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The Small Business Administration and the U.S. Trade Representative and assorted other agencies would be folded into the new department, while the biggest piece of the Commerce Department — the National Oceanic and Atmospheric Administration — would become part of the Department of the Interior. Obama traced its inclusion in Commerce to President Richard Nixon being angry at his Interior Secretary for criticizing his handling of the Vietnam War. And he noted that created the odd situation of freshwater salmon being regulated by Interior while saltwater salmon are regulated by Commerce — a situation that would finally be remedied.
But even that move came under friendly fire from Obama's own party. Sen. Mark Begich (D-Alaska) praised the president's larger initiative to save money but fretted that NOAA would get lost.
"I'm not sure burying NOAA in an already over-burdened Interior is a good idea," he said in a statement.
Begich said Alaska produces more than half of the nation's seafood, and "the proper management of our fisheries is vital to thousands of jobs in Alaska and to protecting this precious resource."
The name for the new department — if Congress goes along — hasn't yet been determined.
Obama said that there are other examples of inefficiency across the government, citing a dozen agencies that deal with food safety and five that deal with housing.
Obama's chief performance officer, Jeffrey Zients, told reporters that the authority is similar to authority held by presidents for 50 years until it lapsed in 1984 under President Ronald Reagan.
Zients called the proposal "a critical next step" in the administration's efforts to streamline government. The Commerce overhaul alone would save about $3 billion over 10 years — a tiny number in the grand scheme of things — but Zients said billions more in savings could be found by reorganizing the rest of the government.
The new fast-track authority would require any proposed reorganization plan to reduce the number of agencies and shrink the deficit.
In the meantime, while the White House waits for the Hill to act on its proposal, Obama said he would elevate the Small Business Administration to his Cabinet. And even after the reorganization, the trade representative would remain in the Cabinet.
Republicans said they would scrutinize the new proposals but criticized Obama for growing the government on his watch.
"So after presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it's interesting to see the president finally acknowledge that Washington is out of control," said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell (R-Ky.). "And while we first learned of this proposal this morning in the press, we'll be sure to give it a careful review once the White House provides us with the details of what it is he wants to do."
"We hope the President isn't simply proposing new packaging for the same burdensome approach. However, eliminating duplicative programs and making the federal government more simple, streamlined and business-friendly is always an idea worth exploring. We look forward to hearing more about his proposal," said Brendan Buck, a spokesman for Speaker John Boehner (R-Ohio).