President Barack Obama will ask Congress on Friday for authority to close the Commerce Department and create a new export agency, an overhaul that could save $3 billion and help inoculate him against Republican election-year charges that he is a big-government liberal.
White House budget official Jeffrey Zients told reporters the reorganization would fold together the Office of the U.S. Trade Representative and other trade bodies now spread across Washington, giving businesses a single point of contact and ensuring federal spending goes further to boost exports.
Obama was set to deliver remarks at 11:20 a.m. (1620 GMT) on the new, yet-to-be-named department that would be tasked with achieving his goal of doubling exports in five years, a key part of his economic agenda as the November presidential vote nears.
The Democrat was expected to cast it as an effort to make the government leaner and more efficient, reducing bureaucracy for export-oriented companies.
The proposal - the first of a series of consolidation steps Obama is expected to pursue - comes amid growing concerns about huge federal deficits and the size of the government.
Obama wants to put the USTR, the U.S. Export-Import Bank, Overseas Private Investment Corp, the Trade and Development Agency, the Small Business Administration and parts of the Commerce Department under a new roof - something that has been under discussion for years.
Last March, he asked White House budget officials to examine whether to merge the groups as a way to save money and ensure that U.S. export promotion is as efficient as possible.
A White House official said on Friday the goal of the consolidation was to save $3 billion over 10 years. It may also lead to the loss of 1,000 to 2,000 jobs through attrition, the official said.
Obama will seek a vote in Congress within three months on the proposal, which may meet resistance from some lawmakers who have voiced concerns the risks of putting small, focused trade agencies into a large bureaucracy.
Senate Finance Committee Chairman Max Baucus, one of Obama's fellow Democrats, and some other senior lawmakers have argued that the USTR, a cabinet-level agency of some 240 career employees, may lose its focus in a larger department.
But Obama is expected to say the move will help achieve his goal of doubling U.S. exports in five years - from $1.57 trillion in 2009 to $3.14 trillion by 2015. He has been trying to hitch the U.S. economy to faster growth in developing markets such as countries in Asia through closer trade ties.
With the election nearing, the White House has been working to highlight Obama's efforts to get things done in Washington in spite of gridlock in Congress. Resistance to the reorganization proposal would be cast by the White House as an example of Capitol Hill obstructionism.
"We think this is the sort of thing that should have bipartisan support," White House spokesman Jay Carney said.
Obama's proposal appeared to catch Republicans by surprise. They said they were reserving judgment until they had seen more details of what he was proposing.
"After presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it's interesting to see the president finally acknowledge that Washington is out of control," said Don Stewart, a spokesman for Senate Republican leader Mitch McConnell.
"We'll be sure to give it a careful review once the White House provides us with the details of what it is he wants to do," he said.
Republican presidential candidates vying to face Obama in the November election have been focusing in their campaign speeches on the size of the federal government and U.S. deficits, saying they pose a risk to the U.S. economy. (Additional reporting by Doug Palmer, Stella Dawson Susan Heavey, Editing by Ross Colvin and Philip Barbara)