Likewise, military staff includes soldiers on active duty who are not administrative employees but are nonetheless under the purview of the Department of Defense. The first president of the United States, George Washington, established the tradition of having a cabinet of advisors. The U. Constitution specifically calls for the creation of executive departments, but it only addresses the leaders of executive departments to specify that as unelected officials they must answer to the president and do not have the power to enforce their recommendations.
The three oldest executive departments are the Department of State, the Department of War, and the Treasury, all of which were established in The Department of War has since been subsumed by the Department of Defense, and many other executive departments have been formed.
The secretaries are formally in the line of presidential succession, after the vice president, speaker of the house, and president pro tempore of the Senate. In other words, if the president, vice president, speaker, and president pro temopre were all incapacitated by death, resignation, or impeachment, the Cabinet members would ascend to the Office of President in a predetermined order. The order of the departments, and the roles of the secretaries of each department, is as follows:.
In addition to the secretaries of the established executive departments, there are some cabinet-level officers who are the heads of independent executive agencies. These agencies do not answer to the president directly and, therefore, there are no executive departments strictly speaking. Still, their heads are considered high ranking advisors to the president.
These cabinet-level officers include the vice president, the chief of staff, the director of the Office of Management and Budget, the administrator of the Environmental Protection Agency, the trade representative, the ambassador to the United Nations, the chairman of the Council of Economic Advisors, and the administrator of the Small Business Administration. Department of Justice Seal : The attorney general is the head of the Department of Justice, and is a prominent cabinet member.
Independent executive agencies operate as regulatory and service agencies to oversee federal government functions. In the United States federal government, Congress and the President have the ability to delegate authority to independent executive agencies, sometimes called federal agencies or administrative agencies. These agencies are distinct from executive departments because they have some degree of independence from the President. In executive departments, department heads are nominated by the President and confirmed by Congress, and can be removed from their posts for political reasons.
Department heads, who comprise the Cabinet, therefore often turn over when a new president is elected. For example, the Secretary of State is a high status position that a high ranking diplomat in the leading political party usually fills.
Unlike in executive departments, the leaders of agencies can only be removed from office for corruption charges under statutory provisions. Even though the president appoints them, agency leadership is non-partisan, or independent from Presidential politics and election turn over.
The leaders of agencies often participate as members of commissions, boards, or councils with internal structures resembling tripartite government. One notorious function of the FCC is to regulate decency on television. To carry out this function, the FCC sets regulations defining what television programming is decent and what is indecent; if a station is accused of violating these regulations, the complaint is brought to the FCC; if the FCC finds that the programming was a violation of regulations regarding decency, it may fine the station.
The CIA helps gather intelligence and provides national security assessments to policymakers in the United States. It acts as the primary human intelligence provider for the federal government. The National Aeronautics and Space Administration NASA, is a government agency responsible for the civilian space program as well as aeronautics and aerospace research.
The EPA was created for the purpose of protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress.
EPA enforcement powers include fines, sanctions, and other measures. Constitution does not explicitly reference federal agencies. Instead, these agencies are generally justified by acts of Congress designed to manage delineated government functions, such as the maintenance of infrastructure and regulation of commerce.
Once created, agencies are considered part of the executive branch of government and are partly regulated by government parties. However, executive agencies have to remain nonpartisan. Use the work of the FDA as an example to describe the activity and mission of regulatory agencies more broadly.
A regulatory agency is a body in the U. Government corporations, on the other hand, generally receive most, if not all, their funds from users of their services. Thus, the latter relationship has a business character in which it is the obligation of the corporate body to provide services as long as the buyers are willing to pay. This being the case, revenues, expenditures, and even personnel will tend to fluctuate according to consumer demand. Many Members of Congress feel somewhat uneasy with broad, "business type budgets," also referred to as "budget programs.
Faced with complex projections and agencies with little direct budgetary impact, Members understandably give corporate bodies marginal attention. As a general assessment, the corporations come under comparatively little congressional scrutiny, except when there is some political or financial threat evident. As Seidman notes, "In essence, the business-type budget provides for a qualitative rather than a quantitative review of proposed corporate expenses.
At the request of GAO, the GCCA was amended to provide for audits of the financial transactions of wholly owned corporations at least once every three years, rather than annual audits. Henceforth, however, the audit is to be conducted by the corporation's inspector general "or by an independent external auditor, as determined by the inspector general or, if there is no inspector general, the head of the corporation," according to accepted government auditing standards.
The location, structure, and governance of government corporations varies greatly. Corporations have been located in executive departments e. Lawrence Seaway Development Corporation in the Department of Transportation , or assigned independent status e.
Government corporations have been structured so that they are but financial entities whose employees are actually employees of the parent agency e. There is no one form of governance necessarily associated with government corporations. Whether a government corporation is best managed by a full-time board e. There are positives and negatives to the various options for corporate governance.
A board of directors is the trademark of a government corporation, according to many lawmakers and attorneys. Marshall Dimock, an academic writing in , argued that a board of directors was considered an essential element for an "authentic" government corporation.
