Order Code IB93026
Issue Brief for Congress
Received through the CRS Web
Executive Branch Reorganization
and Management Initiatives
Updated December 20, 2002
Harold C. Relyea
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Reinventing Government
A New Administration
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
CHRONOLOGY
LEGISLATION
FOR ADDITIONAL READING
CRS Reports

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Executive Branch Reorganization and Management Initiatives
SUMMARY
When President George W. Bush came
Administration and congressional rein-
into office in January 2001, he arrived from a
vention efforts resulted in mostly modest
campaign in which he had emphasized effi-
changes during the 105th Congress, major
ciency in government, particularly through the
exceptions being the overhaul of the structure
use of information technology, but had not
and operations of the Internal Revenue Ser-
revealed any plans for reorganizing the execu-
vice and the consolidation of the foreign
tive branch.
policy agencies. During the 106th Congress,
executive reorganization and reinvention were
The departing Clinton Administration
neither major nor high-priority items.
had conducted, during most of its eight-year
tenure, an active effort at “reinventing
Following his 2001 inauguration, Presi-
government,” spearheaded by a National
dent Bush announced plans to address a num-
Performance Review (NPR). Announced
ber of management problems in the federal
shortly after the 1993 inauguration, the NPR
government. Then, in the aftermath of the
sought to find ways to make the federal gov-
September 11, 2001, terrorist attacks on the
ernment more efficient, economical, and
World Trade Center and the Pentagon, the
effective. The result was a series of reports
organization of the federal government for
proposing various organizational and opera-
maintaining homeland security and combating
tional reforms.
terrorism became an important consideration
for both the President and Congress. Estab-
Several major NPR recommendations
lishment of the Office of Homeland Security
were awaiting implementation when the No-
in October 2001 as a coordinating entity was
vember 1994 congressional elections resulted
an important first step, followed by the cre-
in Republican majority party control of both
ation of a Department of Homeland Security
houses of the 104th Congress. Republican
during the final weeks of the 107th Congress
congressional leaders had unveiled a Contract
(H.R. 5005).
With America reform plan in late September
1994. Its core principles regarded the federal
This issue brief views reorganization and
government as being too big, spending too
management as involving the alteration of the
much, being unresponsive to the citizenry, and
program administrative structure and opera-
perpetrating burdensome regulations. At the
tions of the executive branch for reasons of
conclusion of the 104th Congress, both the
efficiency, economy, and direction. The
President and Republican congressional lead-
underlying issue is who reorganizes or sets
ers could claim some victories in downsizing
management policy—Congress or the Presi-
government, but no department was elimi-
dent—and by what authority and, also, for
nated, and only a few small agencies were
what purpose?
abolished.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
President George W. Bush signed the Homeland Security Act of 2002 into law (P.L.
107-296) on November 25. The legislation (H.R. 5005) established the Department of
Homeland Security and the Homeland Security Council, relocated the Bureau of Alcohol,
Tobacco, and Firearms from the Department of the Treasury to the Department of Justice,
and, among other policy changes, authorized commercial airline pilots to carry firearms in
the cockpit. Senate debate on the legislation to establish a Department of Homeland
Security had stalled at the end of September over personnel flexibilities sought by the
President and the continuation of civil service protections and collective bargaining rights
in the substitute proposal (S.Amdt. 4471) offered by Senator Joseph Lieberman. After the
November elections—which gave the President’s party majority control of both houses of
the 108th Congress—a new department proposal (H.R. 5710) was introduced in the House
with bipartisan support and was approved on November 13. Still working with the original
House-passed bill (H.R. 5005), the Senate rejected the Lieberman substitute, approved a
substitute amending the bill with the language of the second House-passed bill (H.R. 5710),
and adopted the House bill (H.R. 5005), as amended, on November 19. The House accepted
the Senate-modified version of its initial department bill on November 22, clearing the
measure for the President’s signature. President Bush largely obtained what he wanted in
the legislation mandating the new department.
BACKGROUND AND ANALYSIS
For well over a century, the structure and program responsibilities of the federal
executive branch, including all of the departments and agencies, were determined by
Congress. In the aftermath of World War I, however, with the rise of the new public
administration profession and growing sentiment for attaining efficiency and economy in
government, came efforts to strengthen the President’s management ability. In 1932, the
Chief Executive was statutorily authorized to issue executive orders proposing reorganization
within the executive branch for purposes of reducing expenditures and increasing efficiency
in government. A reorganization order became effective after 60 days unless either House
of Congress adopted a resolution of disapproval. When President Herbert Hoover submitted
11 different reorganization orders, all were disapproved by the House of Representatives on
the grounds that his newly elected successor, Franklin D. Roosevelt, might have different
reorganization ideas.
President Roosevelt did submit a number of reorganization orders pursuant to a revised
and extended version of the 1932 statute, which expired automatically in 1935. Some major
actions taken in these orders included creating procurement and disbursement divisions in
the Treasury Department, establishing an enlarged National Park Service in the Interior
Department, and making the Farm Credit Administration an independent agency.
Congress subsequently mandated a similar arrangement in a 1939 statute. Once again,
the objective was to achieve efficiency and economy in administration. A presidential
reorganization plan, submitted to Congress, became effective after 60 days unless both
houses of Congress adopted a concurrent resolution of disapproval. In his initial
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reorganization plan, President Franklin D. Roosevelt created the Executive Office of the
President.
Such reorganization authority, renewed periodically a dozen times between 1945 and
1984, with slight variation, remained available to the President for nearly half a century. At
different junctures, qualifications were placed upon its exercise. For example, reorganization
plans could not abolish or create an entire department, or deal with more than one logically
consistent subject matter. Also, the President was prohibited from submitting more than one
plan within a 30-day period and was required to include a clear statement on the projected
economic savings expected to result from a reorganization.
