WASHINGTON – It was a big laugh line in President Obama’s State of the Union speech: “The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them when they’re in saltwater. I hear it gets even more complicated once they’re smoked.”

Behind the joke was an ambitious promise to tame and reorganize segments of the federal bureaucracy. If Obama’s new chief of staff, Bill Daley, wields any influence, a primary target will be the Commerce Department.

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Bruce Babbitt, left, the Interior secretary at the time, reaches to shake hands with then-Commerce Secretary William Daley after signing an agreement in June 1997 in which Indian tribes would protect fish and wildlife on their own lands. Daley, now President Obama’s chief of staff, once observed that because the Commerce Department oversees the National Oceanic and Atmospheric Administration, the commerce secretary “spent 60 percent of his time dealing with fish.” Proposals are afoot to streamline the department. Associated Press file photo

Its 38,000 employees oversee a diverse portfolio, from helping businesses and conducting the census to providing accurate weather forecasts and granting patents and trademark protection.

Daley knows the department inside and out. He ran it during the Clinton administration.

Early last month, before Obama named Daley as his top aide, a Democratic-leaning think tank that has been a source of many Obama administration policy ideas laid out a plan to streamline the Commerce Department and sharpen its focus on making U.S. businesses more competitive — the new clarion call at the White House.

Seated with the leaders of the Center for American Progress that day was Daley, who once observed that because the department oversees the National Oceanic and Atmospheric Administration, the commerce chief “spent 60 percent of his time dealing with fish.”

Indeed, Daley provided the salmon anecdote to the White House, just like he did earlier to center researchers who included it in their Dec. 1 report.

“There’s no question there has to be some reorganization around these issues because it is ridiculous,” Daley said upon the report’s release. “Those of us who have been there — you often wonder why NOAA’s there.”

Thinning the bureaucracy is a perennial quest for politicians who cast themselves as reformers.

They don’t often succeed.

House Republicans led by Speaker Newt Gingrich in 1995 had grand visions of eliminating the departments of Education and Energy. Vice President Al Gore got credit for a high-visibility “reinventing government” program during the Clinton administration. It did trim government but did not win long-lasting institutional changes.

The last successful consolidation came after the attacks of Sept. 11, 2001, when Congress merged 22 agencies to create the Department of Homeland Security. But the reordering has not applied to Congress, where more than 100 committees or subcommittees oversee the department.

Sen. Mark Warner, D-Va., who has taken the lead in the Senate on issues of commercial competitiveness, said he was encouraged by Obama’s approach, but is wary.

“Most federal employees have heard this before and they feel like administrations pay lip service to this,” he said.

The president, in his State of the Union address, did not detail what agencies he would seek to merge, consolidate or reorganize. But the administration has often worked with the Center for American Progress on policy matters. It embraced a recent center proposal to create a panel to advise the president on how to better position U.S. businesses in the global marketplace.

But Obama, in the State of the Union address, said he would seek change “that best serves the goal of a more competitive America.” White House spokesman Robert Gibbs later referred to the “overlap of trade issues and export issues.”

In Daley, Obama has a chief of staff with a stated appetite for change.

As Daley put it last month, in reference to attempts to reorganize how the bureaucracy works: “No question that unless you’ve been in the government, you really can’t understand how screwed up it is when it comes to these sort of discussions.”

Warner said Daley, as a former Cabinet member and as a top executive at JP Morgan Chase, brings a unique perspective.

“He’s been in the belly of the beast.”

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