'Spending chill' in US capital as DOGE cuts threaten to 'upend city finances'
People biking on road and different vehicles viewing United States Capitol during daytime. Photo by Andy Feliciotti on Unsplash
President Donald Trump and tech billionaire Elon Musk's rapid efforts to curb government spending is likely to disrupt the economic machinery that shaped contemporary Washington, Bloomberg reported on Wednesday. Musk's Department of Government Efficiency (DOGE) has dismissed thousands of federal workers and aims to shut down agencies, terminate leases and cancel billions in government contracts.
According to the Bloomberg report, the nation's capital will likely lose 40,000 federal jobs, or 21 percent of its federal workforce. This situation has led civic leaders to get ready for "a spending chill at local businesses, turmoil in office and housing markets and reduced tax collections that could upend city finances."
Glen Lee, the chief financial officer for the District of Columbia, told Bloomberg she has never seen a situation like this.
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“I've been in this business a long time, more than three decades, and I’ve never seen a situation where our forecast has so much uncertainty,” she said.
Amid this challenging situation, the district is experiencing a significant budget crunch that may lead to substantial reductions in police funding, education, and various city services. Meanwhile, employees affected by the federal layoffs are assessing the limits of their savings. Many are delaying important career and relocation decisions as they wait to gauge the severity of the situation, per the report.
The Bloomberg report notes that certain economists argue the stability of Washington has been achieved at the cost of the dynamic qualities that could have enhanced the region's resilience. According to Moody’s Analytics, the district ranks last in industrial diversity when compared to US states.
The report also quoted Terry Clower, director of the Center for Regional Analysis at George Mason University in Fairfax, Virginia, who said the district will need to work more than they have in recent decades to reform their economy.
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“You don’t put all of your eggs in one basket," he said.
AlterNet reached out to DOGE for comment.
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