The largest employer in the entire city began laying off employees, providing economic forecasts for recession for Washington, D.C. Real estate agents are preparing for a downturn in housing. The existence of the city itself is directly threatened, which manages the daily affairs of a city.
The Trump administration’s unrest with Washington, which the president sees as a castle of what is called a deep state, must also mean turmoil against the real Washington, a metropolitan area of millions of people who work every day.
With more than 300,000 federal government employees, the capital and surrounding areas are one of the country's well-educated and well-compensated labor force. The important role of the federal government in the local economy has enabled the region to survive the recession better than most of the country. But times are changing.
“For the District of Columbia, the federal government has been a reliable pillar of stability,” said Yesim Sayin, executive director of the DC Policy Center of Research Organization. “I’m not like that anymore.”
The Trump administration, along with Elon Musk and its initiatives, known as the Ministry of Government Efficiency, has brought the hammer to the pillar of stability. The president first had the order of Day 1, revoking the flexibility of federal employees to work remotely, and changes will only intensify after that, with the announcement of a round of layoffs, the round of changes. Nationwide, 75,000 federal employees have filed resignations to respond to incentive offers, and Mr. Musk announced that if allowed to pass, it means that thousands of workers will lose their jobs.
Dan Binstock, a partner at Garrison, a Washington-based legal professional search firm, said his office received 10 times more from lawyers hired by the federal government, just like it usually does after the president’s transition. “The floodgates are open,” he said. Exodus created a logjam in the private sector. “There is a feeling of helplessness because there is not enough space or opening to absorb everyone.”
Terry Clower, director of the Center for Regional Analysis at George Mason University in Northern Virginia, said that an economic slowdown in the entire metropolitan area is guaranteed. Due to all the uncertainty, federal workers, and even many private enterprises, may be backing off. But whether this will slow down the economy to worsen things depends on the courts posing a lawsuit in many lawsuits that challenge government actions.
“If they did a big part of what they said they were going to do, I don’t see the idea that we could get into a recession this year,” he said.
State and local officials are preparing for the thick waters. Virginia has formed an emergency committee to respond to Trump administration’s actions involving the federal workforce, House Speaker Don Scott announced that so far the plan “caused the economy of Virginia and able to maintain essential capacity services.”
Democrat Wes Moore in Maryland, a Democrat warned in his annual national speech on February 5 that “the new leadership in Washington could pose a danger to our economy”. While the historic relationship between the capital and Maryland almost revolves around it, Mr. Moore said it was time to break the state’s “obviously dependent on Washington.”
So far, the city leaders in the District of Columbia have become even more confused. Mayor Muriel Bowser, who was in her third term, headed to Mar-a-Lago before talking to Mr. Trump before the inauguration and later said they “discussed the place.” and the federal government’s areas of cooperation.”
As the mayor himself suggested, this diplomacy is strategic as long as the city is “indifferent to the whimsical of Congress and the president.”
Since the passage of the Washington, D.C. Family Rule Act in 1973, Washington residents have a direct say in the management of their cities, which provides for the election of the mayor and the local legislature of the District of Columbia. Congress retains the power to veto local legislation in Congress without a vote—just like in 2023, preventing a rewrite of the city’s criminal law—the White House nominates the city’s local judge and appoints the top prosecutor.
Politicians on the right have long liked to slam Washington, which is usually the government’s punch-punch bag, although more than four-fifths of all federal employees live and work elsewhere. But their contempt for the city is rarely so clear.
Republican lawmakers have proposed a series of legislation against DC, including a bill named after the current mayor, which would deprive the city of already limited ruling, which has more than 700,000 residents.
On Wednesday, Mr. Trump called DC a “dirty and criminal embarrassment to our country” and seemed to be considering these routes. “I think the federal government should take over the governance of Washington, D.C.,” he told reporters.
Mayor Bowser expressed regret to the president's speech on Thursday. “It makes people in our community anxious, it makes our policy makers anxious, our business anxious, it’s just unnecessary distractions,” she said.
If DC does stick to autonomy, then Mr. Trump’s continued crusade against Washington and the collateral damage it will cause locally makes the city’s long-term vision even more urgent.
Over the past decade, Washington has tried to reduce its reliance on local employers. Before the pandemic, more and more office spaces in urban areas were vacant. Poor health in the city’s downtown area has become an urgent matter after Covid ushered in extensive remote work. The mayor asked the Biden administration to terminate remote work for federal employees or put some unused federal buildings on the market. The long-term goal of city leaders is clear: diversify the DC economy.
“We are no longer just the federal government,” said Nina Albert, deputy mayor of Program and Economic Development, in a recent interview. “We are also a variety of businesses, cultural institutions and The location of emerging businesses, especially in technology and other types of industries. So we tend to be more inclined to this.”
Mr. Trump's order to end telework will bring some federal workers back to downtown, and plans to unload some of the government's real estate holdings could lead to new mixed-use communities in the city. The downturn in the real estate market may even contribute to housing affordability. But all of this will be at a huge cost.
“While we want people to return to work, we've seen some, but we've also seen a lot of job losses,” the mayor said Thursday.
When asked how Washington, D.C. will endure recent economic uncertainty, Ms. Albert highlighted the city’s thriving tourism industry. She noted that in May and June, the city plans to host World-Pride, an international LGBTQ rights celebration that officials estimate could attract between 2 and 3 million people. Festival organizers announced a lineup of performers on Tuesday, including Jennifer Lopez and Grimes, the mother of three Musk children.
Even so, there is little shadow in the city that transcends its famous new inhabitants. On February 6, Egalera Canada, one of the country's largest LGBTQ rights organizations, announced that the organization will not participate in the world advantage due to concerns about Trump's administration's policies. A few days later, Booz Allen Hamilton, a major federal contractor and former supporter of the Pride incident in Washington, D.C., announced that it was withdrawing its sponsorship for the festival.
