. In contrast, 

Project D.A.R.E., a substance abuse prevention program for adolescents, lost all Federal funding following 

several high-quality evaluations that determined the program was ineffective and in some cases had 

negative effects.

These examples illustrate how, absent program evaluation, we would not know whether what we think 

works, does in fact work. Yet, building evaluation into program design so that we can learn and improve 

is currently the exception rather than the rule, and there are no formal Government-wide incentives, 

expectations, or guidance to Federal agencies regarding program evaluation. We must increase the 

capacity of Federal agencies to conduct evaluation and fill a critical gap in the Federal government’s 

ability to generate evidence about what works and how we can improve programs. This will lead to 

more and better information that the Congress and the President can use to make decisions about how 

to best spend taxpayer dollars and provide services for our citizens.

THE OPPORTUNITY 

Passage of the Foreign Aid Transparency and Accountability Act of 2016 set an important precedent that 

our Nation must have expectations for monitoring and evaluating foreign assistance programs. OMB’s 

guidance for these programs (see M-18-04) was a first step, but there is much more that can be done 

across Government. We must set standards for evaluation across all program activities and agencies so 

that Federal agencies, OMB, the Congress, and taxpayers have critical information about the effectiveness 

of Government programs and policies, which will lead to improved services, increased efficiencies, and 

a greater return on investment.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 119

WHAT WE’RE PROPOSING AND WHY IT’S THE RIGHT THING TO DO

The Congress is increasingly compelling agencies to focus funding on evidence-based programs that we 

know work. Executing this vision requires evaluation to answer essential questions regarding program 

effectiveness and cost-efficiency that cannot be answered through performance measurement, statistics, 

or data analytics alone. Unlike Federal statistical and performance functions, there is currently no 

formal Federal system or underlying infrastructure to support evaluation. As a result, there are many 

programs and policies across the Government for which we have no evidence on program effectiveness, 

thus making evidence-based policymaking difficult. 

If we expect agencies to test innovative strategies and execute effective programs, we must enhance 

Federal agencies’ ability to conduct program evaluation and other evidence-building activities. 

The bipartisan Commission on Evidence-Based Policymaking’s recommendations and subsequent draft

legislation would further these goals. However, many of the necessary improvements can be accomplished 

administratively. Doing so will require a change in Federal agencies’ cultures and standard operating 

procedures so that program evaluation is integrated into program design, and evaluation experts are 

part of decision-making processes. 

We must strengthen the role of program evaluation and better understand how we are investing in 

evaluation across the government. At minimum, OMB intends to ask Federal agencies to:

• Designate a senior official responsible for coordinating the agency’s evaluation activities, learning 

agenda, and information reported to OMB on evidence. This official must have expertise and 

experience in program evaluation, which is a different skill set than performance, statistics, and other 

agency functions. One approach that has worked well in some agencies is to create a centralized 

independent evaluation office and designate a senior career official to lead this office who is given lead 

responsibility for evaluation at the agency. Other agencies have multiple sophisticated evaluation 

offices serving different components. 

• Document the resources dedicated to program evaluation. If taxpayers, the Congress, or the 

Administration were to ask how much is currently spent on program evaluation, we would not be able 

to state an amount nor easily calculate a reasonable estimate. Absent this information, we cannot 

know where our investments in evaluation are adequate and where we are under- or over-investing.

We must also strengthen the Government’s ability to build and use a portfolio of evidence, including 

results from program evaluations, to inform decision-making. To do this, OMB will provide direction and 

set expectations that encourage agencies to: 

• Strengthen the quality of the information provided to OMB on evidence-building activities, 

including program evaluation, as part of the annual budget process. Currently, agency submissions 

vary greatly in quality and completeness. If improved, however, they could be a useful way for 

OMB to understand agencies’ current and planned evidence-building activities, the evidence 

base behind key priorities, and evidence gaps that should be addressed. By designating a senior 

official at agencies with relevant experience responsible for this submission, OMB expects the 

quality and breadth of submitted information will improve and better inform the budget and 

policymaking processes.
DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 120 CENTURY

• Establish and utilize multi-year learning agendas. Learning agendas are a powerful tool that allow 

Federal agencies to strategically plan evaluation and other evidence-building activities over a 

multi-year period. The structured agenda setting process requires coordination within an agency 

to identify priority research questions and knowledge gaps. Learning agendas should be informed 

by key stakeholders and the public, and the resulting documents should be made available to the 

public to promote transparency and accountability. The studies, evaluations, and other learning that 

results from these agendas should be shared within the agency and with other stakeholders, OMB, 

the Congress, and the public in order to facilitate policy and program improvement.

