White House Budget Revives Trade, Food Safety Consolidation Plans, Boosts Trade Agencies

President Barack Obama’s fiscal year 2016 budget proposal revives a previously-floated but unapproved plan to consolidate some federal trade agencies into one agency, and the two largest food safety agencies into one shop as well, the White House said in its budget release on Feb. 2 (here). The budget proposal asks Congress to give the White House more power to unilaterally make consolidations and cuts. Obama has asked for that consolidation authority several times over recent years (see 12021417).

The White House’s consolidation plans aim to bring together the Commerce Department’s business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency. Obama’s proposal also outlines his plan to consolidate the Food Safety Inspection Service with the food safety functions of the Food and Drug Administration.

The budget proposal also lays out specific budget recommendations for all other federal trade agencies. Many lawmakers, including Republican leadership in both chambers of Congress (here), have criticized Obama's budget, and budget legislation may differ significantly.

Food and Drug Administration

The FY 2016 budget request includes over $100 million in additional funding for the Food and Drug Administration to continue implementation of the Food Safety Modernization Act, said the agency (here). FDA is currently under a court order to issue all final FSMA regulations by May 2016, with some final rules required as soon as August 2015 (see 14022124). Nearly a quarter of the additional funding would go toward retraining over 400 current staff and hiring an additional 50 to perform audits of importer safety plans under the Foreign Supplier Verification Program, said FDA. The rest of the funding would go toward retraining FDA staff in the agency’s new risk-based inspection model; building the capacity of state food safety regulators; technical assistance for industry, including importers; developing new guidance; and developing new risk analytics and evaluation tools, it said.

The budget request also proposes consolidating the food safety functions of FDA with those of the USDA’s Food Safety and Inspection Service to create a new food safety agency, separate from FDA, under the Department of Health and Human Services. The two agencies’ fractured oversight – as an example, the administration notes FSIS inspects open-face meat sandwiches, while FDA regulates closed-face sandwiches – creates confusion among industry, said the budget request (here). So do the two agencies’ different regulatory approaches, with FSIS inspecting all regulated products and FDA relying on a risk-based approach. “A single Federal food safety agency would provide focused, centralized leadership, a primary voice on food safety standards and compliance with those standards, and clear lines of responsibility and accountability that will enhance both prevention of and responses to outbreaks of foodborne illnesses,” it said.

The Alliance for a Stronger FDA praised the proposed budget increase, which also adds funding for the agency’s drug and device-related programs, but said it still falls short of what the agency needs to meet its expanding responsibilities (here). "We urge the House and Senate appropriations committees to recognize the same FDA needs that the President has,” said Jeff Allen, president of the advocacy group. "The additional funding for food safety, precision medicine, drug compounding oversight, and antibiotics development will make a huge difference at the agency. At the same time, however, we can also point to other FDA programs that need and warrant additional funding,” he said.

The Commerce Department

Obama asked Congress to fund the International Trade Administration at $497 million (here), $25 million above fiscal year 2015 appropriations (see 1412170007). The White House’s budget would also boost the allocations for the Bureau of Industry and Security, from its current $102.5 million to $115 million. The proposal targets $15 million of the ITA allocation for the development of the International Trade Enforcement Center. The proposal also aims to boost Trade Adjustment Assistance and U.S. manufacturing through a broad range of Commerce initiatives.

The International Trade Administration specifically asks for $1.5 million and seven full-time employees to combat antidumping and countervailing duty evasion, the Commerce budget round-up said. Those funds would help the agency monitor new shipper data and “conduct onsite verifications.”

The State Department

The White House asked for $131.5 million for the International Trade Commission, an independent agency, as part of the State Department budget (here). That figure marks a massive, more-than-$48 million increase in ITC funding, compared to FY14 spending. The budget would also give $875 million to the Export-Import Bank.

The State Department budget allocates roughly $23.3 million to the World Trade Organization, a drop of nearly $3 million compared to FY14 spending levels. The State FY16 budget also gives just over $4 million to the Customs Cooperation Council. That figure marks a more than $200,000 cut for the CCC from FY14 levels. The White House also asked for funds to tackle trade initiatives spanning the globe, but notably the Asia-Pacific region. And the budget asks for money to keep in place the White House’s task force on illegal wildlife trafficking (see 13070201).

The Department of Homeland Security

The White House called for budget authorization for 21,370 Border Patrol agents and 23,871 CBP officers. That CBP officer level exceeds the Senate Democratic Appropriations request for FY15 by nearly 100 officers (see 1501290033). The proposal includes inspection equipment improvements at U.S. ports (here).

Obama's DHS budget also calls for $12.6 million for Revenue Modernization, it said (here). The modernization will "support CBP customs enforcement and Revenue back office operations by enhancing the speed, accuracy, and controls over collections through direct, electronic deposits," it said. The updates will also "enable access to real-time, reliable financial and operational data to inform decision making and comply with existing and emerging reporting requirements from Treasury, Congress, DHS, and OMB."

The Office of the U.S. Trade Representative

The budget would give USTR $56 million for FY16. That figure edges out current spending levels by $1.75 million, the agency said in a statement. “The budget puts more resources where we need them to hold other countries accountable when they don’t play by the rules and to help us export more Made-in-America goods and services,” said USTR Michael Froman in the statement.

The Agriculture Department

The USDA request seeks a $5.5 million increase to improve enforcement of the Lacey Act. Trafficking of illegal natural resources hampers U.S. manufacturing and harms the environment, said an Agriculture run-down of the budget. “USDA is working with the Department of Justice, the Department of State, the Department of Interior, the Department of Commerce and the Council on Environmental Quality to implement the provision of the Act, and will use the additional funding to move to an automated import declaration system and to maximize the number of products subject to Lacey Act review,” said the run-down.

On top of the FDA and FSIS consolidation, Obama’s budget recommends transferring five rural business cooperative services programs, Business and Industry Guaranteed Loan Program, Rural Business Development Grant Program, Intermediary Relending Program, Rural Microentrepreneur Assistance Program and the Rural Business Investment Program, to a new department that would focus on U.S. competiveness and exports.

The Department of Transportation

The FY16 budget urges Congress to put in place legislation to boost multi-modal transportation funding by nearly $500 billion over a six-year period (here). It also would give $22.3 billion for the National Highway System, which facilitates 98 percent of trade with Canada, said the White House. The American Association of Port Authorities applauded that recommendations, but said the budget proposal makes cuts to “maintenance and modernization of federal navigation channels.” The proposal will slash U.S. Army Corps of Engineers’ funding roughly $0.4 billion to $1.95 billion, said AAPA (here).

National Economic Council Director Jeff Zients, an economic assistant to Obama, said the budget "goes very big" on infrastructure during a budget briefing with reporters (here). The six-year plan "allows us to fund at about 40 percent above the current level that is spent and there are main high return investments," said Zients.

Meanwhile, a number of Georgia lawmakers praised the inclusion of funds for the Savannah Harbor Expansion Project (SHEP) (here). The budget proposal would give nearly $30 million for Savannah harbor expansion and dredging waste in Georgia and South Carolina, said a statement from the lawmakers. “After the shock and disappointment we felt last year when SHEP was omitted from the president’s budget, the inclusion of funding today for our state’s number one economic development project in the president’s budget is welcome but long overdue,” said Sen. Johnny Isakson, R-Ga. “In addition to providing funding in the Fiscal Year 2016 budget, I’m pleased the Army Corps of Engineers has indicated that it is also working to secure an additional $21 million dedicated to the Savannah project in the Corps’ budget for this year’s FY15 budget.”