Updated February 9, 2025
Voters Upset By Inflation, High Prices And Unaffordable Housing May Find Themselves Worse Off In 2025
The ‘Red Wave’ was voters’ message to American leaders that they’re fed up with the high cost of living in the U.S. last November. But the government they voted for is not likely to deliver the results they’d hoped for. Instead, the things at the top of voters’ lists–high prices, elevated interest rates, and unaffordable housing–are projected to worsen if a number of new policies are implemented.
Trump’s first term produced tax cuts for some, 2.67% economic growth after inflation* (pandemic excluded), the third biggest increase in U.S. debt of any president due to his tax cuts and the pandemic, and stock market highs. Mortgage interest rates dropped to all time lows as the Fed made drastic cuts in response to a sudden recession. It was a time when disease, death, and discontent spread across the nation.
Ater inheriting the strongest labor market in decades, Trump was America’s first president since Hoover to end his term with fewer jobs than existed when he entered. In fairness, the pandemic had a lot to do with that, though detractors counter that the Trump administration so mismanaged the pandemic, he bears responsibility.
Biden inherited a troubled economy with millions of households facing financial crisis due to ongoing job losses and soaring prices. Overall employment and average pay rose under Biden, and Covid-19 was brought under control, but the country experienced a significant post-pandemic surge of inflation that pushed prices up nearly 20%, and government was left to contend with 34T in debt, increased by recovery policies designed to address the economic fallout from the previous administration. Inflation is now lower than the average range (3.30), but inflation-related prices typically remain high unless consumer demand drops considerably, and that hasn’t happened so far in 2025.
Recent economic research found that spiking prices in 2021-2022 were the result of supply-chain disruptions and increased commodity prices, not high federal spending and costs from new regulations, as Trump recently claimed, though both did occur during the Biden administration. Despite his campaign promises to bring down prices and “end” inflation, Trump’s policies may well increase both. In addition, implementation of many policies outlined in Project 2025, whose co-author Trump named as White House Budget Director, may adversely affect the overall economy.
*Data from the Bureau of Economic Analysis
POLICY IMPACTS
Housing : A Primary Concern Nationally and Locally
Current U.S. Housing Market
The 2024 election coincided with a national housing market suffering from two years of rising mortgage interest rates, record-high home prices, and a rental market that approximately half of U.S. tenants say is unaffordable.
In Washington DC, home prices are are still climbing. Inventory is at a ten year high, but market conditions have deterred buyers and sellers alike.
U.S. Housing Market Forecast
Home buyers and sellers were counting on a long-awaited string of Fed benchmark rate cuts and economic market conditions that would lead to lower mortgage rates, making the real estate market tolerable again. Instead, the Fed is rethinking plans to incrementally lower the benchmark rate throughout 2025, expecting that the new administration’s policies will raise–not lower–inflation. That means borrowing costs will go up.
Trump made a campaign promise to bring mortgage interest rates down to 3%. But mortgage and bond markets indicate that Trump’s agenda would need to be drastically altered for the market to respond with a 3% rate, or he’d need to drive the country into a sharp economic downturn–something we’d like to avoid.
The Washington DC Market
The DC real estate market has slowed, but no major impact from the new administration’s policies has yet to be recorded. Many proposals are still in pre-implementation stages, and some require legislation that will take time.
The impact of DOGE actions against federal workers has definitely been felt, but it is too early to tell if they have created–or stalled–acticity in the District’s real estate market. January data will release in a few days.
YoY Inventory
DC inventory levels in January 2025 as compared to January 24 are over 29% higher, which suggests that early in the new year, sellers were breaking away from their locked-in rate mindset, and–possibly–that the upheaval in the federal workforce (back-to-office requirements, firings, hiring freeze, and other actions announced by the new administration) might be influencing moving decisions.
Months of Supply Inventory (MSI) for January 2024 was 4.3 months. On a national level, this would indicate a slight seller’s market based on metrics that use 6 months of inventory as a marker for balanced markets, but in Washington DC, where inventory is perpetually low, this level is considered quite high.
