The federal budget proposed by the Trump administration would cost the region up to 24,600 federal jobs and billions of dollars in lost salaries and procurement spending, according to a new analysis by economist Stephen Fuller.
The District would see the biggest federal job losses, according to Fuller, with 14,000 to 15,000 federal jobs lost. Suburban Maryland would be next, with 5,500 to 6,000 federal jobs lost. Northern Virginia would see the least impact, with 500 to 3,600 jobs lost.
Fuller estimates that overall federal spending in the region would drop between $4.2 billion and $5 billion, reducing the region’s gross domestic product growth rate by 1 percent point.
The budget proposal, scant on details, is just that — a proposal. It will be sliced and diced by Congress, so it’s anyone’s guess what fiscal 2018 spending will look like at this point. Still, the breadth of the White House proposal is historic and noteworthy.
Fuller estimates the Trump’s blueprint would take between $2.3 and $2.7 billion in federal salaries out of the local economy, cut procurement spending by $1.2 billion and cut grants in the region by $1.1 billion.
The cuts wouldn’t just hit the federal workforce either; they would also mean the loss of 12,000 private sector contractor jobs.
The administration’s proposed budget would cut nondefense spending by $54 billion and simultaneously increase Defense Department and security spending by the same amount. That increased spending, however, would be spread out across the country.
And while these new specifics help flesh out the impact of the proposed budget on the region, it falls largely in line with what economic and policy experts had to say about it — namely that it would not be good for Greater Washington.
The budget proposes big cuts and consolidations to agencies like the National Institutes of Health, while some agencies would see a boost, such as the General Services Administration.
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Copyright Washington Business Journal, reprinted with permission