With the stroke of a pen President Donald Trump erased potentially $882 million from the D.C.-area economy for 2019.
At least, that’s the estimated economic impact from Trump’s cancellation of 2.1 percent federal pay increases that were to kick in on Jan. 1 for approximately 364,300 federal employees in the region, according to economist Stephen Fuller, and head of the Stephen S. Fuller Institute at theSchar School of Policy and Government at George Mason University. Trump spelled out his decision to use his authority to cancel the planned pay raises, along with planned locality pay increases, saying it would save billions of dollars at a time of tight budgets.
“We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” Trump said in a letter to Congress issued Thursday. Just four days earlier, he tweeted that the U.S. economy is “booming.” Congress has the ability to override Trump’s decision on the pay raise by passing its own increase, but Congress has not overridden a president on this matter in years.
The bad news for Greater Washington? That $882 million is a big chunk of change, especially for a federal workforce that has seen the loss of 4,600 jobs this year — which itself means a loss of $700 million in local wages.
