My sources tell me that one of the Obama transition teams is reviewing the proposal to merge the USGS and NOAA.
I blogged about this back in July when a group of distinguished Earth scientists and science policy leaders proposed the merger in an op-ed piece in Science.
Update (4:50 pm): There's been a lot more online debate about this in the climate blogging community. Here are some links. The first one has extensive history and links to other sources.
Consolidation of Science Agencies: An Ongoing Debate
Attn Obama: Earth science agency merger
Change for America:A Progressive Blueprint for the 44th President
Chapter on: The U.S. Space Program: Restoring Preeminence in Space Science and Exploration, by Neal Lane and George Abbey: "Consideration also should be given to the suggestion that NOAA and USGS be combined to form a new Earth Systems Science Agency."