Federal Reorganization

A congressional proposal to consolidate the Departments of Labor and Education along with the Equal Employment Opportunity Commission (EEOC) envisions saving billions of dollars and creating more efficient services, but savings might be elusive if downsizing proceeds too quickly or proceeds without careful planning. The proposal to create a new Department of Education and Employment could yield savings of about $1.65 billion in administrative costs through the year 2000. The proposal's cost-saving goal, in addition to its organizational requirements, would significantly change Education's existing structure, program offerings, and processes. The proposal would also raise program consolidation, workforce, accountability, implementation, and oversight issues that Congress, Education, and other agencies would need to address to ensure that federal education and training programs meet the nation's needs. GAO summarized this report in testimony before Congress; see: Federal Reorganization: Proposed Merger's Impact on Existing Department of Education Activities, by Linda G. Morra, Director of Education and Employment Issues, before the House Committee on Economic and Educational Opportunities. GAO/T-HEHS-95-188, June 29, 1995 (17 pages).

GAO found that: (1) the proposed Department of Education and Employment's budget would be about $71 billion and would support over 25,600 full-time positions and about 1,200 field offices; (2) the new Department would be organized under three undersecretary activities, including workforce preparation and policy, civil rights, and workplace policy; (3) the elimination of some duplicative programs and departmental functions, reduction of operating budgets for certain programs, and consolidation education and job training programs could reduce administrative costs by $1.65 billion; (4) if the reduction in administrative spending occurred in fiscal year 1996, about 4,600 positions would need to be eliminated to achieve 5-year savings from compensation and benefits; (5) if reductions were phased in over a 3-year period, it would allow for a more orderly transition and increase the likelihood of using other alternatives to reduce staffing; (6) 13 other agencies administer about 65 federally funded job training programs which target the same clients and share the same goals, but these programs are not included in the proposal; and (7) an in-depth examination of the proposal and its components is needed before considering such a merger.