A broad consensus has emerged regarding the importance of evaluation as a key part of evidence-based 

policymaking. We acknowledge the potential risk that establishing a more formal structure for Federal 

evaluation could introduce administrative rigidity and complexity in ways that may detract from innovation 

in the small number of agencies already excelling in this area. During implementation, however, we 

could mitigate this risk by allowing appropriate flexibility, recognizing the unique circumstances and 

capacities of various agencies, and soliciting input from stakeholders both inside and outside of the 

Federal Government.
REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 121

“Let President Trump reorganize the 

government like a business.”

― Michelle

Delaware
APPENDIX: AGENCY-SPECIFIC 

REFORM PROPOSALS
DEPARTMENT OF 

AGRICULTURE

Reorganizing the Agricultural Marketing Service

As part of the U.S. Department of Agriculture’s (USDA) internal 

reorganization effort, it has undertaken significant changes to the 

Agricultural Marketing Service (AMS) to improve customer engagement, maximize efficiency, and improve agency collaboration. The 

Packers and Stockyards Program, Federal Grain Inspection Service, 

U.S. Warehouse Act Program, and International Commodity Purchasing were transferred to the Agricultural Marketing Service as new 

program areas in FY 2018.

Realigning USDA’s Mission Areas

The USDA has begun realigning and consolidating certain offices 

into more logical organizational reporting structures. The realignment has included the creation of an Under Secretary for Trade and 

Foreign Agricultural Affairs, an Assistant to the Secretary for Rural 

Development (RD), and an Under Secretary for Farm Production and 

Conservation. Additionally, USDA is merging the Center for Nutrition 

Policy and Promotion (CNPP) into the Food and Nutrition Service 

(FNS). These efforts will improve service delivery by providing a 

simplified one-stop shop for USDA’s farmer and rancher customers, 

advance agricultural trade and address the needs of Rural America.

DEPARTMENT 

OF ENERGY

Streamline Environmental Management 

Headquarters Organization

This effort will review the Environmental Management (EM) organizational structure to identify opportunities to streamline the management team. EM will specifically review supervisor-to-worker ratios, 

skill gaps, and cost reduction measures such as consolidating facilities and reducing administrative support. This proposal focuses on 

completion of the EM clean-up mission in an efficient and cost-effective manner.

Consolidate International Staff Under 

Office of International Affairs

The Department is consolidating international affairs offices from 

DOE’s applied energy programs into the headquarters Office of 

International Affairs. This effort centralizes staff and resources with 

technical expertise and foreign affairs policy knowledge to advise on 

and carry out the Department’s international engagement efforts.

Merge Shared Service Centers and Other Activities

The Department continues to merge DOE’s Human Resources Shared 

Service Centers, consolidate human capital functions across the DOE 

enterprise, and merge DOE training and development functions. This 

effort will streamline processes, reduce costs, and improve services. 

Office of Science Restructuring

The Department of Energy’s Office of Science is evaluating several 

proposals to merge and consolidate field and headquarters activities 

to improve efficiency and reduce costs. Potential options for consideration include: merging geographically associated site offices; 

reorganizing the Integrated Service Centers; realigning safety and 

technical services; streamlining the Office of Science organization; 

and reducing staff and/or administration support costs.

DEPARTMENT OF HEALTH 

AND HUMAN SERVICES

Optimize National Institutes Health (NIH)

Restructure NIH’s administrative functions to ensure operations are 

effective and efficient. This initiative represents the largest change 

management initiative in the history of NIH, and will align management with best practices and break down administrative silos 

through standardization of structures and processes agency-wide.

Consolidate Health Research Programs into 

National Institutes of Health (NIH)

Integrate the research of three programs into NIH – the Agency for 

Healthcare Research and Quality (AHRQ), the National Institute for 

Occupational Safety and Health (NIOSH), and the National Institute on 

Disability, Independent Living, and Rehabilitation Research (NIDILRR) 

to improve research coordination and outcomes. These entities 

would be initially established as three new NIH institutes: the National 

Institute for Research on Safety and Quality; the National Institute 

for Occupational Safety and Health, including the Energy Employees 

Occupational Illness Compensation Program; and the National Institute on Disability, Independent Living, and Rehabilitation Research. 

