Covering the Front and Back Pages of the Newspaper
January 24, 2005
POLITICS: Budgeting Commerce
When Republicans took over Congress in 1995, there was much talk of abolishing Cabinet-level departments, particularly Education (an area of government that most conservatives feel shouldn't be handled at the federal level) and Energy (a Cabinet-level agency created in the hated Carter years). These hopes failed terribly, and there has not since been any serious talk of removing a Cabinet-level agency.
Which seems too bad; one would like to see somebody, somewhere, send the message that government can shrink as well as grow sometimes. But, of course, government agencies are very shrewd about entangling essential functions with those that are less so, and eliminating a department without eliminating its underlying functions wouldn't do much for the budget. Thus, the trick of finding agencies or departments that can be pulled up root and branch is harder than it sounds.
The department I've long thought should be abolished is the Commerce Department. Commerce would seem to fit perfectly the profile of a department the Right and Left could agree to do away with. Its publicly identified purpose - promotion of economic growth - is one that is quintessentially the province of the private sector. Its heads in the past (e.g., Don Evans, Ron Brown) have often been chosen primarily on the basis of their ability to raise money for the president. It caters to Big Business in ways that easily bring to mind the phrase "corporate welfare," most notably by means of the Secretary of Commerce's trade promotion trips with CEOs. And, of course, Commerce also rides the point for protectionism.
Anyway, that's what I've been saying for years, but I finally decided to take a closer look at the Commerce Department's most recent budget, for Fiscal Year 2004, as detailed in a "Budget in Brief" summary on the Commerce Department's website. Here's what I found.
1. The first thing you notice about the Commerce Department's budget, in the context of the budget at large, is how tiny it is: approximately $5.5 billion, a pittance compared to, say, the Defense Department or the Department of Health and Human Services. In fact, the incoming Secretary of Commerce, the former CEO of Kellogg's, may find this a bit of a step down - Kellogg's had sales of $8.8 billion in 2003. It wouldn't save much in terms of money, but in terms of size alone you could easily justify merging a department this size into one of the bigger departments.
2. The Bush Administration has, for the past few years, at least tried to hold the line on the Commerce budget, with the department's budget authority rising from $5.545 billion in FY 2002 to $5.519 billion (estimated) in FY 2004, with a dropoff in between in FY 2003. However, actual discretionary outlays have risen from $5.316 billion in FY 2002 to $5.791 billion in FY 2003 to $5.780 billion in FY 2004. The projected outlays only get worse, rising to $5.972 in FY 2007 and then leaping to $6.353 billion in FY 2008 due to a run-up in projected expenses at the Bureau of the Census in anticipation of the 2010 census.
3. Perhaps the most surprising thing about the Commerce Department is the breakdown of where it spends its money, best seen on page 9 of the "Budget in Brief" document. Of a $5.78 billion budget in FY 2004, $3.323 billion - (57.9%) - goes to the National Oceanic & Atmospheric Administration, which whatever its virtues has little enough to do with Big Business, per se. Although the NOAA's functions are varied, it seems to break down into two major types of functions: collecting weather, satellite and natuical data, and managing fisheries. Only the latter, which I suppose caters to Big Fish, is really business-promotion function. While I'm sure you could easily find examples of money not well spent in those areas (and there may well be good privatization arguments as to some of these functions), the "Budget in Brief" buries them fairly well in anodyne descriptions. Either way, I'd bet you didn't know that more than half of the Commerce Department's budget is dedicated to weather data and fishing.
The next largest area of Commerce's budget ($673 million, 11.7%), and also one having nothing apparently to do with commerce, is the Bureau of the Census, whose core function is required by the Constitution.
Third on the list ($652 million, 11.4% and falling - we've now accounted for more than 80% of the department's budget) is the National Institute of Standards & Technology. This one, at least, looks like a better target for budget-cutters (as it apparently has been), as its functions are described (at p. 112) in vague terms like "providing the measurements, standards, verified data, and test methods required for new technologies and competing in the global economy," "assists industry to invest in and develop high-risk, innovative technologies," "assists small manufacturing establishments in assimilating new technologies and manufacturing practices," and, my favorite, "a highly visible quality management program focused on instilling the principles of continuous quality improvement in U.S. businesses and educational and healthcare organizations." (emphasis added). All of which sounds like something that should be done by trade associations, not your (and my) tax dollars.
After that, you get better targets like the "Economic Development Admistration" ($440 million, 7.7%, down $19 million in FY 2004 after a sharp increase in FY 2003), which lists among its chief methods (at p. 36) "promoting a favorable business environment," the mischief-making "International Trade Admistration" ($370 million, 6.4%), and a bunch of smaller programs, including the Patent and Trademark Office, which actually makes money for the government (by collecting fees), turning a $366 million profit in FY 2003, $87 million in FY 2004.
4. You also have to remember what isn't there - the Small Business Administration. The SBA seems like the classic example of an agency that you would expect to find within a department devoted to the development of American commerce, but not so. It's actually structured as a stand-alone quasi-government entity outisde the purview of any Cabinet-level department, like the Postal Service or the FDIC.
Conclusion: If you are looking to cut fat from the federal government, the Commerce Department certainly seems like a potential target - but it's simply not where the big money gets spent, and wholesale elimination of its functions does not seem like a realistic goal given how much of its budget is dedicated to functions like the Census and the collection of weather data, although I would remain open to arguments on how much of the weather and fishery-management functions could be privatized.