Media playback is unsupported on your device Media caption President Obama: "With this authority, we would help businesses grow, save businesses time and save taxpayer dollars"

US President Barack Obama has thrown down the gauntlet to Republicans by asking Congress for the power to shrink the federal government.

He told business leaders that he wants to close the US commerce department and merge six agencies.

The White House said the plan would save $3bn (£2bn) over 10 years and cut 1,000 to 2,000 jobs through attrition.

The proposal is seen as an attempt to counter Republican criticisms that Mr Obama is a big-government liberal.

With November's general election on the horizon, it is not clear whether congressional Republicans will grant Mr Obama's request for such reorganisational powers.

'Not OK'

The authority to make such changes was last wielded when President Ronald Reagan was in office.

It's interesting to see the president finally acknowledge that Washington is out of control Don Stewart, Senate leader's spokesman

Lawmakers are expected to vote on whether to bestow it on Mr Obama within the next 90 days.

"With this authority, we'd help businesses grow, save businesses time and save taxpayer dollars," Mr Obama said, as he outlined the plan at the White House.

The president said his proposal followed discussions with business and agency leaders over many months.

"No business or non-profit leader would allow this kind of duplication or unnecessary complexity in their operations," he said.

"So why is it OK in our government? It's not. It has to change."

The six agencies that would be consolidated are the Department of Commerce, the Small Business Administration, the Office of the US Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency.

The White House said that small businesses were confused by a perceived overlap between various agencies.

Senate Republican Minority Leader Mitch McConnell pledged to review the plans carefully.

His spokesman Don Stewart said: "After presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it's interesting to see the president finally acknowledge that Washington is out of control."

In his last State of the Union speech, Mr Obama drew attention to inefficiencies within the federal government.

He said: "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. And I hear it gets even more complicated once they're smoked."