Average List Price, Volume and Medians
In the sense that increased averages of listing & sold prices and sold dollar volume typically indicate a thriving market, it is important to remember that January’s published totals reflect some unusually high-value December sales to incoming Trump admin members such as Howard Lutnick, who purchased Fox News Anchor Bret Baier’s property for $25M (WSJ). There were several similar high-dollar sales and combined, they skewed the indicators. For instance; the Sold Dollar Volume for homes sold in December (reported in January 2025) was $534,126,853.00, up 37.01% from the same period the previous year. Avg Sold Price in December was $966,688. while the Median Sold Price, taking out the skewimg, was $863,781 representing an increase of 4.58% YoY as opposed to 11.91% for the average total.
Pricing Trends
The median list price has remained relatively stable, with slight price increases over most home types. Sellers seem to be maintaining their pricing expectations despite increasing inventory.
Policies That Will Impact The DC Real Estate Market
While many economists take issue with a number of the President-elect’s policies, their main concerns are centered around tariffs, tax cuts, national debt and immigrant deportation, all of which could result in higher prices, increases in inflation and a more challenging national housing market.
In the nation’s capital, unique to the U.S. and heavily supported by government jobs, the real estate market will experience its own set of issues. Here are the policies most likely to have the greatest impact on the Washington DC housing market:
The Yield, The Fed And Interest Rates
The Fed’s December quarter-point benchmark rate reduction was expected, and already priced into the mortgage market. The big news followed Trump’s win: traders reduced the odds of another quarter-point cut in January, and the Fed indicated that its next steps are ‘under review.’ The Committee had previously planned to make at least four quarter-point rate cuts in 2025. That plan is now in doubt.
This has nothing to do with personalities, though the Trump and Powell have had their differences over rates (once Trump referred to Powerll as an “enemy” on X). Trump has made it clear he’d like input on rates, and Powell responded that the Fed should remain independent of political meddling. Trump hinted that he’d ‘let’ Powell finish out his term (which ends in May of 2026) especially if he liked the way things were going, but Powell says Trump can’t legally fire him and he won’t resign if asked to do so. There’s even a legal plan in place if Trump should try to force Powell out!
The Fed’s potential change of plan for rate reductions is a cautious response to the Trump administration’s policies, which point to higher inflation, increased national debt, and a slowing economy.
It’s important to note that presidents don’t control the benchmark rate, but the economic effect of their policies can indirectly influence it. Powell, along with many economists, seem to think Trump’s policies will take the U.S. economy in the wrong direction.
It is the 10-year Treasury yield that serves as a primary gauge of market expectations for future inflation. When investors foresee higher inflation, they require higher yields to offset the declining purchasing power of their returns.
Fixed mortgage rates typically follow the 10-year Treasury yield closely–historically with a spread of one to two percentage points–because 10-year treasury notes and mortgage-backed securities compete for the same investors. They have moved in tandem for more than 30 years, with variances only during recessions and other major market disruptions.
Housing Prices
The National Association of Realtors (NAR) historical data cites a 5% to 10% bump in sales for the DC housing market following a presidential election. But home prices and mortgage interest rates and January political drama have subdued the market. Whether or not there will be a rush of activity before year-end in response to politically-motivated actions and new legislation remains to be seen.
Washington DC median sold prices reached a 10 year high in June 2024 of $710,525 for all home types across all District locations. The high for Detached homes came in July 2024, with a median sold price of $1,342.50 (up 55.5% from July 2023). Attached townhomes saw their peak in January of 2021, with a median sold price of $802,500. across all DC locations. Condos and Co-ops reached a max median sold price of $490,000. in September of 2019 throughout the District.
These are numbers relate to the whole of the District, but along with home type, location is a key factor in Washington DC home prices. For instance, a 3 bedroom detached home in Logan Circle reached a top median sold price of $4,380,000. in April of 2017, while the median sold price of a 3 bedroom detached home in Brookland at that same time was $450,000.
Home prices in the District are sensitive to supply and demand, mortgage interest rates, and general economic conditions, as well as major political events.
