Mass layoffs have begun across the city’s largest employer, tipping economic forecasts for the Washington, D.C., region toward recession. Real estate agents are bracing for a housing slump. And the existence of the municipal government itself, which manages the day-to-day affairs of a city with more residents than some U.S. states have, is under direct threat.
The Trump administration’s upheaval of the Washington that the president sees as the citadel of the so-called deep state, necessarily also means upheaval of the real Washington, a sprawling metropolitan area of millions of people who go to work every day.
With more than 300,000 federal government employees, the capital city and the surrounding area have one of the most highly educated and well-compensated work forces in the country. The federal government’s essential role in the local economy has allowed the region to weather recessions better than much of the country. But times are changing.
“For the District of Columbia, the federal government has always been a reliable pillar of stability,” said Yesim Sayin, the executive director of the D.C. Policy Center, a research organization. “I don’t think that’s the case anymore.”
The Trump administration, along with Elon Musk and his initiative known as the Department of Government Efficiency, have taken a hammer to that pillar of stability. The president began with a Day 1 order revoking federal employees’ flexibility to work remotely, and the changes have only intensified since, with round after round of layoff announcements. Nationwide, 75,000 federal employees have already submitted resignations in response to an incentive offer, and Mr. Musk has announced plans that, if allowed to go through, would mean thousands more workers will lose their jobs.
Dan Binstock, a partner at Garrison, a Washington-based search firm for legal professionals, said his office had received perhaps 10 times as many résumés from federally employed lawyers as would be usual after a presidential transition. “The floodgates opened,” he said. The exodus has created a logjam in the private sector. “There’s a feeling of helplessness because there are just not enough positions or openings to absorb everybody.”
An economic slowdown across the metro region is virtually guaranteed in the near term, said Terry Clower, director of the Center for Regional Analysis at George Mason University, in Northern Virginia. Federal workers, and even many private businesses, will probably pull back on spending because of all the uncertainty. But whether this would take the economy from a slowdown into something worse depends largely on how the courts rule in the many lawsuits challenging the administration’s actions.
“If they get a significant portion done of what they say they’re going to do,” he said, “I don’t see any way around the notion that we could fall into a recession this year.”
State and local officials are bracing for rough waters. The Virginia House of Delegates has formed an emergency committee to respond to the Trump administration’s actions involving the federal work force, with the House speaker, Don Scott, declaring that the plans so far “raise serious concerns for Virginia’s economy and the ability to maintain essential services.”
In Maryland, Gov. Wes Moore, a Democrat, warned in his annual State of the State address on Feb. 5 of “the danger that new leadership in Washington might pose to our economy.” Despite a historic relationship between the capital and Maryland, which nearly surrounds it, Mr. Moore said it was time to break the state’s “distinct reliance on Washington.”
Municipal leaders in D.C. have so far been more muted. Mayor Muriel Bowser, a Democrat in her third term, traveled to Mar-a-Lago before the inauguration to talk with Mr. Trump, saying afterward that they “discussed areas for collaboration between local and federal government.”
Such diplomacy is strategic, as the mayor herself suggested, as long as the city is “vulnerable to the whims of the Congress, and the president,” Ms. Bowser said at a news conference on Thursday.
Washington residents have had some direct say over the management of their city since the passage of the D.C. Home Rule Act in 1973, which provided for the election of a mayor and a local lawmaking body, the District of Columbia Council. Congress, in which D.C. has no voting representative, retained the power to veto local legislation — as it did in 2023, blocking a rewrite of the city’s criminal code — and the White House nominates the city’s local judges and appoints the top prosecutor.
Politicians on the right have long enjoyed bashing Washington, which often serves as a punching bag for government in general, even though more than four-fifths of all federal employees live and work elsewhere. But their disdain for the city has rarely been so explicit.
Republican lawmakers have proposed a raft of legislation taking aim at D.C., including a bill named after the current mayor that would strip the city, which has more than 700,000 residents, of its already limited ability to govern itself.
On Wednesday, Mr. Trump, who has called D.C. a “filthy and crime-ridden embarrassment to our nation,” seemed to be thinking along those lines. “I think the federal government should take over the governance of D.C.,” he told reporters.
Mayor Bowser lamented the president’s remarks on Thursday. “It makes people in our community anxious, and it makes our policymakers anxious, our businesses anxious, and that’s just an unnecessary distraction,” she said.
If D.C. does hold on to self-government, Mr. Trump’s continuing crusade against symbolic Washington, and the collateral damage it will wreak locally, have made the city’s long-term vision for itself even more urgent.
Over the last decade, Washington has tried to reduce its dependence on its big local employer. Well before the pandemic, a growing share of downtown office space was sitting vacant. After Covid ushered in widespread telework, the deteriorating health of the city’s downtown became a pressing matter. The mayor pleaded with the Biden administration to either end telework for federal employees or put some of the unused federal buildings on the market. The city leadership’s long-term aims were clear: diversify the D.C. economy.
“We’re no longer only home to the federal government,” Nina Albert, the deputy mayor for planning and economic development, said in a recent interview. “We are also home to a broad spectrum of businesses, cultural institutions and emerging businesses, particularly in technology and other types of industries. So we are leaning into that even more.”
Mr. Trump’s order to end telework will bring some federal workers back downtown, and the administration’s plans to offload some of the government’s real estate holdings may result in new mixed-use neighborhoods in the city. A downturn in the real estate market might even help with housing affordability. But all of this would come at a steep cost.
“While we want people to come back to work, we’ve seen some of it, but we’ve also seen, seen a lot of job loss,” the mayor said on Thursday.
Asked how D.C. would endure the near-term economic uncertainty, Ms. Albert emphasized the city’s thriving tourism. She pointed out that in May and June, the city is scheduled to host WorldPride, an international celebration of L.G.B.T.Q. rights, which officials have estimated could attract 2 to 3 million people. The festival organizers announced a lineup of performers on Tuesday that includes Jennifer Lopez and Grimes, a singer-songwriter who is the mother of three of Mr. Musk’s children.
Even so, very little in the city lies beyond the shadow of its prominent new resident. On Feb. 6, Egale Canada, one of the country’s largest L.G.B.T.Q. rights groups, announced that because of concerns about Trump administration policies, the organization would not be attending WorldPride. Several days later, Booz Allen Hamilton, a leading contractor for the federal government and past supporter of pride events in D.C., announced that it was withdrawing its sponsorship for the festival.
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