1 in 5 federal jobs could disappear in D.C.
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D.C. has a White House-induced economic slowdown. Photo: Brendan Smialowski/AFP via Getty Images
An early, overly optimistic view of the Trump administration's government overhaul saw 160,000 federal workers fully returning to offices as the final missing piece for the District's economy.
Why it matters: The mayor's circle wanted to believe this — so did downtown landlords, local liberals looking for a silver lining in November's election, and anyone who wishfully ignored President Trump's threats to gut the bureaucracy.
Reality check: Rather than insulate D.C. from a financial downturn, the federal government is causing one.
- With the capital city's factory shrinking, D.C. is expected to enter a "mild recession" in the next fiscal year, D.C.'s chief financial officer Glen Lee warned last week ahead of next month's budget release.
By the numbers: One in five federal jobs in D.C. could disappear over the next four fiscal years.
- The city government would be at least $1 billion poorer, the CFO said, marking down annual revenue by $342 million.
- There are no easy fixes. D.C.'s boom in the 2010s built a giant piggy bank. But the next four-year budget plan "exhausts approximately $2.3 billion of accumulated surpluses," Lee wrote.
Progressive programs will feel the most pain when Mayor Muriel Bowser releases her budget proposal in early April.
- Bowser also needs to replenish the city's savings accounts. When added up, D.C.'s four reserves are short $400 million. That replenishment will need to happen sooner rather than later.
What we're watching: A new crisis could land after Bowser releases her budget — Congressional Republicans could take an ax to Medicaid. The feds fund 70% of Medicaid expenses in D.C., totalling $3.6 billion.
- "If Congress passes a budget that cuts our Medicaid funding amount, we don't have a gap; we have an abyss," one city official told me, requesting anonymity to speak candidly about budget deliberations.
What's next: None of this budget blood is making Bowser flinch from spending taxpayer dollars on a new football stadium at RFK. The Washington Commanders and the city are working on a redevelopment proposal — TBA by the budget. If anything, the mayor hopes the project will bounce back the economy.
- "Who wants to look around in four years and see the same thing at RFK?" Bowser told reporters on Monday.
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