NIH will assess the feasibility of integrating health services research 

activities more fully into existing NIH Institutes and Centers over time. 

Reorganize the Strategic National Stockpile (SNS) to the 

Assistant Secretary for Preparedness and Response (ASPR)

Restructure the SNS from Centers for Disease Control and Prevention 

to ASPR to consolidate strategic decision making around the development and procurement of medical countermeasures, and streamline 

operational decisions during responses to public health and other 

emergencies and improve responsiveness. This reorganization is 

intended to enhance enterprise effectiveness by more fully integrating 

the Stockpile with HHS’ other preparedness and response capabilities. 

DEPARTMENT OF HOMELAND 

SECURITY

DHS Air & Maritime Programs

This proposal would identify efficiencies and budgetary savings 

to be achieved by eliminating unnecessary duplication between 

U.S. Customs and Border Protection and U.S. Coast Guard air and 

maritime programs. This could include facility consolidation, standardized data, enhanced domain awareness and coordination, and 

common future capability requirements.  

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 123
Coordinated Operations, Planning & Intelligence

This proposal will evaluate how DHS headquarters and components 

will produce information and intelligence that is comprehensive, current, coordinated, operationally-focused and analytically-defensible, and increase the effectiveness of coordinated operational plans 

and policies. DHS’s Office of Intelligence and Analysis, the Office of 

Strategy, Policy and Plans, and Office of Operations Coordination 

will explore areas such as analysis overlap, duplication and/or fragmentation; joint and integrated strategies and operations; common 

operating picture (COP) and alert warning; and operations centers 

overlap, duplication and/or fragmentation.

National Bio and Agro-Defense Facility 

(NBAF) Transfer from DHS to USDA

This FY 2019 Budget proposal would transfer operational responsibility for the National Bio and Agro-Defense Facility (NBAF) from DHS’s 

Science and Technology Directorate (S&T) to USDA’s Agricultural 

Research Service (ARS) in FY 2019.  DHS would finish the construction 

and commissioning of the laboratory facility, while USDA would operate the facility in the future.

Organizing Headquarters Functions

This proposal would identify how DHS Headquarters can more 

effectively align Business Support and Mission Support functions to 

support Homeland Security mission delivery by enabling: (1) strategic governance, oversight, policymaking, and internal and external 

coordination; and (2) strengthening service and delivery of the business support and mission support functions to the Department.  In 

tandem, the DHS Management Directorate is advancing agency-wide 

initiatives such as field efficiencies, modernizing financial systems 

and processes, and SOC consolidation.

DEPARTMENT OF HOUSING 

AND URBAN DEVELOPMENT

Reform Rental Assistance

HUD is seeking legislative reforms to decades-old rent policies that 

are confusing and costly, and often fail to support HUD-assisted individuals in increasing their earnings. HUD’s Making Affordable Housing Work Act would offer public housing authorities (PHAs), property 

owners, and HUD-assisted families a simpler and more transparent 

set of rent structures to reduce administrative burden, incentivize 

work, and place HUD’s rental assistance programs on a more fiscally-sustainable path. 

Consolidate Headquarters Offices

HUD spends approximately $11.8 million per year on four leases 

within walking distance of its main headquarters at the Robert C. 

Weaver Federal building. HUD is in the process of consolidating these 

satellite offices into the Weaver building, reducing its real property 

footprint and annual leasing costs.

DEPARTMENT 

OF STATE

Modernizing IT, HR Operations, and Data Analytics

The State Department seeks to advance information technology 

(IT) modernization, including: allowing real-time collaboration; 

strengthening workforce readiness and performance management; 

and improving enterprise-wide data availability. This will involve 

enhancing data analytics to better inform decisions and investing in 

and implementing cloud technologies to allow employees to work 

more easily from any location, improve cyber security, streamline 

work processes, and consolidate duplicative systems. Cloud implementation has been underway since the end of 2017. By the end of 

March 2018, the Department had already migrated 16.6 percent of 

user mailboxes to cloud-based e-mail. This effort will also seek to 

improve connectivity between the State and United States Agency 

for International Development (USAID) IT platforms, thus ensuring 

increased collaboration and information access to improve effectiveness and efficiency.

