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What Will Trump Budget do to Local Region?

As reported by Vox last week, "On Thursday, President Donald Trump released his outline for next year’s federal budget, titled “America First: A Budget Blueprint to Make America Great Again.” In it, he proposed major cuts to federal spending, with the Environmental Protection Agency, Department of State, and Department of Labor among those hardest hit. He also proposed spending increases on Department of Defense and other US military operations."

How would such federal budget cuts affect the local economy? A three-page research report from the Stephen Fuller Institute at George Mason University yesterday takes a look at the direct effect, which the Trump budget might have "on federal activity in the Washington region." Following is the report's executive summary:

"The net direct effect of the Trump budget, if implemented as proposed, would result in

  • a decrease of from 20,000 to 24,600 federal jobs, taking between $2.3 and $2.7 billion of federal salaries out of the economy,
  • a decrease of from $800 million to $1.2 billion in federal procurement spending, resulting in a loss of up to 12,000 private sector contractor jobs, and
  • a decrease of $1.1 billion in federal grants in the Washington region.

"Overall, federal spending in the region would decrease between $4.2 and $5.0 billion, the equivalent of reducing region’s Gross Regional Product growth rate by about one percentage point.

"These (estimates) assume that employment and procurement changes will occur proportionally to budget reductions by agency and are shown in the tables below based on the current location of the activity. However, it is likely that activity will shift, both within the region and the nation. Within the region, jobs may be consolidated into owned space, which is more concentrated in the District, or into longer-term, lower-cost leases. Similarly, jobs are likely to be consolidated into the main offices, largely located in the region, from other places in the US, unless there are directions to do otherwise."

The Stephen Fuller Institute's report goes on to discuss federal employment, federal wages and salaries, federal procurement. and federal grants in greater detail. Short tables are included to increase understandability. A .pdf version is also available.

Will Arlington County officials take these estimates into consideration as they formulate the FY 2018, and beyond, budgets? Let's certainly hope so.

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