Modification of the President’s reorganization plan authority was made necessary in
1983 when the Supreme Court, in the Chadha case (462 U.S. 919), effectively invalidated
continued congressional reliance upon a concurrent resolution to disapprove a proposed plan.
Under the Reorganization Act Amendments of 1984, which were signed by President Ronald
Reagan on November 8, several significant changes were made in the reorganization plan
law. Any time during the period of 60 calendar days of continuous session of Congress
following the submission of a reorganization plan, the President might make amendments
or modifications to it. Within 90 calendar days of continuous session of Congress following
the submission of a reorganization plan, both houses must adopt a joint resolution (which,
unlike a concurrent resolution, becomes law with the President’s signature — a central issue
in the Chadha case) for a plan to be approved. This amendment, however, continued the
President’s reorganization plan authority only to the end of 1984, when it automatically
expired (see 5 U.S.C. 901-912 (1988)). Neither President Reagan nor President George H.
W. Bush requested its reauthorization. President William Clinton did not seek its renewal,
although his National Performance Review (see below) recommended this course of action
in September 1993. Likewise, President George W. Bush has not sought such authority. The
National Strategy for Homeland Security, released by President Bush on July 16,
recommended the restoration of reorganization plan authority to allow reconfiguring portions
of the executive branch to better combat terrorism and maintain homeland security.
Currently, in the absence of reorganization plan authority, the President may propose
executive branch reorganizations to be realized through the normal legislative process. The
Departments of Energy, Education, Veterans Affairs, and, most recently, Homeland Security
were established in this manner. This approach, however, does not incorporate action-
forcing deadlines or a required final congressional vote on proposed reorganization plans that
are thought to expedite the consideration of reorganizations. The President might attempt
a minor reorganization, such as establishing a small, temporary entity within the Executive
Office of the President, by issuing a directive, such as an executive order. Attempting more
ambitious reorganizations through a presidential directive may, if not ultimately found to be
illegal, incur congressional displeasure and subsequent legislative and fiscal reaction. As a
result of the absence of reorganization plan authority, more recent reform efforts to improve
the efficiency and economy of government operations have emphasized management
improvements of both a governmentwide and specific program variety, including
applications of information technology that some have characterized as electronic
government.
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Reinventing Government
An ambitious effort at realizing executive branch reorganization and management
reform was launched by President Clinton at the outset of his administration when, on March
3, 1993, he initiated a National Performance Review (NPR) to be conducted under the
leadership of Vice President Albert Gore, Jr. Six months later, on September 7, the initial
NPR report was delivered to the President. Various accompanying supplemental reports on
both specific agencies and functional areas of government were subsequently published
during 1994. The bulk of the report’s almost 380 major recommendations (broken into over
1,230 action items) were directed to management reforms; several proposals addressed
executive reorganization, including one for congressional restoration of presidential
reorganization plan authority.
During the 12 months after the NPR report was issued, its recommendations were
implemented by 22 presidential directives, several enacted bills, and various agency actions.
Anniversary reports, marking progress in implementing NPR recommendations, were issued
in September of 1994, 1995, and 1996. The last of these indicated that 43% of the NPR’s
initial 833 agency action items were completed and 42% were in progress, and that 38% of
its initial 430 management systems action items were completed and 49% were in progress.
Of an additional 187 agency recommendations, 19% were completed and 62% were in
progress. As of January 1996, the executive workforce had been reduced by nearly 240,000.
In addition, almost 2,000 obsolete field offices had been closed and approximately 200
programs and agencies—such as the Tea-Tasters Board, Bureau of Mines, and wool and
mohair subsidies—had been eliminated. As of September 1996, said the report, “savings of
about $97.4 billion have been ensured through legislative or administrative action.”
According to the report, of the original $108 billion in savings projected in 1993, about $73.4
billion had been realized.
The Clinton Administration renewed its reinventing government effort in mid-January
1995 with Phase 2 of the NPR, which was detailed in the President’s FY1996 budget.
Shortly thereafter, in late February, the President announced new regulatory reform
proposals, including page-by-page review of federal regulations to determine those that were
obsolete, replaceable by private sector alternatives, or better administered by state and local
government. He also proposed to abolish the Interstate Commerce Commission (ICC) and
reconstitute the Federal Aviation Administration’s air traffic control services as a wholly
owned government corporation. The elimination of the ICC was subsequently realized in
December 1995. Certain functions of the Commission were transferred to the Surface
Transportation Board, newly established within the Department of Transportation by the
termination statute (109 Stat. 803).
With the convening of the 105th Congress, the reinvention effort entered yet another
new phase, emphasizing improved service delivery; use of partnerships and
community-based strategies to solve problems, not big government; and techniques for
improving performance in a time of diminishing resources, including the use of
performance-based organizations (PBOs). As a reflection of this third revamping, the NPR,
known heretofore as the National Performance Review, became the National Partnership for
Reinventing Government in January 1998.
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Support for the performance of selected governmental functions through PBOs was
reiterated in the President’s FY1998 budget. The PBO innovation involved rechartering
certain federal executive agencies to permit them to negotiate alternative approaches to
procurement and personnel rules and to increase their accountability for financial and
program results. The anticipated increased efficiency would allow the agencies to downsize
their workforce or use their cost savings to improve services. Legislation to convert the
Patent and Trademark Office (PTO) of the Department of Commerce into a PBO was
proposed by the Clinton Administration in 1995, but it received little attention during the
104th Congress; similar legislation remained on the Senate legislative calendar when the
105th Congress adjourned. When the agency was restructured by the American Inventors
Protection Act of 1999 (113 Stat. 1537-564), the reconstituted PTO insisted it was a PBO,
but that characterization was doubtful in the view of many analysts.