Leadership Development and Training

The State Department seeks to enhance leadership training and 

development opportunities. To this end, the Foreign Service Institute is working to modernize and expand formal leadership training 

for all levels of the workforce and is implementing a program of midlevel leadership projects. The Leadership Advisory Board is reviewing the Department’s Leadership and Management Principles and 

promoting leadership development activities more broadly.

Special Envoys

The State Department is integrating selected envoys and special 

representative offices into the regional and functional bureaus, and 

eliminating those envoys and representatives that have accomplished their original purpose, or have overlapping roles and 

responsibilities. This effort will empower regional and functional 

bureaus’ policy direction, provide clarity in reporting authority, and 

strengthen communication channels. In consultation with the Congress, 17 such offices are being realigned as of May 2018.

Enhance Global Presence and Policy Processes

The State Department seeks to improve oversight of the U.S. Government’s global presence under Chief of Mission authority, including 

enhanced interagency coordination to foster increased collaboration 

and oversight. The goal is to ensure the most efficient allocation of 

personnel consistent with U.S. interests around the world. State and 

USAID will work together to advance targeted reforms in this area, 

where changes are mutually reinforcing and can be effectively synchronized to maximize benefits as appropriate.

Enhance Operational Efficiencies

The State Department is examining ways to enhance human 

resources service delivery in order to simplify processes and reduce 

wasted time. Enhancements will also strengthen real property management both domestically and overseas, and achieve efficiencies 

in our acquisitions process to improve service delivery. State and 

USAID will work together to advance targeted reforms in this area, 

where changes are mutually reinforcing and can be effectively synchronized to maximize benefits as appropriate.

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 124 CENTURY
DEPARTMENT OF 

THE INTERIOR

Aligning DOI Regions Across Bureaus

The Department of the Interior (DOI) seeks to establish common 

regional boundaries for its bureaus and offices to provide better 

coordination across the department, focus resources in the field, and 

ultimately, improve mission delivery. Currently, each DOI bureau 

manages its responsibilities using regional structures that follow 

different geographical boundaries. This inconsistency slows coordination between DOI bureaus and offices, other Federal agencies, and the 

American public that DOI serves.

Improving Efficiency through Shared Services

DOI is working to collocate bureau offices wherever possible and 

to emphasize the use of shared administrative support services 

across its organizational units. This will drive more efficient use of 

resources and ensure employees within each region and at the local 

level receive adequate support. Better utilization of the Interior 

Business Center (IBC) and DOI’s consolidated Financial and Business 

Management System (FBMS) will also further these objectives.

DEPARTMENT OF 

THE TREASURY

Consolidate Alcohol and Tobacco Enforcement at Treasury

The FY 2019 Budget proposes to transfer all alcohol and tobacco 

responsibilities from the Department of Justice’s Bureau of Alcohol, 

Tobacco, Firearms and Explosives (ATF) to Treasury’s Alcohol and 

Tobacco Tax and Trade Bureau (TTB). This transfer would leverage 

TTB’s resources and expertise relating to the alcohol and tobacco 

industries and allow ATF to continue to focus on its firearms and 

explosives mandates, enabling both agencies to more efficiently and 

effectively carry out their core missions of protecting the public.

DEPARTMENT OF 

TRANSPORTATION

Shared Services

The Department of Transportation (DOT) is taking a comprehensive look at implementing a shared services model for acquisitions, 

human resources, information technology, and motor vehicle pools 

across the Department. DOT is also working to consolidate office 

space and leases. 

OST Streamlining

DOT is committed to rightsizing the Office of the Secretary (OST), 

which plays a critical role in overseeing DOT’s Operating Administrations (OAs). To better support the OAs, offices and positions will be 

consolidated in areas such as research and development.

Workforce Development

DOT workforce development grants will be transferred to the new 

Department of Education and the Workforce to centralize workforce development policy and to deliver more efficient and effective outcomes.

DEPARTMENT OF

VETERANS AFFAIRS

Electronic Health Record Modernization

This will transition the Department of Veterans Affairs (VA) to a new 

Electronic Health Records (EHR) system allowing for interoperability between the Department of Defense (DOD) and VA, and other 

community providers. The new system will permit efficient exchange 

of patient health information as military servicemembers transition 

from DOD to VA healthcare, and will enhance the coordination of care 

for veterans. Having a veteran’s complete and accurate health information in a single common EHR system is critical to that care, and 

to patient safety. The new EHR system will enable VA to easily adopt 

improvements in health information technology and cyber security, 

which VA’s current system is unable to do.

