The Trump Administration proposes to merge the Department of Labor and Education into the Department of Education and Workforce.
In March of 2017, President Trump signed Executive Order 13781, directing the Office of Management and Budget (OMB) to write a proposal to reorganize the government and to eliminate unnecessary agencies and program. The OMB got right to work, and in June, 2018 issued their initial report, incorporating over 100,000 suggestions from government employees and the public, as well as the agencies themselves.
The report, Delivering Government Solutions in the 21st Century, makes for fascinating reading. Its focus on efficiency and technology is difficult to dismiss through a partisan lens. Is there any American that would oppose hiring more cybersecurity professionals in government, creating mobile-based technologies to enable students to view their student loans, or improving government customer service? Probably not.
The most newsworthy item was the very first proposal in the report to merge the Department of Education (ED) and the Department of Labor (DOL) into a single Department of Education and Workforce (DEW). If completed, it would be the largest merger of government agencies since the Homeland Security Act of 2002 combined 22 different departments and agencies, including the Coast Guard, Secret Service, Customs, and Transportation Security Administration, into the massive Department of Homeland Security.
A merger of equals?
ED and DOL are two of the smallest executive departments in terms of employees, neither of which even break the Top 10. ED is the smallest agency with 3,800 employees, while DOL has 14,400 for a total of 18,200. Combined, DEW would be the 12th largest executive department, on a par with Department of Energy’s 14,200 employees. By contrast, the largest non-military agency, the Department of Justice, employs over 111,000 employees.
From a net cost perspective, however, these agencies combined would be the 8th largest agency, spending a combined $97 billion ($54 for ED and $44 for DOL). Note also that these are net costs, as ED is one of the few government agencies that has revenue, which stems from borrowers of student loans paying back the government. ED has the 4th largest revenue of any Government agency, with $31 billion in revenue. To put this in perspective, if ED were a financial services company, it would be in a similar league as American Express or Morgan Stanley.
Based purely on headcount, it would seem that Labor would be in the driver’s seat from an integration perspective. However, there is more business getting done at Education, not to mention that administrative staff is far more concentrated. I would bet on Secretary DeVos as “CEO” vs. Secretary Acosta. This seems to be reflected in DeVos leading the bureaucratic wrangling behind the proposal in the first place.
Each agency has an overwhelming number of departments, programs, and initiatives. However, if you follow the money things are pretty simple. ED provides loans and grants for college education, grants to elementary and secondary schools across the country based on financial need, and grants to subsidize support for students with disabilities. DOL makes payments to workers who become unemployed or disabled, as well as employment training, particularly for displaced workers or populations of workers (e.g. veterans) that require additional assistance.
Looking at the core functions that appear above, one core competency emerges across agencies: formulaic funding administration. College student attending an accredited degree granting institution? Ok, here’s your loan amount. Elementary school with X number of students with disabilities? Ok, here’s your grant. With over $110 billion in loan and grant disbursements, consolidating the funding and administration of these dollars makes a lot of sense.
On the other hand, the merger has been touted by OMB as a means to focus on the American workforce, presumably by streamlining employee training (DOL) and managing programs with insights gained by knowledge of the higher education landscape (ED). This seems like the tail wagging the dog, and if this is the core goal of the merger, better to just have the DOL do it themselves.
Sink or Swim?
Could this merger even happen as planned, or is this just the President’s opening gambit in the negotiation with Congress, doomed to die a slow and painful legislative death?
The short answer is, yes, it could happen, and yes, the slow and painful death has already begun. The pathway to merger approval is through the appropriations committees of the House and Senate. Each year, Congress is supposed to pass 12 appropriations bills that allocate federal funding to various government agencies. The good news is that appropriations for both DOL and ED are housed within the same appropriations bill, called the “Labor-Health and Human Services-Education and Related Agencies” bill. This means that the appropriations committees for the House and the Senate would have to both produce a compromise bill that agreed to merge the two Departments in order for the merger to proceed.
Currently, the House and Senate have both put forward their own version of the Fiscal Year 2019 appropriations bills for Labor, HHS and Education. The bad news for the Administration is that neither version includes any discussion of the proposed Merger. Senator Roy Blunt (R-Mo), Chair of the Appropriations Committee, was quoted in an interview as saying there was merit to the proposal, but insufficient support in the Senate to get the appropriations bills passed. It is the midterm election season, after all. This means we’ll probably have to wait until next Fall as we approach the end of Fiscal Year 2019 in February before we’ll see more progress.
In the meantime, the Trump Administration’s proposal will continue the long trend of the Administration to pace and lead the public by making radical proposals, which ultimately get pared down to more moderate accomplishments. Expect legislators not wishing to see a departmental merger begin to come up with their own creative ways to give the Administration more of what it wants: more efficiency and technology in government.