Overhauling the structure and operations of the Internal Revenue Service (IRS) was a
major accomplishment of the 105th Congress. Although some competition developed
between the White House and congressional leaders to seize the IRS reform initiative, the
Clinton Administration subsequently abandoned its opposition to a congressional plan for
a wide-ranging overhaul of the IRS. President Clinton signed the reform bill into law (112
Stat. 685) on July 22, 1998.
In early 1997, the Clinton Administration revisited the long-discussed and contentious
matter of the reconfiguration and consolidation of the foreign policy agencies. Prolonged
and heated debate over such a reorganization during the 104th Congress had resulted in a
presidential veto. In mid-April, the President approved a broad reorganization proposal
calling for the folding of two independent agencies—the Arms Control and Disarmament
Agency and the United States Information Agency—into the Department of State. In
addition, the U.S. Agency for International Development remained a separate entity, but its
director would report to the Secretary of State rather than to the President, as current law
prescribed. The plan eventually was included in the provisions of the State Department
authorization bill, but conferees on the legislation later deadlocked on a House provision
barring aid for family planning groups that use their own money to finance overseas
abortions. The Clinton Administration revived the conference discussions early in 1998.
Subsequently, the reorganization proposal, without the objectionable abortion restriction
rider, was included in the Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999, signed into law by President Clinton on October 21 (112 Stat.
2681-761).
In the aftermath of the May 25, 1999, release of the final report of the House Select
(Cox) Committee on U.S. National Security and Military/Commercial Concerns with the
People’s Republic of China, discussing security lapses that had apparently allowed the
Chinese to acquire U.S. nuclear weapons and related technology, a special investigative panel
of the President’s Foreign Intelligence Advisory Board (PFIAB) released a June 15 report
concerning these and other Department of Energy (DOE) managerial failures and called for
“radical” restructuring of DOE. Although Secretary of Energy Bill Richardson opposed
creating an independent nuclear security agency, he later accepted the idea of a
semiautonomous agency within DOE to manage the national labs. Conferees on the National
Defense Authorization Act for FY2000 provided for the establishment of a new National
Nuclear Security Administration (NNSA) as a semiautonomous entity within the department
and a related under secretary position. Although Secretary Richardson expressed
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reservations about the NNSA, both chambers approved the conference committee report in
September 1999.
Signing the legislation into law on October 5 (113 Stat. 512), President Clinton, in a
surprise move, indicated his displeasure with provisions creating the NNSA, and announced
that he would withhold appointing the new under secretary for information security until
Congress addressed certain “deficiencies” in the organizational arrangements. Secretary
Richardson was directed by the President to perform the duties of the new under secretary
and to assign department officers and employees to a concurrent office within the NNSA as
deemed necessary. The President’s action stunned many legislators closely associated with
the NNSA structuring. After seeking to assure Members of Congress that the administration
was in agreement with the spirit of the legislation, but felt that the NNSA provisions
constituted “a serious problem,” Richardson developed and, on January 7, transmitted the
NNSA implementation plan. The new agency began operations on March 1. President
Clinton later nominated General John A. Gordon, who was serving as the deputy director of
the Central Intelligence Agency, to be the DOE’s new under secretary for nuclear security
and the director of the NNSA. He was subsequently confirmed by the Senate on June 14,
2000, as the head of NNSA.
Testifying at a May 4, 2000, hearing conducted by a subcommittee of the Senate
Committee on Governmental Affairs, Donald F. Kettl, a University of Wisconsin professor
who had conducted extensive research on the NPR reforms, gave the effort an overall grade
of “B,” saying there was “room for improvement.” Brookings Institution scholar Paul C.
Light added that the NPR program had created “unnecessary politicization of government
reform.” Two other analysts were also critical of the NPR effort. A few months later, in
September, a GAO report (GAO/GGD-00-145) concluded that the NPR reinvention effort
had been largely successful, with more than 90% of key Clinton Administration
recommendations having been fully or partly implemented. The report was based upon a
review of 72 NPR recommendations by 10 federal agencies, which found that 33 of them
were fully implemented and another 30 were partly implemented.
A New Administration
During his campaign for the presidency, Texas Governor George W. Bush emphasized
efficiency in government, particularly through the use of information technology, but
revealed no plans for reorganizing the executive branch. The terrorist attacks of September
11, 2001, however, prompted various structural modifications. A major objective of
restructuring was to realize governmental arrangements resulting in more efficient,
economical, and effective homeland security. Reinstatement of the President’s
reorganization plan authority was proposed to allow the Chief Executive to create the
structure he deemed appropriate, and legislation creating a Department of Homeland Security
was introduced (S. 1534) and later expanded (S. 2452 and H.R. 4660). On February 14,
2002, the leadership of the House and Senate intelligence committees announced a bipartisan
investigation of the operations and activities of the intelligence community pertaining to the
September 11 attacks. This joint investigation resulted in a report, which, among other
recommendations, called for the appointment of a Cabinet-level national intelligence chief,
who would rank above the Director of Central Intelligence. Press revelations that
perpetrators of the terrorist attacks had been cleared by the Immigration and Naturalization
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Service (INS) to stay in the United States prompted renewed calls for the overhaul of the
INS, including its division into separate administrative and enforcement entities. On March
21, leaders of the House Committee on the Judiciary reached agreement on a bipartisan
proposal to split the existing INS and provide each component its own budget. In a surprise
move, the White House, on April 24, gave qualified support to the proposal. The
endorsement came on the eve of the bill (H.R. 3231) being considered on the House floor for
final action. Introduced on November 6, 2001, by Representative James F. Sensenbrenner,
Jr., the measure garnered 46 cosponsors. Revised in a April 10 markup, the legislation was
ordered to be reported from committee on a 32-2 vote. A report on the bill (H.Rept. 107-
413) was filed on April 19, and the measure was adopted by the House on a 405-9 vote on
April 25. (See CRS Report RL30257 and CRS Report RS20279.)