Mortgage Interest Rates
If you’ve read our National Market update, you know that mortgage interest rates are influenced by a variety of factors. Proof of that came just after the Fed’s September half-point rate cut, when mortgage rates went up–not down. And again following election results when rates spiked as Treasury yields surged due to expectations that a Trump presidency will raise inflation. As inflation increases, the Fed will curtail its efforts to reduce the benchmark rate and mortgage interest rates will respond by remaining at or near current levels, or rise.
Mortgage rates did recede after the Fed’s quarter point November rate cut, but not because of it. Thursday saw a 10+ basis point rally in Treasuries and a half point gain in mortgage-backed securities (MBS) Mortgage News Daily, attributes to rates responding to election-related volatility that mobilized a massive and volatile amount of trading positions in the bond market and beyond.
The bonds that underly mortgage rates hit their best levels of the day half an hour before the Fed’s rate decision was announced. Those were also the best levels in several weeks, so mortgage rates responded by adjusting down to their lowest levels in several weeks, with the average lender just inching below 7.0% for the first time since October 25th. The avg. 30-year fixed rate Friday morning was 6.98%.
Another key component of Treasury prices and yields is federal debt. Wall Street has been adjusting their long-term expectations in this area since election results were announced. By extending his 2018 TCJA tax cuts for top earners and coporations, researchers at Oxford Economics forecast the federal budget deficit will increase by $3 trillion dollars between 2026 and 2033.
Going forward, the Fed Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. All of these factors are impacted by tariffs and other aspects of the new administration’s policies.
Economists at Nomura, the global financial services group that provides services to individuals, institutions, corporations, and governments in 30+ countries, raised their forecast for the terminal fed funds rate to 3.625% from 3.125%, attributing the decision to the economic impact of Trump’s policy proposals. Nomura analysts expect import duties to see a significant increase, from an average rate of 2.5-3% currently to 11-12% in 2026, raising the inflation rate to 3.1% in 2025. They, too, expect tariffs to lead to fewer Fed cuts and higher borrowing costs.
Industry experts expect rising yields to push mortgage rates up in coming weeks, and economists agree that Trump’s tax and tariff policies are likely to boost inflation and deter the Fed from reducing the benchmark rate as much as previously expected, possibly at all. In fact, some forecasters see the potential for rates to rise to 8%. As Housing Wire reports, while 8% mortgage rates are not likely this year because spreads have improved, if they worsen and hit 5% on the 10-year yield, 8% is in play.
The windup is that, nstead of the steady course towards incrementally reduced rates by the Fed during 2025, we now have a volitile ‘wait and see’ forecast for mortgage rates, which will respond to policies of the Trump administration. Buckle up.
DC Home Rule
On February 6, 2025, Senator Mike Lee (R-UT) and Rep. Andy Ogles (R-TN) introduced a bill to end DC home rule. ‘‘The Bowser Act,’’ as it is pettily named, is a brief, one page document simply states “Effective on the date that is 1 year after the date of enactment of this Act, the District of Columbia Home Rule Act (Public Law 93–198; 87 Stat. 774) is repealed.”
The last time Congress effectively repealed DC home rule was in 1995, when it established the District of Columbia Financial Control Board (officially the “District of Columbia Financial Responsibility and Management Assistance Authority”). This severely curtailed the authority of the elected DC government, including the mayor and city council, due to the city’s severe financial crisis. In the past, Congress has partially assumed control over aspects of DC governance, but this bill aims to fully repeal the District of Columbia Home Rule Act of 1973. That would mean fully eliminating the District’s government structures, including the positions of mayor and city council, effectively returning full governance of Washington, D.C., to Congress. It has never been done, perhaps because Congress has neither been equipped to manage the unique city, nor desirous of assuming that duty.
The District of Columbia Home Rule Act (1973) is a United States federal law that transferred specific congressional powers of the District to local government. It includes the District Charter (‘Home Rule Charter’), which provides for an elected mayor and D.C. Council. In 2023, the District employed 375,000, with a civilian labor force of 394,800 and a labor force participation rate of 71.1%, It has a larger population than two states, pays more federal taxes than 19 states, pays more federal taxes per capita than any state, and has a larger gross domestic product than 17 states. It’s 2024 budget is $19.8 billion.
