Trump's Federal Reorganization Plan Could Affect Major State and Local Government Programs

The White House on Thursday unveiled a sweeping proposal to reorganize the structure of the federal government, consolidating programs and creating new agencies that could have large-scale effects on services rendered at the state and local levels.

The 132-page plan involves a host of federal agencies and programs, including some that pay for benefits for vulnerable and low-income populations. One noteworthy change would shift the $3 billion community development block grant program, or CDBG, from the Department of Housing and Urban Development to a new Bureau of Economic Growth under the Department of Commerce.

Budget director Mick Mulvaney earlier this year proposed in the Trump administration's 2019 budget plan to eliminate funding for program, which is tapped by local and state governments to pay for a variety of projects, such as helping build affordable housing. But Congress has preserved the money in bills recently passed out of committees.

The plan argues that moving the CDBG program into a new office at the Commerce department, along with other grant programs, would allow states and local governments to better leverage resources for big economic development projects. But without broad updates to the laws that govern the distribution of community grant funds, it’s unclear what, if any, changes would be seen at the local level.

“If they’re just sort of moving the boxes from one department’s organizational chart to another, the responsibilities and the statutory requirements remain the same,” Demetra Nightingale, a fellow at the Urban Institute, told Route Fifty. “The reorganization itself is going to have to have congressional approval, but without changes to every law for every program, wherever the CDBG program is, they’re still going to have to do the same thing that has been done before.”

The reorganization plan would also move the federal supplemental nutrition assistance program (SNAP), formerly known as food stamps, out of the Department of Agriculture and into the Department of Health and Human Services, which would then be renamed the Department of Health and Public Welfare.

Under that umbrella, the plan would then establish a Council on Public Assistance to oversee multiple federal entitlement programs. The council would have the authority, among other things, to impose work requirements on SNAP recipients, a measure that Democrats lambasted earlier this year when it came up as part of the farm bill renewal process. The move would fulfill a long-held conservative viewpoint that public assistance programs should be funded and managed together.

Placing the program under the health department would allow it to function more as it does at the state level, promoting better coordination and removing “administrative burden and potential duplication,” according to the report.

States structure their SNAP programs in different ways and are accustomed to dealing with multiple funding streams, so daily impacts at that level could be minor. But the program currently benefits from the expertise of employees at the agriculture department, so removing it could change things, Nightingale said.

“I think the big rationale for food stamps, or SNAP, to be at the Department of Health and Human Services is that it’s an income-support program and for low-income, elderly and disabled populations,” she said. “But it also involves the agricultural sector and the retail sector, so it’s not just a transfer of income. It’s more than that, and the expertise of the Department of Agriculture—and the responsibility in Congress for the agricultural program—both come into play.”

Joseph A. Califano Jr., President Carter’s secretary of health, education and welfare, agreed, telling Government Executive last week, “In putting food stamps with Congress’s agriculture committees, we thought they understood the benefits to farm states of the program—financially, to their families and farms—and would be more supportive of it than it would be if the program were viewed as just for poor people.”

Many of the proposals in the reorganization plan would require congressional approval, though Margaret Weichert, deputy director of the Office of Budget and Management, told reporters on Thursday that the administration could implement some without consulting lawmakers.

Officials would work with Congress on the others throughout the summer, she said.

A representative of the National League of Cities said local leaders would want to be part of discussions going forward.

“We’re still reviewing the administration’s plan to reorganize certain federal agencies. Any changes to essential programs that cities rely on — including Community Development Block Grants and the Supplemental Nutrition Assistance Program — need to be carefully considered with input from local leaders," said Tom Martin, a spokesman. "The president’s budget proposals have consistently defunded these critical programs, and we will continue to fight to preserve these and other federal investments in America’s cities.”

Other noteworthy reorganization proposals include:

• Consolidation of environmental clean-up programs by combining portions of the Department of Interior’s Central Hazardous Materials Program and the Department of Agriculture’s Hazardous Materials Management Program into the Environmental Protection Agency’s Superfund program. The move, according to the proposal, would “allow EPA to address environmental cleanup” on federal land regardless of which agency manages it. This could include clean-up of roughly 4,000 abandoned mines.
• Moving the U.S. Army Corps of Engineers, an agency involved in major infrastructure projects across the country, out of the Department of Defense. The plan envisions Corps work on navigation would be moved to the federal transportation agency, while civil works like flood control projects would be shifted to the Department of the Interior.
• Selling electricity transmission infrastructure owned by the Tennessee Valley Authority to increase private-sector ownership and “encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers.”
• Consolidating economic development functions of the Delta Regional Authority, Denali Commission and Northern Border Regional Commission under the new Bureau of Economic Growth at the Department of Commerce.