ARI SHAPIRO, HOST:
President Trump's deep cuts to the federal government have had ripple effects here in Washington, D.C. The city's chief financial officer says the local economy has taken a hit, forcing local leaders into taking some drastic steps. WAMU's Alex Koma reports.
ALEX KOMA, BYLINE: After some difficult days in the wake of the pandemic, D.C. Mayor Muriel Bowser called 2024 the city's comeback year. The district's population was growing again, and crime numbers were falling. But Bowser says that was before anyone had ever heard of the Department of Government Efficiency.
MURIEL BOWSER: We got hit with the DOGE economy.
KOMA: Federal workers fueled the city's economy, traditionally insulating the district against economic downturns affecting the rest of the country. But the Trump administration's push to shrink the size of the government has upended that equilibrium, leaving many D.C. residents unable to spend the way they did, or worse, forcing them to flee the region entirely. The warnings from the city's chief financial officer are grim. D.C. stands to lose 40,000 jobs over the next four years, leading to roughly $1 billion in lost revenue. Bowser responded by proposing deep cuts in her new 2026 budget this week, primarily focusing on human services. The city's Medicaid, food stamp and paid family leave programs could all see substantial reductions, cuts which would fall hardest on the city's poorest residents. But Bowser is simultaneously pressing for some new investments meant to grow the economy- chief among them, a billion dollars to build a new football stadium for the Washington Commanders.
MURIEL BOWSER: The activity there and the private dollars that are being attracted to that site will continue to spur interest.
KOMA: Bowser has paired these proposals with nods towards deregulation, aiming to slash tenant protections and clean energy requirements to attract more development. And she hopes to abandon planned increases to D.C.'s tip minimum wage in a bid to help restaurant owners who say rising labor costs are hammering their businesses. D.C. Chamber of Commerce head Chinyere Hubbard argues that the city can't afford to wait to make changes like this now.
CHINYERE HUBBARD: We, from the business community perspective, really see a lot of upsides to make it easier to do business in D.C., to attract business in D.C.
KOMA: But all these cuts and policy changes have also attracted intense resistance. Elizabeth Falcon, the head of D.C. Jobs With Justice, says she can't understand why the city would respond to these federal disruptions by handing over public money to a billionaire football team owner and slashing supports for vulnerable people while so many are losing their jobs.
ELIZABETH FALCON: There's a really false dichotomy that's being raised here that requires, like, reducing the risks and benefits that D.C. has made in commitments to workers and tenants in order to ensure a thriving and functional private sector.
KOMA: These difficult choices will surely prompt contentious conversations with the D.C. Council, which will be able to make changes to Bowser's proposal over the next two months before they vote on it. At-large Councilmember Robert White argues the city risks pushing its poorest residents out of D.C. if it pulls back on these safety net programs so aggressively.
ROBERT WHITE: I don't want us to pretend like we don't know the potential impact if we don't make the right decisions now.
KOMA: Yesim Sayin has studied the city's economy for years as the head of the D.C. Policy Center. She believes there's some merit to Bowser's efforts here, but she also cautions that the size of the city's problems are so vast that more challenging cuts are likely in the future without more money coming in.
YESIM SAYIN: Maybe we have solved a structural budget problem by some ugly arithmetic, but it's going to lead to incredibly difficult decisions.
KOMA: Sayin notes that Bowser's budget also calls for substantial school spending cuts two years from now if the city's revenue picture doesn't improve. That could prompt some bruising political fights. For NPR News in Washington, D.C., I'm Alex Koma.
(SOUNDBITE OF POST MALONE SONG, "CHEMICAL") Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.