The fiscal distress Republicans are inflicting on residents of the nation's capital is unprecedented, and it will hit human services the hardest.
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Jacquelyn Martin/AP Photo
District of Columbia Mayor Muriel Bowser speaks during a news conference about the D.C. budget and the continuing resolution in Congress, March 17, 2025, in Washington.
In Washington, there's blame enough to go around for the city's sudden fiscal distress. Not just in the back rooms of the Capitol, where a fight club atmosphere has replaced open-minded deliberations. You can also find it in another raucous place further up Pennsylvania Avenue, where local officials unpack the federal decisions affecting ordinary Washingtonians.
This week's drama comes courtesy of the chair of the Council of the District of Columbia, who threatened to sue the mayor.
Mayor Muriel Bowser has missed April and May deadlines for the city's 2026 budget. Earlier this week in a letter to the mayor, the council chair, Phil Mendelson, called the lack of action "disrespectful to the council and the public," an eyebrow-raiser in one of the city's more tense political relationships. The feds, he added, "cannot be the excuse," and he asked to have the spending plan in ten days. On Wednesday, Bowser insisted that Capitol Hill is the problem, but she appears ready to comply.
This local rumble comes on the heels of the District's ongoing battle with Republican House members, who've been playing cynical fiscal games with Washington's budget. Exactly two months and one day have gone by with no resolution to the crisis created by a House decision in March to fund the city at fiscal 2024 levels rather than at 2025 budget levels (which had already been signed off on last year by Congress under two continuing resolutions). The latest maneuver forced the city to scramble to deal with the resulting $1 billion budget gap across its $21 billion operating and nearly $12 billion capital budgets.
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The Senate passed a "simple fix" to the House's bizarre legislative mind game that treats the District of Columbia not as an independent city but as a federal department whose own funds it can impound. House Speaker Mike Johnson claims he's working at fixing this, but it hasn't been a priority for him as he deals with his narrow and obstreperous Republican majority. Ultraconservative Republican House members say they won't vote on the Senate's bill unless the city genuflects by establishing tighter curbs on abortion and a ban on cannabis and noncitizen voting in local elections.
The House's denial of Washington's right to spend its own local tax revenues is tantamount to taking a club to home rule without officially repealing it. Not allowing the city to spend the tax revenues that it collects does not save the federal government any money. But it does force the city to make cuts. Bowser has ordered freezes on hiring, overtime, raises, and spending on supplies and a host of other services. She also used a 2009 law that allows the mayor to increase appropriations to cut the budget gap down to $410 million. The mayor has other fiscal tools at her disposal, including a $245 million contingency reserve fund and an option to use surplus revenues from the 2025 budget if available. The drama, however, may continue if the House finds new issues to tinker with.
In a Wednesday statement, Sens. Mark Warner and Tim Kaine (D-VA) and Chris Van Hollen and Angela Alsobrooks (D-MD) asked the House to pass the S.1077 -- District of Columbia Local Funds Act. They noted that the Senate had moved the bill to the lower chamber on a voice vote without amendments.
Not allowing the city to spend the tax revenues that it collects does not save the federal government any money. But it does force the city to make cuts.
Depriving Washington's mayor and city council of their legal budgetary powers in this majority-minority and overwhelmingly Democratic enclave is another sad commentary on current Republican federal governance.
Cuts to Medicaid and SNAP promise to plunge more Washingtonians into poverty and crises. One-third of the D.C. budget goes to social services: 1 in 3 people receive Medicaid or CHIP (Children's Health Insurance Program); another 1 in 5 rely on SNAP. Under pressure from moderate Republicans, particularly those members with significant numbers of Medicaid recipients in their districts, some of the deepest cuts were rejected in this week's House committee markups, but some made it through.
The city managed to escape the most damaging District-specific Medicaid cut. House negotiators preserved the District's 70 percent "enhanced FMAP" rate, whereby the federal government provides the bulk of the funding for a 70/30 split with the city -- a split arrived at by Congress almost three decades ago since the District has limited taxation authority.
Among the proposals that made it through House committees this week were a number that would wrap qualified Medicaid and SNAP recipients in the District and across the country in yards of red tape that would prevent them from accessing benefits or using them at all. Cost-sharing mandates like co-pays for people above the poverty line in states that expanded Medicaid may deter them from seeking care.
Work requirement mandates feature reporting systems that can be hard to decipher. Gig economy workers may encounter difficulties providing verification for the numbers of hours worked. Changes to recertification requirements would mandate that people reapply for benefits every six months instead of once a year, leading to situations where it's easy for people to miss eligibility windows.
Though these cuts won't generate enough savings to offset Trump's massive tax cuts to the rich, they're sufficient to hurt millions of Americans. "I will say Republicans are famously bad at math," says Anne Gunderson, a senior policy analyst at the DC Fiscal Policy Institute. These measures, she explains, aren't "going to net you hundreds of billions in dollars of savings, which, in turn, creates pressures on states and the District."
On the taxation front, a proposal designed to restrict the Medicaid provider tax, which the city collects from hospitals, nursing homes, and others to help pay for Medicaid, would prohibit any new provider taxes or increases in existing taxes.
"This is a big deal, particularly for the District, because it has very limited revenue sources," says Edwin Park, a research professor at Georgetown University's McCourt School of Public Policy. "In general, states use provider taxes, either increases or new taxes, to avert budget shortfalls when they arise, including during recessions, to finance Medicaid improvements whether it's an expansion, greater access to homemaking services, or to help for people with developmental disabilities."
But the Republicans' proposal, Park adds, "basically says you can't look to these taxes anymore for future needs. So, you're stuck where you are. The District is going to have significant financing problems moving forward, because this won't be in the toolbox anymore."
The District anticipates significant cuts to SNAP, the food benefits program. Having states and the District cover even a fraction of SNAP benefits currently paid by the federal government, as the Republican proposal now stipulates, would likely force hard choices. If the District has to pay for 10 percent (the Republicans' recommended cost shift to states and the District) of SNAP's nearly $320 million cost to the District in fiscal 2026, that would add up to the salaries of 369 teachers.
"We're in an emergency, and folks will go hungry. They will lose their health care," says Gunderson. "We're in a situation where we have to be concerned with how it looks -- we need to be taking care of our residents."
Americans scanning the headlines and concluding that problems involving Medicaid won't affect them fail to understand that health care costs spread their tentacles across the system. Hospitals and other facilities that provide uncompensated care to people who are no longer eligible for Medicaid pass those costs on to everyone else. Hospitals in the District and in the wider metro area, especially ones serving large numbers of Medicaid patients and losing federal research funding as well, will face financial pressures that may end up forcing service reductions and staff cuts.
With its reason for being -- the federal government -- now decimated and further undermined every day, Washingtonians may face new, harsh economic and social challenges in a once "recession proof" city. Merely wresting fiscal control back will be a long slog for the mayor and the city council. Its current congressional overseers are with fine that, keen as they are to watch the nation's capital crumble.