Community Care

To ensure veterans get the right care, at the right time, with the right 

provider, the Trump Administration and VA have worked closely with the 

Congress and Veteran Service Organizations (VSOs) to create legislation to merge all of VA’s community care efforts, including the Choice 

Program, into a single, streamlined Federal program. The new community care program will improve veterans’ experiences and healthcare 

outcomes and transform VA into a high-performing and integrated 21st

Century healthcare system for more than 9 million veteran enrollees.

Appeals Modernization

VA is undertaking an initiative to replace its current claims appeals 

process, adopted after World War I, which is slow, complex, and 

confusing for veterans to navigate. In an effort to enhance veterans’ 

experience, VA is accelerating implementation of a new system under 

which veterans have the option to submit appeals using one of three 

lanes based on their unique circumstances.

Financial Management Business Transformation

This ambitious effort will transform VA’s financial management 

business processes and systems using an integrated approach. A 

modern integrated financial management and acquisition solution will enhance transparency, data accuracy, and improve fiscal 

accountability across the department, and will provide opportunities 

to improve the care and services provided to veterans.

Legacy IT Systems Modernization

Many of the 130 legacy information technology systems that VA relies 

on to administer and deliver veteran benefits are no longer supportable, and do not meet security compliance standards or support 

new, more efficient business processes. In addition, the inability 

of these systems to interface with one another results in severe 

redundancies which, in turn, results in inefficiencies and impedes the 

department’s customer service to veterans. Collectively, modernizing legacy IT systems will streamline benefit delivery and appeals 

processing, ensure compliance with new security and accessibility 

standards, and expand veteran self-service capabilities while also 

promoting greater transparency.

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 125
ENVIRONMENTAL 

PROTECTION AGENCY

Tailoring State Oversight

The Environmental Protection Agency (EPA) will recalibrate resources 

devoted to oversight of State-delegated programs, including the role 

of EPA National Programs and Regions, and their respective levels of 

effort. EPA will recognize States as the primary implementers and 

enforcement authorities where States have authorized delegation of 

Federal environmental programs. With input from the Environmental Council of the States (ECOS) and the States, EPA will streamline, 

reduce, and tailor its oversight activities to focus on national consistency and technical assistance to States as needed.

Examining EPA Field Presence

After streamlining and tailoring State oversight activities, EPA will 

assess the best locations from which to provide key functions and 

services to customers. Some functions may be performed more 

effectively with enhanced proximity to customers, while others may 

be more efficient, but equally effective, if consolidated. EPA will 

assess owned space vs. leasing space for field operations.

Improving Management of EPA Laboratories

EPA will review the current laboratory enterprise in an effort to operate EPA’s labs in a more strategic, corporate, and efficient manner. 

This project starts with the identification and implementation of 

an enterprise-wide framework to create a more agile work environment and manage lab capabilities and capacity to meet the scientific 

demands associated with achieving the Agency’s mission more efficiently and effectively.

GENERAL SERVICES 

ADMINISTRATION

Federal Motor Vehicle Fleet Management

The Federal Government operates more than 400,000 motor vehicles, including cars, trucks, SUVs, buses, and other specialty vehicles. 

The cost of operating motor vehicles can vary widely among Federal 

agencies. The President’s Management Agenda initiative on improving mission support services includes consolidating Federal fleet 

management. This will reduce taxpayer costs and introduce efficiencies into Federal fleet management. To achieve these objectives, the 

General Services Administration will conduct studies of agency fleets 

to identify recommendations on improving fleet management. The 

study will include analysis of operational, maintenance, and inventory data to assess whether centrally leasing and managing motor 

vehicles is more cost effective than separate agency ownership and 

management of vehicles. GSA studies will also identify opportunities 

for reducing the overall size of the Federal fleet through car sharing 

or other such shared activities. 

