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Trump reorganization plan may spell major changes for OPM

Under the Trump administration’s reorganization initiative, the Office of Personnel Management may be a much smaller agency and may carry far less influence as the government’s independent entity responsible for administering longstanding merit principles, federal employee benefits and other human resources services.

Multiple sources have told Federal News Radio the administration is considering a significant reorganization of OPM’s current functions.

The administration is expected to announce the moves Thursday as part of its forthcoming government reorganization report.

Agencies have been preparing reorganization plans since President Donald Trump signed an executive order and the Office of Management and Budget offered more guidance on the topic last spring. Agencies have kept the details of these plans largely under wraps, but the departments of Agriculture, Health and Human Services and Interior have been preparing high-profile programmatic moves.

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As Federal News Radio previously reported in April, the administration has been considering a move of two large OPM programs: the National Background Investigation Bureau’s (NBIB) governmentwide security portfolio and HR Solutions.

Those moves are expected as part of the administration’s coming reorganization plan.

To carry out the transfer of the entire governmentwide security clearance program, two sources say the administration may direct the Pentagon to rename the Defense Security Service as the Federal Security Counterintelligence Agency (FSCA). The FSCA would serve as the primary governmentwide security clearance provider, a responsibility OPM held since the Pentagon first gave up the program in 2005.

HR Solutions, which currently offers products and services to help agencies with their human resources needs, would move to the General Services Administration.

In addition, multiple sources said the reorganization may also include a move of OPM’s health care and retirement services to GSA.

And sources said GSA would get pulled into the mix and may potentially get a new name, the Government Services Agency, reflecting the new governmentwide services it would provide.

What remains of OPM, namely its policy offices, may be moved as a new entity under the Office of Management and Budget, sources said.

Losing both NBIB in its current form and HR Solutions would have significant implications for OPM, which relies on both a revolving fund and a total appropriation of nearly $261 million in fiscal 2018. Not only would the agency lose two of its highest earning activities, but the transfer could also create financial instability for OPM.

HR Solutions brings in about $206 million, while the NBIB generates about $1.4 billion, according to OPM’s 2019 budget justification to Congress.

A loss of federal health care and retirement programs would also create a gaping hole in OPM’s portfolio. The agency administers health and retirement benefits to more than 2.7 million active employees and nearly 2.6 million annuitants, survivors and their family members through the Earned Benefits Trust Funds, which have close to $1 trillion in combined assets.

A move of these four functions also begs broader questions about the philosophical direction the administration is planning for OPM and future federal workforce policy creation. OPM Director Jeff Pon, who has been in office for roughly three months, has championed his agency as the face of the administration’s civil service modernization plans.

OPM referred all questions about the potential moves to OMB.

OMB did not respond to multiple requests for confirmation or comment on these moves. An email to the GSA also went unanswered.

It’s unclear how exactly the administration expects to carry out an OPM reorganization.

Congress authorized OPM as an independent agency in the Civil Service Reform Act of 1978. In creating OPM, lawmakers transferred many functions from the U.S. Civil Service Commission, the agency once responsible for ensuring agencies upheld common merit system principles.

It’s unclear whether the president would have executive authority to split various offices and functions from a statutory agency — or whether such moves would require congressional action.

In addition, the 2018 omnibus, which Congress passed in March, appears to complicate the Trump administration’s reorganization initiatives. According to the omnibus, agencies cannot simply cut or eliminate a specific program or office unless Congress has authorized the move in an appropriations bill.

“None of the funds made available in this or any other appropriations act may be used to increase, eliminate or reduce funding for a program, project or activity as proposed in the president’s budget request for a fiscal year until such proposed change is subsequently enacted in an appropriation act, or unless such change is made pursuant to the reprogramming or transfer provisions of this or any other appropriations act,” the 2018 spending bill reads.

Neither the House nor the Senate has finalized its financial services and general government appropriations bills for 2019, but the House draft carries a similar provision as the 2018 omnibus.

OPM’s role in government has evolved since 1978, particularly in the mid-1990s and early 2000s, when the agency’s leaders created a revolving fund of human resources services and took responsibility of the governmentwide security clearance portfolio from the Pentagon.

Sources say the administration’s upcoming plan for OPM stems from a deep dissatisfaction with the agency in recent years. Two separate data breaches of OPM systems compromised personally identifiable information for roughly 22 million current and former federal employees, contractors and others.

Under OPM, the NBIB has struggled to quickly tame a backlog of roughly 700,000 pending background investigations. Since OPM in 2014 decided to drop the largest vendor performing security clearance work, it has been unable to recover and keep up with a mounting workload.

Lawmakers have long been frustrated by the backlog and long wait times for a completed investigation, and they approved a plan to transfer defense-related security clearances from NBIB to the Pentagon in last year’s defense authorization act.

The Trump administration has been monitoring these challenges from afar and recently named the security clearance program as one of its 14 key initiatives under the President’s Management Agenda.