Is DC screwed economically because of Trump and the Republicans? Probably.

 I'd say yes.  Moving agencies and firing employees reduces the demand for office space and housing in DC proper.  The growth in the federal government after 9/11 definitely benefited the city in terms of residents, even though much of the business of cybersecurity is in the suburbs.

-- "High anxiety: What losing 100,000 federal jobs could mean for the local economy," Washington Business Journal

Although in his first term he was successful in doing this with only a couple agencies, even though it came with crippling those agencies in terms of talent unwilling to locate, especially the USDA's Economic Research Service moving to Kansas City, but also BLM to Grand Junction, Colorado.

Although this has been a problem for the last couple decades, as Republicans have been uninterested in investing in federal agencies, especially those located in DC proper.  Plus the Maryland and Virginia delegations constantly aiming to move agencies to their jurisdictions.

From the article:

But one of the potentially most destabilizing and long-term changes would be if the soon-to-be president follows through on his goal to reduce federal employment in this region — a bedrock of the local economy where roughly one in 11 people work directly for the federal government and many more work as contractors.

Some 370,000 people across D.C., suburban Maryland and Northern Virginia are federal employees. Federal civilian employment in D.C. alone is 162,144 as of December — more than any other U.S. territory or state, according to data from the Congressional Research Service. Roughly 27% of wage and salary income earned in D.C. is from federal work, said Erica Williams, executive director of the D.C. Fiscal Policy Institute.

...Trump and allies from his incoming administration have said they’d like to cut spending on federal employment. That includes relocating roughly 100,000 jobs out of the high-cost D.C. region to states with lower cost of living and possibly closing some agencies altogether, such as the Department of Education. Some of his inner circle such as those leading the Department of Government Efficiency are also looking into consolidating agencies that regulate banks, according to The Wall Street Journal.

,,, It’s likely there would be multiple layers of challenges to any attempt by Trump to drastically reduce the federal workforce in Washington or elsewhere. He would need congressional approval in order to shut down an agency. A vote that would have eliminated the Department of Education failed to garner the needed 60 votes to pass in the Senate in 2023.

Uncertainty won't help either.  People will decide not to take government jobs.  It will definitely reduce office demand regardless.  It's hard to say about the residential market.  Many 10,000s of jobs would have to be eliminated to make a difference, especially since housing demand remains greater than supply.  This will have long term negative impact on "talent attraction".

Don't forget the multiplier effect.  Each primary job generates additional support jobs.  I don't know what the multiplier effect is for "paper pushers" (information coordination) versus doing jobs.  For example one economist estimates for "innovation jobs," the multiplier effect is 5 ("The Multiplier Effect of Innovation Jobs," Sloan Management Review).

Diversifying DC's Economy.  For a long time and for obvious reasons DC has been focused on the federal government as its primary economic engine, along with the trade associations, law firms, lobbyists, and related groups that seek benefits, provide services, etc.

DC proper needs to continue to focus on diversifying its economy.  I've written before that the government functions in the city proper tend to be information coordination, not doing, which has less positive impact.  E.g., when Obamacare was created DC economic planners said well, we can do electronic health records as a cluster etc. (note that the big player in health care is the Center for Medicare and Medicaid Services which is based in Baltimore).  But health informatics isn't part of what HHS proper does.

Military.  In the past, I've mentioned how the area economy is divided into military related and not military related  ("The East-West Divide | DC area regional economic development: anchors and where they are placed matter + airports | But military spending matters the most," 2021).  NoVA has a stronger economy because it is more centered on the military..  The strong IT cluster is broader than the military, but is still heavily focused on it. 

Engineering/Higher education.  DC should work to leverage the higher education institutions in the city, especially around engineering ("Naturally occurring innovation districts | Technology districts and the tech sector,"), but they haven't really done it.  For example, comparably to how Bloomberg created the Cornell Tech initiative in NYC ("Cornell Tech’s economic impact on NYC to double by 2030," Cornell Chronicle, "Better leveraging higher education institutions in cities and counties: Greensboro; Spokane; Mesa; Phoenix; Montgomery County, Maryland; Washington, DC,"). From the Cornell article:

A new analysis finds that Cornell Tech, its alumni and its 115 startups achieved $768 million in total economic impact and supported 2,800 jobs in New York City in the 2023-24 fiscal year.

According to the report, from economic development firm HR&A Advisors, Cornell Tech is projected to generate $1.5 billion in annual economic impact while supporting 7,000 jobs by 2030, affirming its reputation as the most effective economic development project undertaken by city government in recent decades.

“New York City has been a consistent draw for ambitious and intelligent people from around the world,” said Greg Morrisett, the Jack and Rilla Neafsey Dean and Vice Provost of Cornell Tech. “Cornell Tech has created a novel academic and entrepreneurial environment that brings new tech talent to the city who go on to become industry leaders and builders who are driving our city’s workforce and technology industry.

Corporate headquarters recruitment.  Before covid I thought the city could compete for "back to the city" corporate headquarters, but those still seem to be focused in the DC area on the suburbs, e.g., Boeing or Hilton ("Could bringing premier regionally headquartered business enterprises to the Pennsylvania Avenue Corridor be key to its renewal and revitalization?").

Health education and biotechnology.  In the series about better leveraging health care east of the river, the second piece was repositioning St. Elizabeths campus as a center for biotechnology research and graduate health education ("Part Two: Creating a graduate health and biotechnology research initiative on the St. Elizabeths campus"), but learning more about what happened in Ann Arbor, after Pfizer closed its research center there, made me realize that it's a lot easier "to start from the ground up" when you already have products in the pipeline   ("How the closure of a Pfizer research center in Ann Arbor, Michigan led to the development of a more robust and independent biotech sector").  Children's Hospital got a portion of the Walter Reed campus to do this kind of research too, but I haven't heard much about it since.

Maglev as a way to rebrand the Central Business District.  I also argued that maglev to the central business district could be a way to strengthen the appeal of locating business in Washington, but the city government was oppositional (""DC, Transformational Projects Action Planning, and the Baltimore-Washington Maglev project"). 

In short, many opportunities but few taken.