NATIONAL SCIENCE 

FOUNDATION

Introduce Two Convergence Accelerators to 

Support Interdisciplinary Research

The National Science Foundation (NSF) will introduce two “Convergence Accelerators” that will facilitate the agency’s funding of interdisciplinary research. The Accelerators will focus on “Harnessing the 

Data Revolution” and the “Future of Work at the Human-Technology 

Frontier.” Staff, budget, and resources for the Accelerators will be 

realigned from the current directorates and offices. Accelerator 

directors will be part of the NSF scientific leadership team. With 

separate staff, budget, and resources, the Accelerators will be NSF’s 

primary units for conceiving, funding, and managing NSF-wide interdisciplinary activities in these areas.

OFFICE OF PERSONNEL 

MANAGEMENT

Implement a 21st Century Approach to Federal 

Employee Records and Data Management

The Office of Personnel Management (OPM) seeks to establish a 

secure Employee Digital Record (EDR), with as close to live updates 

as technologically feasible. By creating a permanent EDR, OPM can 

drive a data collection strategy that, among other things, collects 

employee data once and uses it many times across the employee 

lifecycle. This will reduce redundancy, inefficient and inaccurate 

reporting, costly vendor management, and incomplete data that 

creates challenges in applying modern business processes to core 

HR functions.

NUCLEAR REGULATORY 

COMMISSION

Merge the Office of New Reactors (NRO) and the 

Office of Nuclear Reactor Regulation (NRR)

The Nuclear Regulatory Commission (NRC) recognizes that a merger 

of NRO and NRR will provide flexibility and improved agility to manage uncertainties associated with the workloads in both the new and 

operating reactor business lines. As part of the merger of NRO and 

NRR, the NRC will conduct an assessment of technical review functions to identify efficiencies and eliminate redundancies.

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 126 CENTURY
SOCIAL SECURITY 

ADMINISTRATION

IT Modernization

The Social Security Administration’s (SSA) IT Modernization Plan is 

a thoughtful and deliberate multi-year agency initiative to modernize SSA’s major systems using modern architectures, agile software 

engineering methods, cloud provisioning, and shared services. 

SSA is embarking on an initiative to transform the way they design 

and build systems, and ultimately the way they work and serve the 

public. The IT modernization vision is to establish a fully integrated 

IT and Business team that delivers modern business platforms that 

improve our ability to respond more rapidly to changing needs at 

manageable costs. SSA will provide an enhanced customer experience for millions of beneficiaries across an expanded mix of service 

options in a cost effective and secure manner.

Eliminate In-Kind Support and Maintenance 

and the Holding Out Policy for SSI

This proposal simplifies administration of the Supplemental Security 

Income (SSI) program and reduces improper payments. The proposal eliminates the counting of In-Kind Support and Maintenance 

(ISM) in lieu of a flat rate benefit reduction for adults living with other 

adults. The proposal also ends the intrusive and burdensome “holding out” policy, which currently reduces benefits for couples that 

present themselves as married to the community.

Eliminate Services to Claimant Representatives

This proposal would eliminate the Federal Government as the middleman in the relationship between applicants and the representatives they voluntarily hire. It would eliminate administration of 

fee agreements, fee petitions, and claimant representative travel. 

The current workload is expensive, error prone, and not SSA’s core 

mission. In FY 2016, SSA spent about $122 million on the activity, but 

collected only about $30 million (due to a statutory fee cap) to reimburse the trust funds. The $30 million collected is not currently part 

of SSA’s administrative resources.

Establish a Consistent National State 

Disability Appeal Process

As resources permit, SSA plans to reinstate the reconsideration 

process in the disability determination services located in the 10 

prototype States. Once fully implemented, SSA can return to a single 

nationwide appellate process. This change will allow claimants to 

receive benefits sooner at a lower administrative cost. In addition, it 

will provide some relief to SSA’s hearings backlog. 

Eliminate SSI Dedicated Accounts

This proposal facilitates financial independence by eliminating 

dedicated accounts for past-due benefits to SSI youth recipients. It 

also reduces the administrative burden of monitoring expenses from 

dedicated accounts.

Implement Metrics and Quality

The proposal would implement quantity and quality metrics for 

employees across SSA. This change will provide several significant 

benefits, including: improving productivity and accuracy; ensuring that employees are fully engaged in work and can learn from 

feedback about their work; ensuring efficient and effective use of taxpayer dollars; and helping managers better address both outstanding and poor performance.

Implement Standard Office Design

SSA is improving facility design to meet business requirements and 

reduce design and build costs for offices while at the same time evaluating the security of these offices.