Another long-standing reorganization matter concerns border security administration.
For many years prior to the September 11 terrorist attacks, proposals have been made from
time to time to consolidate various aspects of border security within a single entity or
minimum number of federal agencies. (See CRS Report 97-974.) Such proposals have
attracted greater interest since the attacks as part of counterterrorism efforts to more
efficiently and effectively secure the nation’s northern and southern borders. In late
December, Office of Homeland Security staff reportedly produced a tempest within the Bush
Administration when they unveiled a broad proposal to create an agency that would
consolidate border security management. Opponents represented a wide range of agencies,
including five Cabinet departments.
This proposal, however, was used by presidential assistants to formulate the Department
of Homeland Security plan unveiled by President Bush on June 6. His surprise
announcement was viewed not only as an attempt to regain the initiative in the nation’s
efforts at combating terrorism, but also to move beyond the coordination efforts of the Office
of Homeland Security to a strong administrative structure for managing consolidated
programs concerned with border security and effective response to domestic terrorism
incidents. On June 18, the President transmitted to the House of Representatives proposed
legislation to established a Department of Homeland Security. This legislation was
subsequently introduced by request (H.R. 5005) on June 24. According to a legislative
strategy announced by Speaker Dennis Hastert and Minority Leader Richard Gephardt,
standing committees of jurisdiction began reviewing the proposal and, as the second week
of July drew to a close, provided recommendations for modifying the legislation. A few
panels urged maintaining some agencies—for example, the Coast Guard, the Federal
Emergency Management Agency, and the Secret Service—in their current status and not
transferring them to the new department. On July 15, the House Select Committee on
Homeland Security began its consideration of the bill. That same day, the Brookings
Institution released the first comprehensive critique of the President’s proposal, suggesting,
among other considerations, that it “merges too many different activities into a single
department,” should leave science and technology research and development responsibilities
for later deliberation, and begs a rethinking of congressional committee arrangements. The
following day, the President released the National Strategy for Homeland Security, which
offered a definition of homeland security of potential usefulness for determining the program
composition of the new department. On July 19, the House select committee marked up and
order reported (H.Rept. 107-609) the House version of the Department of Homeland Security
legislation. Meeting during July 24-25, the Senate Committee on Governmental Affairs
authorized Chairman Joseph Lieberman to withdraw the version of his Department of
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National Homeland Security bill (S. 2452) that had been amended and ordered favorably
reported on May 22, modified his offered amendment in the nature of a substitute to the text
of the bill, and approved the amendment as modified. Floor action on the measure, however,
was postponed until the Senate returned in early September from an August recess. During
July 25-26, the House of Representatives began floor debate and amendment of its
counterpart department bill (H.R. 5005) and then approved the legislation, as amended, on
a 295-132 vote.
Senate consideration of the House-passed bill began on September 3, 2002, when
Senator Lieberman submitted an amendment (No. 4471) containing the language of his
modified department bill as a substitute for the text of the House-passed legislation. Initial
amendments to the Lieberman substitute, adopted on September 5, prohibited the Secretary
of Homeland Security from contracting with any corporate expatriate and improved flight
and cabin security on passenger aircraft. On September 17, after extended debate, a third
amendment was adopted, striking Title II of the Lieberman substitute, which would have
established a National Office for Combating Terrorism, and Title III, which would have
mandated a National Strategy for Combating Terrorism.
Amendments approved the following day created an Office of National Capital Region
Coordination within the new department; clarified the transfer of certain agricultural
inspection functions of the Department of Agriculture; enhanced the management and
promotion of electronic government services and processes by establishing an Office of
Electronic Government within the Office of Management and Budget, along with a broad
framework of measures that require using Internet-based information technology to enhance
citizen access to government information and services; identified certain sites as key
resources for protection by the Directorate of Critical Infrastructure Protection; amended
various laws administered by the Secretary of Veterans Affairs to take into account the
assumption by the Secretary of Homeland Security of jurisdiction of the Coast Guard; and
improved the protection of Department of Defense storage depots for lethal chemical agents
and munitions through strengthened temporary flight restrictions. An amendment approved
on September 19 strengthened criminal laws and provided greater flexibilities to prevent and
protect against cyber attacks.
Amendments adopted on September 24 mandated the National Commission on Terrorist
Attacks Upon the United States to conduct a comprehensive investigation of the events of
September 11, and established an Office for State and Local Government Coordination
within the office of the Secretary for Homeland Security. An amendment (S.Amdt. 4644)
offered by Senator Robert Byrd defining “homeland security” and otherwise establishing an
incremental arrangement for determining the composition of the new department was
defeated on a 28-70 vote.
The following day, Senator Phil Gramm submitted an amendment (S.Amdt. 4738)
structuring the department and creating management arrangements very similar to the
President’s original proposal, but otherwise containing many other portions identical to those
of the Lieberman substitute. Another amendment (S.Amdt. 4740), offered by Senator Ben
Nelson, sought to modify certain personnel provisions to effect a compromise between the
flexibilities in human resources management sought by the President and the continued civil
service protections and collective bargaining rights contained in the Lieberman substitute.