A few years later, Harold Seidman challenged the view that a board of directors was an essential and necessarily desirable element for a government corporation. Dimock's view, he asserted, was based on an inappropriate borrowing of state practice by the federal government.
State incorporation laws require boards of directors for private corporations to insure representation where ownership is held by more than one party. In government corporations, under this reasoning, because ownership resides in the government alone, there is no inherent need for a board of directors. A board of directors may well be found advisable and useful under some circumstances, but, Seidman said, it is not the sine qua non of a government corporation. Whether or not a board of directors is essential or desirable for a government corporation, the fact is that all but two federal government corporations presently have boards of directors.
The two exceptions are Ginnie Mae and the St. Lawrence Seaway Development Corporation. In a study published in , the National Academy of Public Administration was critical of boards of directors in general:. We believe that this arrangement, borrowed from the private corporation model, has more drawbacks than advantages and that in most cases the governing board would be better replaced by an advisory board and the corporation managed by an administrator with full executive powers.
A governing board may cut or confuse the normal lines of authority from the President or departmental secretary to the corporation's chief executive officer. With an advisory board, the secretary's authority to give that officer policy instruction is clear, as is the officer's right to report directly to the secretary and to work out any exemptions from or qualifications of administration or departmental policies and practices which the corporation requires.
There is little doubt that a board of directors, particularly a part-time, "outsiders" board, is a "buffer" between the corporation's top executive and political officials, including the President. Whether such a buffer is a desirable feature in the overall administrative system, however, is a question subject to debate. Notably, it is also argued that corporation board appointments are patronage plums for the White House since the jobs are not generally demanding.
The effectiveness and utility of boards is dependent upon a number of factors: the coherency of the enabling legislation, the conceptual integrity and soundness of the program itself, and the number and quality of membership. Large boards comprising more than 12 members , for instance, may experience difficulty in making decisions. The play of internal factors, such as the size of the board, the primary loyalties of board members whether to the corporation or to an outside constituency group , and the relationship of the board to the corporate management all also have their place in the managerial equation.
There is, at present, little central management agency oversight or supervision of government corporations as a category of agency in the executive branch. Nor is there any central unit charged with designing government corporations from the perspective of presidential or central management interests. Individual corporations come under scrutiny from time to time by OMB and Congress, or more precisely, a congressional committee responsible for oversight.
More often than not, the immediate impetus for the oversight follows from indications that a corporation is operating at financial risk or there is an appearance of wrongdoing. The current absence of systematic oversight of corporations as a class runs counter to the intentions of the sponsors of the GCCA. The Bureau of the Budget BOB , predecessor organization to OMB, was instrumental in the passage of the GCCA, and created a separate office to oversee the formation, and monitor the operation, of government corporations on behalf of the President.
During the s, this specialized staff function atrophied until at some point in the s it is fair to conclude that there was little remaining central executive staff capacity to provide information, expert advice, or oversight of government corporations or to develop and implement consistent policies governing their formation, authorities, and operations. Government corporations are not considered by OMB to be a category of organization to be supervised collectively.
OMB, in support of its position, contends:. The responsibility for oversight of government corporations was not changed by the OMB reorganization. That is, government corporations will continue to be reviewed by the Resource Management Office RMO which has responsibility for the functional area most closely associated with the corporation's mission OMB does not review government corporations separately from other government organizations that perform similar functions.
The executive branch treatment of management responsibilities respecting government corporations as a class of organization tends to place additional burdens on Congress and its committees to determine if the corporations are respecting the provisions of the general management laws e. One corollary of limited central management oversight of government corporations is the lack of answers to fundamental issues regarding when and how government corporations ought to be created and utilized.
There are at least two schools of thought respecting the proper use of the government corporation option relating to its structure, authority, and financial systems. One school holds that government corporations, including agencies called corporations but which do not perform commercial activities, should be encouraged, provided maximum policy and financial autonomy, and be subject to such oversight as is appropriate for other agencies and instrumentalities in the same policy field.
The legal responsibilities of the corporation should be located in its enabling statute. The position of the second school is that government corporations should be established only when appropriate criteria and standards, developed by a central management agency, are met.
Such standards should be reflected in a national incorporation law and apply to all proposed and functioning corporate bodies properly defined.
Government corporations should be considered to be part of the executive branch, but with recognition of their distinctive needs and oversight requirements as a category of institutions.
The government corporation concept may be considered a useful alternative to privatization of some agency, or it may be employed as a transition step toward eventual full privatization. The principal utility of the transitional government corporation is that it can demonstrate marketability and asset value, critical elements in any successful privatization venture. An early successful example of the government corporation concept as a transition vehicle involved Conrail.
Conrail was created by Congress as a government corporation in from the remnants of seven private, bankrupt railroads. The transition period as a government corporation was necessary to develop a record as a potentially profit-making venture prior to a successful privatization divestiture effort.
