Trump budget cuts could push DC area into a recession, George Mason professor says

Proposed deep budget cuts from the Trump Administration and Republicans in Congress could push the D C area into a recession especially if those reductions are enacted Related stories Wall Street rises on hopes for bargain deals that could forestall a recession FBI director says bureau necessities more funding than what Trump administration budget proposal calls for US jobless benefit contends fall last week as labor region remains strong despite recession fears Terry Clower director of George Mason University s Center for Regional Analysis narrated WTOP the region is not in a recession yet but what happens in the next several months will determine how severe the economic downturn is and how long it will last The center Clower leads tracks economic activity in the D C region If the actions that have been taken so far by the Trump administration and DOGE are really implemented as they have been done it is undoubted that we will have a recession in the D C area Clower explained Already we have substantial office vacancy in the region even coming into all of this so and that has implication of class for tax revenues for locality so at a time when they may need to be offering higher levels of services to their constituents because of the economic disruption they re going to have less revenue to do it with Clower declared it s not just thousands of federal workers potentially losing their jobs but contractors and others that do business with the federal establishment as they face cutbacks Then you have the general business uncertainty associated with the tariffs and all the other things they are doing he noted It s a lot of things happening at one time In April D C s coveted triple-A bond rating was downgraded by Moody s to Aa In its record the rating agency cited the Trump administration s substantial cuts to the federal workforce and the city s declining commercial real estate field The downgrade makes it more expensive for the nation s capital to borrow money potentially costing taxpayers millions per year While unemployment remains relatively low several areas have seen unemployment tick upward Prince George s County Maryland saw its unemployment rate increase from in March compared with last March Maryland s statewide unemployment rate held steady in March at according to the Labor Department D C s unemployment rate increased to in March from in February Unemployment in Fairfax County Virginia increased to in March compared with in December Virginia s unemployment rate increased in March by one-tenth of a point to from in February However these latest figures do not reflect the modern budget cuts and federal job reductions Clower mentioned the area does have specific notable advantages It has a highly educated workforce and regional leaders are pushing to diversify the economic activity making it less reliant on establishment spending This region is going to have several really tough times in the next several months as these proposed cuts and likely agency relocations are put into place having commented that we have the basic infrastructure whether you think about telecommunications evidence centers and we have talented individuals living in this region that should allow us to compete he commented We should be able to effectively compete for the sectors the financial market that are going to grow over the next or years what we re going to have to do is maybe change the way we approach economic improvement to adapt from one that focuses on ruling body contractors who have to locate here because of being close to federal leadership to more private sector businesses that can locate anywhere in the country Source