By this time, the President, in his September 21 radio address to the nation and in September
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23 remarks at an Army National Guard aviation support facility in Trenton, NJ, was
demanding Senate approval of his position on human resources management. He indicated
that he could accept the Gramm-Miller proposal, adding that “anything less than that is a bill
I cannot accept.”
On September 26, attempts to invoke cloture on the Lieberman substitute failed for the
third and fourth times, as did an October 1 attempt to invoke cloture on the Gramm
amendment, leaving the outcome on legislating a Department of Homeland Security in doubt.
Further discussion of the matter was discontinued in the Senate, both houses subsequently
adjourning on November 8 for the fall elections.
When the House and the Senate reconvened on November 12, it was clear from the
recent election returns that the President’s political party would have majority control of both
houses of the l08th Congress. Furthermore, Representative Armey, the House Majority
Leader and chairman of the Select Committee on Homeland Security, introduced, with
bipartisan support, a new bill (H.R. 5710) to establish a Department of Homeland Security,
which was supported by the Bush Administration. The bill was brought up for floor
consideration the following day under a closed rule (no amendments), and was approved on
a 299-121 vote.
On November 13, the Senate resumed consideration of the initial House-passed bill
(H.R. 5005) establishing a Department of Homeland Security. Pending on the floor was the
Lieberman substitute (S.Amdt. 4471), which was subsequently tabled on a 50-47 vote.
Senator Fred Thompson offered the text of the second House-passed bill (H.R. 5710)
creating a Department of Homeland Security as an amendment (S.Amdt. 4901) for later
consideration as a substitute to the language of the initial House-passed department bill. The
following day, Senator Lieberman offered an amendment (S.Amdt. 4911) to make certain
provisions of the Thompson substitute noneffective. On November 15, the Senate, on a 65-
29 vote, ended further debate on the Thompson substitute (S.Amdt 4901). Four days later,
the Thompson substitute was adopted on a 73-26 vote, and the Senate then passed the House
bill (H.R. 5005), as amended, on a 90-9 vote and returned the measure to the House. The
House agreed to the Senate-amended version of the bill on November 22, clearing the
measure for the President’s signature. President Bush signed the legislation into law on
November 25 (P.L. 107-296).
The primary issue for Congress and the President was determining the program
composition and administrative organization of the new department. In the course of
mandating the Department of Homeland Security, this overarching consideration broke down
into a series of lesser, more finite issues, not the least of which were threshold questions
concerning the value of the new entity. President Bush contended that his proposal did not
constitute an expansion of the federal government, but merely consolidated existing
programs within a more efficient and effective management structure. However, neither the
President’s proposal nor the principal congressional bills made use of a definition of the
concept of homeland security to guide the component composition of the new department.
Moreover, whole agencies were proposed for transfer to the department with very little effort
to sort out non-homeland security functions and programs for more appropriate
administration elsewhere other than the new department. Of course, attempts to sort out the
homeland security programs of transferred agencies from non-homeland security programs
might have resulted in increased cost for additional administrative overhead. Some
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contended that the creation of any new department would result in budget expansion. In a
July 9, 2002 cost estimate, the Congressional Budget Office proffered that the initial House-
passed bill (H.R. 5005) establishing a new Department of Homeland Security “would cost
about $3 billion over the 2003-2007 period,” which would be “in addition to projected net
spending for ongoing activities of the transferred agencies—about $20 billion in 2002,
growing to $31 billion by 2007.”
There were, as well, those who doubted that merely rearranging programs within a new
department would truly improve the nation’s defenses against terrorism. Others maintained
that, no matter how well management and operating arrangements were fine-tuned, the
effectiveness of the department and its leadership could not be legislatively guaranteed. And
still others wondered aloud who will be willing to serve, for very long, in the leadership of
such a department. Additional issues concerning the scope of the President’s proposal, the
transfer of non-homeland security functions, and certain operating arrangements of the new
department are discussed below.
Some initially criticized the President’s proposal as an inadequate response to what they
viewed as intelligence failures, suggesting that, in the context of considering the components
of the new homeland security department, the Federal Bureau of Investigation (FBI) and the
federal intelligence community, particularly the Central Intelligence Agency (CIA), should
not escape scrutiny. Two FBI units—the National Domestic Preparedness Office (15
employees) and the National Infrastructure Protection Center (795 employees)—would have
been transferred to the new department under the President’s plan, and ultimately were in the
bill that was signed into law. The criticism, however, suggested that those developing the
President’s plan had not given adequate consideration to the prospect of transferring or
restructuring FBI and CIA counterterrorism responsibilities. Others questioned why the
Bureau of Alcohol, Tobacco, and Firearms, the Drug Enforcement Administration, and the
Nuclear Regulatory Commission were not included. GAO, among others, noted that,
because the concept of “homeland security” had not been defined, “certain organizational,
management, and budgetary decisions cannot currently be made consistently across
agencies.” As the House and the Senate were giving final approval to legislation establishing
the department, questions about its scope arose anew when the chairman of a
counterterrorism study commission recommended the creation of a national counterterrorism
center to improve cooperation among intelligence agencies and it was reported that senior
Bush Administration officials were seriously discussing the creation of a domestic
intelligence agency.
