logo
How Congress Could Force $1.1 Billion in Cuts on Washington, D.C.

How Congress Could Force $1.1 Billion in Cuts on Washington, D.C.

New York Times12-03-2025

As Senate Democrats debate the House bill passed on Tuesday that would fund the government through Sept. 30, one flashpoint will be the legislation's impact on Washington, D.C. While the measure slightly decreases federal spending overall, it forces a crippling cut of more than $1 billion from the remaining six months of the District of Columbia's budget.
The House measure comes at a time when President Trump has floated a federal takeover of D.C. and Republicans have tried to weigh in on local bills, curbing the city's independence. The current spending bill could force layoffs at schools, the Police Department and other critical city agencies, compounding the economic troubles triggered by the administration's federal work force cuts.
Local officials point out that the city collected the tax revenue necessary to cover its 2025 $21.2 billion operating budget, so the congressional measure, if passed, would simply stop Washington from spending money it already has on the priorities it has deemed necessary to keep the city safe and prosperous. Representative Eleanor Holmes Norton, a Democrat who represents the District of Columbia as a delegate, but has no vote in the House, referred to the omission as 'nothing less than fiscal sabotage of D.C.'
Mayor Muriel E. Bowser has tried to strike a balancing act, taking a diplomatic approach toward Mr. Trump and pledging to work with him on shared priorities. She said on Monday that the spending cut would 'work against a priority that President Trump and I share, and that is to make Washington, D.C., the best, most beautiful city in the world.'
Here's what to know about the proposed freeze on D.C.'s budget.
Why does Congress have say over Washington's budget?
Washington's ability to govern itself has been limited for a long time. Under a law that established 'home rule' in Washington more than 50 years ago, Congress maintains power over the city, including final approval over its laws and annual budget.
But Washington generates most of its own money: It gets about 75 percent of its funding through local revenue. Another 24 percent comes through federal grants, while less than 1 percent comes from direct federal funds.
'Most folks, unfortunately, in this country think the District of Columbia is funded by the federal government,' Phil Mendelson, the chairman of the D.C. Council, said at a news conference on Monday. 'We are not. It is true that we are included in an appropriations act — not that we want to be.'
Typically, D.C. officials create a spending plan for the city, which is then approved by Congress.
How would the cut work?
During this latest struggle to fund the federal government, House Republicans omitted routine language approving the D.C. budget and treated the city like a federal agency.
While agencies have not yet approved their fiscal 2025 budgets, D.C. in June approved a $21.2 billion budget for 2025, 7 percent higher than the previous year's. Officials curbed some spending and offset the overall increase in costs by imposing additional fees, including a public safety fee on hotel stays, and by raising some business taxes, such as the paid family leave tax.
Congress initially approved the budget, but the House bill now forces D.C. to spend in line with its 2024 budget of $19.8 billion, as all other federal agencies are being asked to do.
'We are not a federal agency,' Mayor Bowser said at a recent news conference. 'Our budget was balanced and approved. And if we go back to fiscal 2024 levels, we would be forced to reduce spending by $1.1 billion in only six months.'
District leaders say that the sudden spending reduction is wildly unfair because Washington raises most of its own money but does not have final say over how it is spent.
What will this mean for the city?
District leaders have warned that the effects of the freeze would be 'devastating' for the city, most likely leading to layoffs in public safety and public schools.
That is partly a matter of timing. The city needs to scramble, within a matter of days, to find the necessary savings between now and the end of the fiscal year on Sept. 30. But a lot of its budget is tied up in contracts, leases and Medicaid, and cutting that spending would take time.
So local officials have warned that the most immediate targets would instead be salaries for city workers, such as police officers and teachers.
The city was already facing another kind of economic crisis. The Trump administration has fired thousands of federal workers, which could cost Washington around $1 billion in lost revenue of a different kind over the next three years, according to the city's estimate.
D.C. has also been working on a plan to balance its budget over five years.
Why is this coming up now?
The bill that carves this slice from Washington's budget is not focused solely on the city. It is part of a broad federal spending bill that lawmakers hope will avert a government shutdown. The most recent interim spending bill, known as a 'continuing resolution,' expires this week.
The measure passed by the House on Tuesday, now pending before the Senate, would fund the government through Sept. 30. While the previous continuing resolution approved the budget for D.C., this one does not.
What happens next?
Washington's fate is now in the hands of Senate Democrats, whose support is necessary for the federal bill to pass. 'I'm looking at options to force a vote on this critical issue in order to enable D.C. to continue operating under its current budget,' Senator Chris Van Hollen, Democrat of Maryland, said in a statement.
After a two-hour closed-door luncheon on Wednesday, Democrats were divided on whether to support the House legislation. Many of them are reluctant to do so because it enables the Trump administration to cut federal spending without consulting Congress.
Some lawmakers said that they could not give Mr. Trump a blank check to continue reshaping the government. Others, though, were wary of forcing a government shutdown, which could prompt political and economic consequences that extend well beyond Washington.
Lawmakers have until the end of March 14, when the current federal spending measure expires, to avoid a government shutdown.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

UnitedHealth Seeks $1B Latin America Exit: Sources
UnitedHealth Seeks $1B Latin America Exit: Sources

