Why It’s So Hard to Shut Down a Government Agency

Budget Director Mick Mulvaney speaks outside the West Wing of the White House on Monday. Budget Director Mick Mulvaney speaks outside the West Wing of the White House on Monday. AP Photo/Andrew Harnik

President Trump’s plan to zero out the budgets for 19 federal agencies will undoubtedly run into three significant obstacles: Congress, logistical complexity and history.

His new budget proposal to eliminate such relatively small agencies as the National Endowment for the Arts, the National Endowment for the Humanities and the Corporation for Public Broadcasting includes targets that have long been in the crosshairs of conservative budget hawks. The agencies’ defenders on Capitol Hill are practiced in making the case for how those agencies serve the public.

Then there’s the fact that, over the decades, Congress has had little success in shutting down agencies. A prominent exception was the Interstate Commerce Commission, created in 1887 to arbitrate railroad fee rates: It finally was shuttered in 1995—after lawmakers spent two decades whittling away at its regulatory powers. It took a year to reduce the staff by 50 percent and shift its functions to the Transportation Department’s Surface Transportation Board.

Finally, there are the grants and contracts—some of them multi-year—that cannot be eliminated overnight, and would require at least a vestige staff to administer. (Trump budget director Mick Mulvaney acknowledged this on Wednesday when he told reporters that the Corporation for Public Broadcasting would retain some residual funding for a while.)

“In general, the administration seems to have an instinct that decisions can be made and that results will be instant,” Donald Kettl, a professor of public policy at the University of Maryland, told Government Executive. “It’s a tempting impulse for a ‘you’re fired!’ President. And [the idea] that big agencies and programs can be folded up, like a hotel going into bankruptcy.”

But many of the targeted agencies run a complex grant application review process following policies and goals set forth in legislation, he told Government Executive. “The process isn’t one where agency officials wake up and decide to whom they want to mail checks.”

And once the grants are made, “agency staff must monitor them and keep track of the progress and spending. Most funded grants are multi-year, and that requires a multi-year effort by the staff,” Kettl said, citing the example of the PBS television documentary series “Frontline,” which is currently funded by a $10 million grant made in 2013. “The Institute of Museum and Library Studies makes grants of up to a million dollars over a three-year period,” he added.

Even if Congress did approve Trump’s proposed cuts this fall, “many grantees have unexpended funds from previous years for projects that would continue until the money runs out. There undoubtedly are “Frontline” shows in production that would be hard to cut off half-way through. So it’s not as easy as just turning off the spigot.” And “it wouldn’t be responsible for the federal government simply to walk away from the oversight of large amounts of cash still being spent,” he said.

Paul Light, a professor of public service at New York University and a longtime student of the changing size of government, said, “Every president comes in with a hit list,” citing President Clinton’s slow-walked plan to kill off the helium reserve. “It’s hard to shut them down, but you can strangle them, then you’ve got the walking dead,” he added.

Light suggested that Trump will soon hear from his friends in Congress who sponsored programs such as the endowments. “It’s like moving bones in a graveyard,” he said, quoting a college president. “You don’t know who owns them until you start to move them.”

At the same time, every grant and contract “has a pullout clause, some escape or wiggle room,” Light said. Recipients could sue the federal government for nonpayment under a legally binding document, although the president can downsize an order in some cases.

There’s also the issue of redress for contractors. “You’re going to have to pay them for the costs of equipment for closing,” Light said. “On the grant front, it’s easier. But it’s hard to terminate them overnight.”

Agencies may be left with “a skeletal staff in an obligations unit,” Light said, Employees, however, “are not protected—there’s no obligation.”

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