During the course of legislatively establishing a Department of Homeland Security,
some noted that the transfer of whole agencies to the new department would result in it being
responsible for the administration of programs having nothing to do with homeland security
and which, consequently, might not receive adequate resources for their execution. These
included the marine safety responsibilities of the Coast Guard, the drug and child
pornography interdiction efforts of the Customs Service, the counterfeiting detection and
investigation program of the Secret Service and the research and non-native plant and pest
eradication efforts of the Animal and Plant Health Inspection Service. OHS Director Tom
Ridge, in his June 20, 2002 testimony before the Senate Committee on Governmental
Affairs, acknowledged that the new department would have a number of programs not
directly related to countering terrorism, but did not indicate any particular concern about this
development. Sorting out these programs for continued administration by their parent
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departments was an option for Congress, but little effort was actually made in this regard for
various reasons, not the least of which was the possibility that it might result in increased
cost for additional administrative overhead. The desire to get the department quickly
established, and to do so before the adjournment of the 107th Congress, were also key factors.
In creating the new department, Congress had the responsibility for determining the
appropriate administrative structure for the secretary to manage, with efficiency, economy,
and effectiveness, an organization of some 170,000 employees (many of whom would be
working in field facilities), composed of diverse units, with shared responsibility and
partnership with state and local governments, as well as the private sector. A key
consideration was the secretary’s span of control over the operations of primary divisions and
internal agencies (e.g., the Coast Guard and Secret Service), together with such broad
departmental functions as human and information resources management, budget setting, and
financial management. Initial versions of both the House and Senate bills appeared to
support strong vertical management structures, and both were seemingly weak in detailing
horizontal working arrangements among headquarter’s divisions and internal agencies and
among field staff. Under the bill initially adopted by the House, the Secretary of Homeland
Security might have had as many as 15 senior officials of the department reporting directly
to him or her (or more if the assistant secretaries actually had this relationship); under the
Senate bill recrafted in committee, 17 senior officials seemingly would have been reporting
directly to the secretary.
Ultimately, the statute mandating the Department of Homeland Security placed most
of the entities and functions transferred to the new department within four primary
directorates for border and transportation security, emergency preparedness and response,
science and technology, and information analysis and infrastructure protection. The Coast
Guard and the Secret Service were excepted from this arrangement and enjoy independent
status within the department. The heads of these six components, along with upwards of 12
assistant secretaries and approximately 14 other senior officials, appear to report directly to
the secretary. In general, the statutory administrative framework established for the
department appears to support strong vertical management structures while being somewhat
weak in detailing horizontal working arrangements among headquarter’s divisions and
internal agencies.
During the 20th century, Congress enacted a variety of general management laws
prescribing how federal departments and agencies shall manage assets and resources, prepare
budgets, engage in the purchase of goods and services, and conduct regulatory activities and
their evaluation. Some of these laws are generally inclusive in their application—they
automatically apply to all departments and agencies unless otherwise excepted. Others are
explicit, requiring amendment in order for their provisions to be applicable to specific
departments and agencies. As legislation establishing a Department of Homeland Security
progressed in the House and the Senate, questions about the applicability of some of these
laws were raised and were only sporadically addressed. For example, the Subcommittee on
Commercial and Administrative Law of the House Committee on the Judiciary devoted a
hearing to administrative law, adjudicatory, and privacy issues posed by the House bill.
Another case involved the Government Performance and Results Act (GPRA). At one
point, the Senate bill, while not exempting the new department from GPRA requirements,
provided some GPRA-like results-based management obligations—a strategic plan, a
performance plan, and a performance report—for the department. Ultimately, the statute
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mandating a Department of Homeland Security reflects special arrangements in such areas
as human resources management and procurement, but uncertainties regarding the
applicability of other general management laws are likely to arise.
Worth mentioning is the innovation of establishing a Privacy Officer within the new
department. This idea gained attention when OMB Controller Mark W. Everson, in his July
9 testimony before the House Subcommittee on Commercial and Administrative Law,
commented: “Although the general counsel of an agency often handles privacy issues, we
recognize the special importance of these issues in the homeland security context and are
examining options for establishing a specialized privacy officer within the new Department.”
The Department of Justice has had such an official since December 1998. The initial House-
approved bill included a Privacy Officer, an addition to the legislation made by the Select
Committee on Homeland Security, and the committee-modified Senate bill also provided for
a Privacy Officer, as did the final version of the legislation.
Although the President’s proposal would have resulted in the transfer of almost 170,000
employees to the new department, the initial version of the Senate legislation (S. 2452)
would have involved the transfer of about 119,500 personnel. The President’s proposal
contained a provision not included in the initial version of the Senate bill authorizing the
Secretary of Homeland Security, in regulations prescribed jointly with the director of the
Office of Personnel Management, to establish and, from time to time, adjust a human
resources management system for some or all of the organizational units of the department,
“which shall be flexible, contemporary, and grounded in public employment principles of
merit and fitness.” In testimony before the Senate Committee on Governmental Affairs on
June 20, OHS Director Ridge indicated that the President would request for the department
“significant flexibility in hiring processes, compensation systems and practices, and
performance management to recruit, retain, and develop a motivated, high-performance and
accountable workforce.”
The provision raised various issues concerning staffing requirements, such as adequate
numbers of personnel and planning for the replacement of retiring staff; hiring, particularly
direct hiring which would not necessarily be merit-based and free of political influence and
lacked preference for veterans; and pay, particularly pay parity or equity for employees who
are performing similar jobs. Civil service protections and collective bargaining rights for
department workers were among the most contentious issues surrounding the establishment
of the Department of Homeland Security. Ultimately, the statute mandating the new
department largely supported the President’s position on these matters.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee on Energy and Commerce. Creating the Department of
Homeland Security: Consideration of the Administration’s Proposal. Hearings. June
25 and July 9, 2002. Washington: GPO, 2002.