DC has long been considered recession-proof due to its wealth of government and government-related jobs, and its solid blue political makeup has provided insulation from cultural conflicts between social groups who try to politically impose their own ideology on others. Those two things are likely to change during the next four years, and the impact will be felt in the real estate market as well as the job market. Politico reported that DC residents “could be looking at major economic dislocation, professional upheaval and the transformation of everything from city budgets to municipal abortion laws and even local public school curriculums — all as a result of the national election.”
Schools
Trump wants to shut down the Department of Education. The administration is considering severe cuts to programs and staff at the department, and an executive action eliminating programs not protected by law.
Project 2025’s mandate targets Washington DC’s education system specifically in the following ways:
- Expansion of ESAs and school vouchers
- Prohibition of “critical race theory”
- Prohibition of benefits based on race
The Heritage Foundation blueprint advocates for a national reduction in federal funding for students with disabilities and removing guardrails designed to ensure these children are adequately served by schools, privatizing the federal student loan portfolio, eliminating the Dept of Education and Head Start program, and for the expansion of ESAs and use of school vouchers.
Even if Trump ignores the Heritage playbook, his past actions indicate that he’s in agreement with many of its education recommendations. He says he will reverse President Biden’s Title IX regulation that expands the legal scope of sexual discrimination prohibition. Title IX applies the law to sexual orientation and gender identity. He has floated the idea of a $10,000. school voucher plan.
DC schools survived Trump’s first term after his plan to merge the Dept. of Labor and Dept. of Education and reduce the Education Dept. budget by as much as 13% withered for lack of effort and political support. His proposal for federal tax credit scholarships for school choice expansion suffered the same fate. But now, the political muscle and experience he needs to propell an education agenda forward exists.
School quality and proximity to preferred schools are key drivers of real estate values for DC family homes. Threats to public school funding, autonomy, cirriculum and programs, childrens’ safety and inclusion may be motivation for parents to consider moving outside the District, where local governments can serve as a buffer to interference.
Public school attemdance has dwindled in the District and a DCPS audit is currently underway by consulting firm Alvarez & Marsal to review its budget, spending, and staffing.
Despite enrollment decline, public schools are essential in Washington DC. Private school tuition is out of reach for many families. ESAs and school vouchers would not begin to cover the cost. Additionally, urban schools like those in DC have high concentrations of students from low-income families, and students who are English language learners. Private schools cherry-pick student populations via admissions, scholarship and discipline decisions. They often lack special education services.
Education Savings Accounts and school voucher programs have come under fire in recent years for their cost to taxpayers, misuse of funds, draining public school funding, harming rural districts, and disporportinately benefitting the wealthy.
Public schools are decimated by ESA and voucher programs diverting their funding, requiring staff and program cuts that ultimately cause rankings to fall and a decline in enrollment. School district leaders and politicians then cite those shrinking enrollment numbers and budget crises as cause to hire consultants who generate ‘utilization rates’ and recommend closing schools with the lowest rates. This is called “rightsizing.” This is often done without solid documentation that closure would save money. And studies show that mass layoffs are typically required to financially justify closures.
Over the past decade, DCPS has closed 15 public schools.
Washington DC’s private school tuition is significantly higher than the national average. Top-rated private schools can cost upwards of $50,000. per year, per student. Georgetown Day School’s published rates, for instance, are $44,400. per pre-K student, $48,100. for grades 1-4, $50,000. for grades 5-8 and $53,220. for grades 9-11. Other top private schools in the District charge similar fees. A $10,000. voucher would be almost insignificant.
It’s also important to note that all families don’t want their children indoctrinated with a religious education. Forty-four percent of DC’s private schools are religiously affiliated.
Also, all students are not accepted into private schools. The average acceptance rate in the District is 60% and minority enrollment is less than half.
