(NewsNation) — The Trump administration’s efforts to shrink the federal government are expected to have a huge impact on the nation’s capital, where federal workers make up a quarter of the workforce in Washington, D.C.
Since taking office, President Donald Trump and his administration have instituted a government hiring freeze, moved to sell federal office buildings, bought out the contracts of more than 30,000 federal workers and are conducting mass layoffs.
Federal workers are a critical part of the economy in Washington, where they shop, invest in the stock market and buy real estate, fueling the economy in the area, as well as in Virginia and Maryland.
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Leaders in the area are now fearing the worst. In Washington, they are projecting declines in consumer spending and housing demand, a drop in property values and $1.01 billion in city revenue lost by 2029.
Washington’s Chief Financial Officer Glen Lee told NewsNation that new estimates show a significant financial impact from the planned cuts.
“It’s the Congress and the president that decide federal policy, there’s no doubt about that,” he said. “But the range of issues that they’re evaluating right now are very large and could have a very large impact on the district. I’ve never seen in my career this amount of uncertainty around a revenue forecast as we have today.”
That uncertainty will impact how Washington Mayor Muriel Bowser makes her budget plan. It’s likely many businesses will be impacted, from retail to transportation.
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Real estate is another area that could take a hit. Real estate agent Kris Paolini told NewsNation he’s already seeing some sellers pull out of the market and that buyers are skittish as well.
“Uncertainty definitely causes people to rethink a big life purchase such as real estate, and as a result, we’ve noticed a lot of buyers are kind of putting their home search on hold,” he said.
Government layoffs aren’t unprecedented. Former President Bill Clinton cut the federal workforce by 300,000 — though he did that over the course of several years, not several weeks. The ripple effects of those cuts, though, could provide a roadmap for what might happen going forward.