——. Committee on Government Reform. The Department of Homeland Security: An
Overview of the President’s Proposal. Hearing. 107th Congress, 2nd session, June 20,
2002. Washington: GPO, 2002.
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——. Committee on International Relations. Homeland Security Act of 2002. Hearing and
markup on H.R. 5005. 107th Congress, 2nd session, June 26 and July 10, 2002.
Washington: GPO, 2002.
——. Committee on the Judiciary. Subcommittee on Administrative Law. Adjudicatory
Issues, and Privacy Ramifications of Creating a Department of Homeland Security.
Hearing. 107th Congress, 2nd session, July 9, 2002. Washington: GPO, 2002.
–—. Homeland Security Act of 2002. Hearing on H.R. 5005. 107th Congress, 2ndsession,
June 26, 2002. Washington: GPO, 2002.
–—. Proposal to Create a Department of Homeland Security. Hearings. 107th Congress, 2nd
session, July 9, 2002. Washington: GPO, 2002.
——. Committee on Transportation and Infrastructure and Committee on Government
Reform. Combating Terrorism: Options to Improve Federal Response. Joint hearing.
107th Congress, 1st session, April 24, 2001. Washington: GPO, 2002.
——. Select Committee on Homeland Security, Homeland Security Act of 2002. Report to
accompany H.R. 5005. 107th Congress, 2nd session. H.Rept. 107-609, part 1.
Washington: GPO, 2002.
U.S. Congress. Senate. Committee on Governmental Affairs. Has Government Been
“Reinvented”?. Hearing, 106th Congress, 2nd session, May 4, 2000. Washington: U.S.
Govt. Print. Off., 2000. 83 p.
—— National Homeland Security and Combating Terrorism Act of 2002. S.Rept. 107-175,
107th Congress, 2nd session. Washington, U.S. Govt. Print. Off., 2002. 38 p.
____ President Bush’s Proposal to Create a Department of Homeland Security. Hearing,
107th Congress, 2nd session, June 20, 2002. Washington: U.S. Govt. Print. Off., 2002.
218 p.
——. Committee on Health, Education, Labor, and Pensions. Homeland Security. Hearing.
107th Congress, 2nd session, July 16, 2002. Washington: GPO, 2002.
CHRONOLOGY
11/25/02 —
President George W. Bush signed the Homeland Security Act, establishing
the Department of Homeland Security, into law (P.L. 107-296).
06/06/02 —
President George W. Bush called for the creation of a Department of
Homeland Security by Congress and provided a plan for the structure and
programs of the new entity.
08/25/01 —
President George W. Bush, in his radio address to the nation, announced the
release of The President’s Management Agenda, a report identifying 14
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management problems in the federal government and offering specific
solutions to address them.
07/18/01 —
OMB Director Mitchell E. Daniels, Jr., on behalf of President Bush, apprised
executive department and agency heads of administration efforts to develop
an electronic government action plan using an interagency task force to be
headed by OMB Associate Director for Information Technology and E-
Government Mark Forman.
01/01/98 —
The National Performance Review became the National Partnership for
Reinventing Government.
01/11/97 —
At a Blair House meeting of the new Cabinet, Vice President Gore presented
a brief set of papers, which he dubbed “reinvention marching orders,”
emphasizing three themes: improved service delivery; use of partnerships
and community-based strategies to solve problems, not big government; and
techniques for improving performance in a time of diminishing resources,
including the use of performance-based organizations. The issuance of the
Blair House papers marked the beginning of a new stage of the NPR.
09/09/96 —
The National Performance Review marked its third-year anniversary,
reporting that 43% of its initial 833 agency action items were completed and
42% were in progress, and 49% of its initial 430 management systems action
items were completed and 49% were in progress; of an additional 187
recommendations, 19% were completed and 62% were in progress; “savings
of about $97.4 billion have been ensured through legislative or administrative
action” and an “additional $5.2 billion in savings is contained in legislation
pending before Congress;” and, as of January 1996, an executive workforce
reduction of nearly 240,000 employees had been realized.
09/11/95 —
The National Performance Review marked its second year anniversary,
reporting that 32% of its initial agency action items were completed and 61%
were in progress, and 27% of its initial 417 management systems action items
were completed and 63% were in progress; more than 180 additional
recommendations had been made; and “about $57.7 billion of [approximately
$108 billion] projected savings have been achieved” and an “additional $4.3
billion in savings are currently pending before Congress.”
01/12/95 —
Vice President Gore, OMB Director Alice Rivlin, and other officials formally
launch Phase 2 of the National Performance Review.
09/27/94 —
Republican leaders of the House of Representatives unveiled a “Contract
With America” reform plan with core principles that regard the federal
government as being too big, spending too much, unresponsive to the
citizenry, and the perpetrator of burdensome regulations.
09/14/94 —
The National Performance Review marked its one-year anniversary, reporting
that over 90% of its recommendations “are under way,” implementation
occurring through 22 presidential directives, several enacted bills, and a
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variety of agency actions, with the result that “$46.9 billion of NPR’s $108
billion in proposed savings are already enacted” and another “$16 billion in
savings is pending before Congress.”
09/07/93 —
The National Performance Review provided its first report to President
Clinton, offering some 380 major recommendations for government reform.
The bulk of these proposals concerned management improvement, but several
were directed at agency reorganization, consolidation, and field structure
overhaul.
03/03/93 —
President Clinton announced he was initiating a National Performance
Review, to be headed by Vice President Gore, to evaluate the efficiency,
economy, and effectiveness of every federal program and service, and make
recommendations for “reinventing government,” including proposals for
executive branch reorganization.