Yahoo

time13 minutes ago

  • Yahoo

UnitedHealth Seeks $1B Latin America Exit: Sources

UnitedHealth Group Incorporated (NYSE:UNH) is one of the best Dow stocks to invest in. The company is considering several offers for its Latin American business, according to two insiders familiar with the situation, as it works to recover from a series of major setbacks, including the removal of its CEO and a reported criminal accounting investigation. The largest US health insurer has aimed to exit Latin America since 2022, but selling its Banmedica unit has become more urgent recently due to multiple challenges, one source said. A senior healthcare professional giving advice to a patient in a clinic. New CEO Steve Hemsley told shareholders last week that he is focused on regaining their confidence following a disappointing earnings report and a Wall Street Journal story about a criminal probe into alleged Medicare fraud. UnitedHealth Group Incorporated (NYSE:UNH) maintains it has not been notified by the Department of Justice and stands by its business integrity. UnitedHealth Group Incorporated (NYSE:UNH) has received four non-binding bids for Banmedica, which operates in Colombia and Chile, totaling around $1 billion, according to sources who requested anonymity due to the confidential nature of the negotiations. While we acknowledge the potential of UNH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure. None. Sign in to access your portfolio

Disney to Pay Comcast $438.7M for Full Hulu Ownership, Ending Valuation Dispute
Disney to Pay Comcast $438.7M for Full Hulu Ownership, Ending Valuation Dispute

Yahoo

time14 minutes ago

  • Yahoo

Disney to Pay Comcast $438.7M for Full Hulu Ownership, Ending Valuation Dispute

The Walt Disney Company (NYSE:DIS) is one of the best Dow stocks to invest in. The company has agreed to pay Comcast $438.7 million to buy out its remaining stake in the streaming service Hulu, ending a lengthy appraisal process. In 2023, The Walt Disney Company (NYSE:DIS) announced its plan to acquire Comcast's 33% share of Hulu, paying $8.6 billion based on a minimum value of $27.5 billion that the companies had agreed on in 2019. This move wasn't unexpected, as reports had indicated Disney's intention to gain full control of Hulu. The Walt Disney Company (NYSE:DIS) had originally acquired a two-thirds stake in Hulu through its purchase of Fox Corp.'s entertainment assets. After the initial payment, Disney and Comcast entered an appraisal process initially set to finish in 2024. The deal is expected to be finalized by July 24. Disney CEO Bob Iger made the following statement: 'We are pleased this is finally resolved. We have had a productive partnership with NBCUniversal, and we wish them the best of luck.' Meanwhile, The Walt Disney Company (NYSE:DIS) has started merging Hulu with its other streaming services, which are also bundled with ESPN+, its sports streaming platform. While we acknowledge the potential of DIS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure. None.

Mayor Bass, regional mayors call for end to ICE raids in Southern California: "Our communities are not battlegrounds"
Mayor Bass, regional mayors call for end to ICE raids in Southern California: "Our communities are not battlegrounds"

CBS News

time14 minutes ago

  • CBS News

Mayor Bass, regional mayors call for end to ICE raids in Southern California: "Our communities are not battlegrounds"

After days of violent and destructive protests in Los Angeles, fueled by an increase in immigration enforcement operations, Mayor Karen Bass and other regional mayors called for an end to Immigration and Customs Enforcement raids. At a news conference Wednesday morning, Bass said the unrest in a portion of Los Angeles started last Friday after immigration operations were carried out in several parts of Southern California. Bass told reporters that LA and surrounding cities were "peaceful" before the raids. Mayor Karen Bass called on the Trump administration to end the immigration enforcement operations taking place across the Southern California region. KCAL News She explained that the raids have caused fear in immigrant communities, and accused President Trump of worsening the situation when he ordered the deployment of National Guard and U.S. Marine troops. She called for an end to ICE raids and the federalization of troops. "When you start deploying federalized troops on the heels of these raids, it is a drastic and chaotic escalation and completely unnecessary," Bass said. Mr. Trump posted on his Truth Social platform, claiming that his decision to deploy troops to LA saved the city from burning to the ground. "The great people of Los Angeles are very lucky that I made the decision to go in and help!!!," he wrote. Her speech came a day after she implemented a curfew in a portion of downtown LA after five consecutive nights of demonstrations, which have escalated to clashes between protesters and law enforcement officers, as well as hundreds of arrests. Since the start of the protests, parts of downtown LA have been covered in graffiti, businesses have been looted and public property has been vandalized. TOPSHOT - A car burns as a demonstrator waves a Mexican national flag during a protest following federal immigration operations, in the Compton neighborhood of Los Angeles, California on June 7, 2025. RINGO CHIU/AFP via Getty Images During an interview Wednesday morning on CBS Los Angeles, Bass explained that the curfew will be extended until it is necessary to ensure public safety. The curfew currently runs for one square mile in the downtown area from the 5 Freeway to the 110 Freeway and from the 10 Freeway to where the 110 Freeway and 5 Freeway merge from 8 p.m. to 6 a.m. Bass has also taken to social media to share how the raids are affecting the city. In a post on X, she wrote, "Angelenos are trying to live their lives—going to work, caring for their families—while facing the constant threat of sudden immigration crackdowns." Other mayors from across Southern California joined Bass, calling for an end to the ICE raids. The Mayor of Huntington Park, Arturo Flores, a U.S. Marine Corps combat veteran, told reporters that the military neighborhoods. "The deployment of Marines on our U.S. soil is an alarming escalation that undermines the values of democracy," Flores said. "Our communities are not battle grounds." Flores said the ICE raids being carried out in his community and others across the region are a form of intimidation that traumatizes hardworking residents. He said fear-based tactics are being used to target immigrant communities. The Mayor of Paramount, Peggy Lemons, added that residents are choosing not to leave their homes or send their children to school out of fear that ICE will take them away. "For many in our city, this has been the most devastating time in recent memory," Lemons said. She said immigrants, who play such an important role in the makeup of the region, should not have to live in constant fear.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store