More recently, the U. Enrichment Corporation USEC has completed its transitional process toward full privatization, with mixed results. In the s, the plants produced highly enriched uranium HEU for defense purposes. Times changed and the United States was successfully challenged by new international entrants into the market.
The Energy Policy Act of P. Enrichment Corporation as a wholly owned government corporation. The general intent of the legislation was to "privatize" the two plants and let them compete in the world market. The plan suggested that there were two primary methods of corporate divestiture: an initial public offering IPO and a merger or acquisition with another corporation or group of corporations.
The USEC transition process highlighted, however, one of the perennial problems in privatization efforts. Congress may intend a corporation to be private, but it also may want the corporation to continue to be involved in public policy implementation. In this instance, Congress wanted the corporation to participate in implementing a foreign policy objective, which was to purchase at above market rates a substantial amount of Russian enriched uranium otherwise destined for Russian weapons.
Under the HEU agreement, the USEC received enriched uranium from Russian nuclear weapons and, in addition to its payment for the material, returned an equivalent amount of natural unenriched uranium to Russia to sell on the world market.
This arrangement, from the corporation's perspective, was not viable and in October , the USEC solicited Congress for "relief. Another characteristic of a private corporation, legally organized and defined as such, is the right to cancel a program or withdraw from an activity if it is not deemed in the fiduciary interests of the shareholders.
The board's decision made manifest the fiduciary distinctions between a government and private corporation. The federal government may, for whatever reason, choose to directly divest itself of a commercial activity or asset and not follow the transition corporation option to establish its value in the market. Although a transition corporation had been recommended by an outside study, 49 the Department of Energy determined to directly divest itself of the California fields of the Elk Hills National Petroleum Reserves.
The government corporation form of federal agency is a useful option to consider when establishing or reorganizing an agency with revenue potential. It is helpful to bear in mind, however, that there is no general provision in law that defines what, precisely, government corporations are. When writing the GCCA, Congress and the executive branch simply viewed the various corporate bodies, and defined them by enumeration, rather than by required characteristics.
This relatively unstructured approach has meant that some corporate bodies e. Postal Service are not included in the GCCA enumeration, whereas other bodies, arguably non-corporate in function and authority e. There is little managerial oversight at present of government corporations as an institutional category by either the President or Congress.
What oversight there is tends to be corporation-specific. In the case of Congress, corporations are assigned to committees of subject-matter jurisdiction.
A GAO report recommended that corporations properly require both subject matter and management oversight, and that the GCCA should be reconstituted to establish in law the characteristics of various types of corporate bodies. Government corporations may be viewed as permanent agencies to perform a continuing governmental function e. Enrichment Corporation. These options indicate the flexibility of the government corporation concept and may provide models for extending the corporate organization to other appropriations-funded agencies e.
Patent and Trademark Office and the U. Both the latter agencies and their programs meet the basic criteria for a government corporation and suggestions to this effect have been made. The future of government corporations as a category of federal organization appears generally bright although they are not widely understood in executive management circles.
The need for the executive branch and Congress to develop new organizational structures that take into account both the public law requirements of governmental status, and the flexibility that properly accompanies corporate bodies dependent upon revenues for services may increase. If the conceptual basis of the law establishing a corporation or economic assumptions therein are faulty, as was allegedly the case with the Synthetic Fuels Corporation in the late s, a government corporation may become a liability to the executive branch and face a short tenure.
Although it has been the purpose of this report to emphasize the distinctive characteristics of federal government corporations, it is important to conclude with a statement of their shared characteristics with other federal agencies.
The mission of both regular, appropriations-financed agencies and of government corporations is the same, to implement the laws passed by Congress. Thomas H. Governments strive to fulfill the needs of all of its members and to provide a sense of wholeness and a national identity to a particular country or people. The term is directly associated with power and ruling, bureaucracy, politics, and the system to govern a certain society or people. Government is also often associated with the State.
On the other hand, business is more associated with trade, occupation, commerce, and transactions that involve the profit making of a particular person or industry. The term is also used in the mechanism of providing goods and services to a willing market. The similarities between business and government are not easily recognized at first. Both are systematic organizations. They both have appointed leaders and members. Businesses are created to stimulate profit for the individual or for a small group of people, while the government generates its own profits from taxes and other forms of fees accompanied by government services and transactions.
As a system, both business and government have their own set of laws. However, the laws made by the government often have a wider jurisdiction than individual business laws. Moreover, the government creates laws for the business sector, while the sector itself cannot create laws unless they pertain to the business itself.
It cannot contradict and must follow what is already imposed by the government at risk of getting shut down due to violation. Governments have a wider jurisdiction compared to businesses. Governments also have numerous agencies that cater to public services. The institution provides a sense of equality as well as national identity. On the other hand, businesses provide people with opportunities to earn and make money with their skills and talents.
The government provides the business an opportunity and legality to earn profits in return for taxes. Government laws regarding trade, operations, and transactions are implemented and incorporated in many business laws. A certain corporation or business must adhere to the existing government rules and standards aside from their own business practices and concerns.
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