LEGISLATION
P.L. 107-296 (H.R. 5005) (Armey) (by request)
Homeland Security Act of 2002. Establishes a Department of Homeland Security.
Introduced June 24, 2002, and referred to the Select Committee on Homeland Security, and,
in addition, to the Committees on Agriculture, Appropriations, Armed Services, Energy and
Commerce, Financial Services, Government Reform, Intelligence, International Relations,
the Judiciary, Science, Transportation and Infrastructure, and Ways and Means.
Recommendations of the standing committees provided to the select committee, which began
consideration of the bill on July 15; marked up and ordered reported (H.Rept. 107-609), as
amended, by the select committee on July 19; House floor debate and amendment begun July
25; House floor debate and amendment completed and bill, as amended, adopted on a 295-
132 vote on July 26. Senate floor debate begun September 3; amended with language
substituted in lieu of original text on a 73-26 vote and adopted, as amended, on a 90-9 vote
November 19 and returned to the House. House agreed to Senate-amended bill November
22, clearing the legislation for the President’s signature. Signed into law November 25 as
P.L. 107-296.
FOR ADDITIONAL READING
Carter, Ashton B. “The Architecture of Government in the Face of Terrorism.” International
Security, vol. 26, winter 2001/02: 5-23.
Daalder, Ivo H., and I. M. Destler. “Advisors, Czars and Councils: Organizing for
Homeland Security.” National Interest, no. 68, summer 2002: 66-78.
Daalder, Ivo H., et al. Assessing the Department of Homeland Security. Washington,
Brookings Institution, 2002. 63 p.
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Gazell, James A., ed. “The National Performance Review and Public Administration.”
Special issue. International Journal of Public Administration, v. 20, no. 1, 1997:
1-247.
Kettl, Donald F. Reinventing Government: A Fifth-Year Report Card. Washington,
Brookings Institution, 1998. 71 p.
National Performance Review. Most literature may be reviewed and downloaded by
consulting the NPR web site “library” at
[http://govinfo.library.unt.edu/npr/default.html].
Office of the Vice President. Common Sense Government Works Better & Costs Less.
Washington, U.S. Govt. Print. Off., September 1995. 158 p.
—— From Red Tape to Results: Creating a Government That Works Better & Costs Less.
Report of the National Performance Review. Washington, U.S. Govt. Print. Off.,
September 1993. 168 p.
—— From Red Tape to Results: Creating a Government That Works Better & Costs Less:
Status Report, September 1994. Report of the National Performance Review.
Washington, U.S. Govt. Print. Off., September 1994. 127 p.
—— The Best Kept Secrets In Government. A Report to President Bill Clinton. National
Performance Review. Washington, U.S. Govt. Print. Off., September 1996. 245 p.
U.S. General Accounting Office. Combating Terrorism: Selected Challenges and Related
Recommendations. GAO-01-822. [Washington] September 2001. 203 p.
—— Reinventing Government: Status of NPR Recommendations at 10 Federal Agencies.
GAO/GGD-00-145. [Washington] September 2000. 80 p.
White House Office. The Department of Homeland Security. [Washington] June 2002. 24p.
Wise, Charles R. “Organizing for Homeland Security.” Public Administration Review, vol.
62, March-April 2002: 131-144.
CRS Reports
CRS Report RS21251. Analysis of President’s Proposal Concerning the Office of Inspector
General for the Proposed Department of Homeland Security, by Diane T. Duffy.
CRS Report RL31520. Collective Bargaining and Homeland Security, by Jon O.
Shimabukuro.
CRS Report RL31497. Creation of Executive Departments: Highlights from the Legislative
History of Modern Precedents, by Thomas P. Carr.
CRS Report RL31472. Departmental Organization, 1947-2001, by Sharon Gressle.
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CRS Report RL31514. Department of Homeland Security: Appropriations Transfer
Authority, by Robert Keith.
CRS Report RS21366. Department of Homeland Security: Hypothetical Organization
Chart, by Sharon S. Gressle.
CRS Report RL31024. The Federal Activities Inventory Reform Act and Circular A-76, by
L. Elaine Halchin.
CRS Report RL30795. General Management Laws: A Selective Compendium — 107th
Congress, by Ronald C. Moe.
CRS Report RL31639. Homeland Security: A Topical Comparison of H.R. 5710 with H.R.
5005, by Sharon S. Gressle.
CRS Report RS21295. Homeland Security and the Davis-Bacon Act, by Jon O.
Shimabukuro.
CRS Report RS21268. Homeland Security: Data on Employees and Unions Potentially
Affected, by Gail McCallion.
CRS Report RL31548. Homeland Security Department Proposals: Scope of Personnel
Flexibilities, by Tom Nicola.
CRS Report RL31500. Homeland Security: Human Resources Management, by Barbara L.
Schwemle.
CRS Report RL31492. Homeland Security: Management Positions in the New Department,
by Henry B. Hogue.
CRS Report RL31148. Homeland Security: The Presidential Coordination Office, by
Harold C. Relyea.
CRS Report RL31513. Homeland Security: Side-by-Side Comparison of H.R. 5005 and S.
2452, 107th Congress, by the CRS Homeland Security Team.
CRS Report RL31449. House and Senate Committee Organization and Jurisdiction:
Considerations Related to Proposed Department of Homeland Security, by Judy
Schneider.
CRS Report RS21260. Information Technology (IT) Management: The Clinger-Cohen Act
and Homeland Security Proposals, by Jeffrey W. Seifert.
CRS Report RL30596. The National Performance Review and Other Government Reform
Initiatives: An Overview, 1993-1999, by Harold C. Relyea, Maricele J. Cornejo
Riemann, and Henry B. Hogue.
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