Additional Footprint Reduction

SSA continues to find ways to increase real property efficiency and 

reduce the size of its real property portfolio. SSA will continue to 

co-locate offices, consolidate space while merging components, and 

ensure space savings when implementing telework.

U.S. AGENCY FOR 

INTERNATIONAL DEVELOPMENT

Journey to Self-Reliance

USAID will realign its strategies, policies, and programs to more 

thoughtfully, strategically, and purposefully assist developing countries in becoming more self-reliant. USAID will reorient its relationship with partner countries by more clearly defining expectations up 

front, giving more clarity and focus to the objectives of assistance, 

and establishing tangible and meaningful goals to which partner 

countries can aspire.

Advance National Security

This USAID effort includes three components: operating more effectively in non-permissive environments; preventing violent extremism; and improving coordination with DOD.

Empower People to Lead

USAID seeks a human capital system that leverages and supports 

employees, enables a high return on investment, and supports 

workforce mobility and agility. This effort includes: management of 

human capital, workforce flexibility and mobility; knowledge management; streamlining coordinators; reviewing HR functions; and 

creating a culture of accountability and learning.

Respecting the Taxpayer’s Investments

USAID will maximize how each and every dollar of the taxpayer’s 

money is spent by developing systems and processes that allow for 

structuring USAID’s presence domestically and abroad in the most 

efficient way possible.

REFORM PLAN AND REORGANIZATION RECOMMENDATIONS 127
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PHOTO CREDITS

Cover: U.S. Department of Agriculture, 20131022-OO-AC-0007, https://www.flickr.com/photos/usdagov/10440711973/in/photolist-gUBnVp U.S. Department of Education, SAD_Hortons_Kids 104, https://

www.flickr.com/photos/departmentofed/9605581943/ Page 6: U.S. Air Force, Air Force looking to boost acquisition, cyber career fields , http://www.saffm.hq.af.mil/News/Photos/igphoto/2001668723/

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VnXVyD-V8t7od-UMHwWb-UMHvGN-V8t56C-VnXRzg-V8t37N-UMHsV5-VjrcUf Page 21: NOAA’s National Ocean Service, Port of Los Angeles, https://www.flickr.com/photos/usoceangov/9264566055/in/

photolist-f7FjHv-8xyFUo-UWM1Vs-kMjs2W-Wk1J68-ZB91yL-c6HSj1-8NgVev-abxpHP-c6HSmY-YWVLwx-nsBeXL-no5ktN-c6HSw5-VQzHJJ-ebWWRK-9qLpYT-WcSMjR-8xvxLi-JMVzn5-5ay7zo-YyS3UZ-8xvxrZoski2J-cE8cDw-8xyJWA-8xvwHc-orLQM8-8xvy1n-8xvwhz-omGzcG-8xvFBK-PphNcN-8mih9j-c6HSpW-c6HSgd-abAcbd-6WKE3E-QwxGBa-8xyKaY-hoh7kh-8xvvhT-8xyzkL-8xvyKK-9qSsqf-cYZ5Sf-8xyDyYV6ZgQn-8xvwND-8xyCHd Page 27: 5chw4r7z, Northside 4th of July Parade, https://www.flickr.com/photos/5chw4r7z/35694986026/in/photolist-Wr8ACB-V95bDE-V9xERY-JJ3vU8-WMb2eC-a1h1CU-8gZHwPVbzYjY-VvpbDK-ViLJFw-VaCgAJ-XnG2nf-f2YWJm-9ZFwNo-XqpY8x-f5Czx3-8g4Ncj-VVTNVE-Wof8Ky-afFLRd-WdNGAK-f2LU34-a1h4D9-XqpLx8-WgkdFT-VE8VM7-VdnQcg-ctGt97-ocsSYb-VVftMy-X2xwjE-a2juSFWQQk3Z-WnAB2y-Wfxgcq-JTnvjJ-9ZycsN-nVtUat-WrXThn-WnAAm5-VQUwgf-a2jC7H-WrWc3g-WoXTht-VQUvME-WE6rmx-8gctn9-fuo69V-WmDL37-WoHT9y

DELIVERING GOVERNMENT SOLUTIONS IN THE 21ST 128 CENTURY
“Reform is necessary to create more 

efficient and effective government.”

― Nick

Oklahoma
LEARN MORE 

www.whitehouse.gov/omb/management/GovReform