How Trump Can Avoid the Reorganization Trap His Predecessors Fell Into

Any day now, President Trump is expected to sign an executive order that would lay the groundwork for reorganizing the federal government. It’s a monumental undertaking, and one that could stumble on a fundamental flaw: The former businessman’s instinct is to view government vertically, with agencies and programs run from the top. But government’s biggest and toughest problems are horizontal—coordinating programs across government, and with nonprofits and private companies. As the last two administrations have learned the hard way, attacking horizontal problems with vertical strategies doesn’t work. It can also have disastrous political consequences.

The president wants to move fast, especially in reshaping the bureaucracy. This is a case, however, where charging too quickly down the wrong road can lead to disaster.

Most recent major reorganizations attempted by previous administrations, both Republican and Democratic, stalled out because they challenged the jurisdictions of Congressional committees. In his 2011 State of the Union Address, President Obama said he was going to take on the 12 different agencies that dealt with exports and five other agencies responsible for housing policy. “Then there’s my favorite example,” he said. “The Interior Department is in charge of salmon while they're in freshwater, but the Commerce Department handles them when they're in saltwater. I hear it gets even more complicated once they're smoked.” None of the reorganizations went anywhere because the committees refused to give up their hold on the agencies they oversaw.

Additionally, the urge to merge led to management meltdowns in the last two administrations because it blinded them to big problems they didn’t see coming. The point where George W. Bush’s negative approval ratings exceeded his positives—and never recovered—came as the administration struggled to respond to Hurricane Katrina. A similar thing happened to Barack Obama following the collapse of the Affordable Care Act website, until his tiger team finally got the website running months later.

Both administrations had vertical mindsets. And they got snared in the fundamental, inescapable horizontal realities—of coordinating the many players needed to respond to Katrina and of pulling together the feds and the contractors who needed to work together to get the Obamacare website right.

If the Trump administration follows the vertical approach to governing, whenever it encounters its own Katrina moment (and it will encounter such a moment) Trumpocalypse is certain. The defining feature of such moments is that the president never sees them coming. When they happen, the president can’t run fast enough to catch up. The lesson from the Bush administration is that it may never be possible to catch up.

It doesn’t have to be like that. The administration has important opportunities to reap big savings without setting a trap for itself.

First, recognize that mashing together agencies, even those that on the surface seem similar, will often—at best—create unwinnable battles. It’s very hard to save big money by cutting agencies without cutting programs, and even the boldest fighters have been worn down between the twin grindstones of committee jurisdictions and bureaucratic cultures. The Department of Homeland Security has made real progress in bringing its far-flung empire into a tighter orbit, but it’s going to take many, many more years to make the reorganization, launched 15 years ago, really work.

Second, look for the right battles. The Government Accountability Office has already done the homework. It found 12 areas where smart changes could reduce duplication and overlap in government programs. There’s fragmentation in the management of defense commercial satellites and duplication in the way the government and the states manage health exchanges. Savings could amount to tens of billions of dollars.

Third, understand there are better ways of saving big bucks. Improper payments amount to more than $137 billion per year, including $60 billion in Medicare alone. There’s a great collection of solid strategies to get a handle on these improper payments, and the payoff would dwarf the savings that would come from any reorganization.  

Another area ripe with potential savings is shared services—putting one organization in charge of managing services like information technology, human resources, and purchasing on behalf of multiple organizations. This is low-hanging-fruit that could produce billions of dollars in savings, without challenging sensitive congressional jurisdictions.

All of these are examples where running government more like a business would make sense. They’d produce strong payoffs relatively quickly. And, most importantly, they escape the trap of hierarchical obsessions in a world increasingly run through horizontal networks.

The administration faces a choice. It can go where the money is, which often avoids the nastiest political battles. That would mean focusing less on shuffling organizational boxes and concentrating more on the opportunity for real cost savings.

Or Team Trump can obsess over bureaucracies as symbols and try to mash organizations together in ill-fitting unions, launch battles that will be bruising even with a Republican Congress, and have relatively little to show for the effort by the end of its first term. Such a vertical strategy for horizontal problems isn’t just unlikely to work. It also set the administration up for a clumsy response to the big, inevitable Katrina-like Trumpocalypse it will never see coming.

Donald F. Kettl is a professor and former dean of the University of Maryland School of Public Policy.