Federal Workforce Reduction
In early 2025, Trump implemented several significant actions affecting the federal workforce, including:
1. Federal Hiring Freeze
2. Reinstatement of Schedule F
3. Dismantling of USAID
4. Mass Firings of Federal Officials
5. Elimination of Diversity, Equity, and Inclusion programs
6. Return-to-Office Mandate
7. Buyout Offers
Decimating the federal workforce would clearly affect the DC real estate market. Non-seasonal, full-time permanent (NSFTP) employees account for nearly 90% of its est. 400,000 DCMA positions, not including hundreds of thousands of area military service members and government contractors. A significant reduction would have a major economic impact on the District, which is still struggling from the after-effects of the pandemic, not to mention the government’s functionality.
In reinstating Schedule F, a measure Trump used during his first term, his goal is to strip civil service protections of as many as tens of thousands of career federal workers in policy-related positions, repositioning them as ‘at-will’ employees.
The Heritage Foundation and America First Policy Institute both endorsed the use of Schedule F with differing plans. America First’s plan was embraced by Trump when voters balked at a number of Heritage’s Project 2025 provisions. But the America First workforce plan is more severe than the Project 2025 plan, calling for conversion of the entire federal workforce into at-will employees and outlawing collective bargaining at federal agencies. Experts said this would be a very slow process frought with legal and procedural rockblocks, but the Trump administration and DOGE have essentially gone rogue, triggering multiple lawsuits and legal challenges.
Before Trump’s imauguration, DOGE head Elon Musk outlined plans in a WSJ op-ed to oversee a large scale reduction in the federal workforce, positions Musk said will be made obsolete when Trump eliminates “thousands of regulations.’
But in practice, Trump and DOGE didn’t wait for the elimination of regulations to start terminating or sidelining civil servants or pressuring and enticing them to quit.
Terminations
Almost immediately, Trump ‘terminated’ 17 independent Inspectors General, the nation’s watchdogs im a Friday night blitz, without adhering to Congressional notification requirements that stipulate 30 day notice a detailed reasoning for the firing.
“Trump’s Friday night coup to overthrow legally protected independent inspectors general is an attack on transparency and accountability, essential ingredients in our democratic form of government,” House Oversight and Government Reform Committee ranking member Gerald E. Connolly, D-Va., said in a statement. “Replacing independent inspectors general with political hacks will harm every American who relies on social security, veterans benefits and a fair hearing at IRS on refunds and audits.”
Trump has also targeted specific government officials:
- Trump’s newly-installed Acting Attorney General James McHenry fired several career lawyers involved in prosecuting Trump. The attorneys worked on special counsel Jack Smith’s investigation imto Trump’s handling of classified documents and his efforts to overturn the 2020 election that incited the Jan. 6 attack on the U.S. Capitol. Among those fired were career prosecutors Molly Gaston, J.P. Cooney, Anne McNamara and Mary Dohrmann.
- Emil Bove, the acting Deputy Attorney General and Trump’s former personal defense lawyer, ordered eight senior FBI officials to be removed from their positions just 24 hours after Kash Patel, Trump’s nominee for FBI director, promised there would be no retaliation for the bureau’s investigations of Trump and Jan. 6th rioters.
- “All FBI employees will be protected against political retribution,” Patel said under oath during his Senate confirmation hearing, even as the terminations were being executed.
- DOJ also demanded a list of all FBI employees involved in Capitol riot cases, who number in the thousands, and those involved in a case against a Hamas leader.
- Democratic Federal Elections Committee (FEC) chair Ellen Weintraub was fired and alleges the action was illegal. The FEC is an independent agency tasked with enforcing U.S. campaign finance laws and overseeing U.S. federal elections.
- Also terminated was Gwynne Wilcox, Board Member and first black woman to serve on the National Labor Relations Board. Firing a Labor Board member is unprecedented, and the agency now lacks three-member quorum to decide cases. Wilcox is suing the administration. Also fired was General Counsel Jennifer Abruzzo. No reason was provided.
- Two of the three commissioners of the Equal Opportunity Employment Commission were terminated. The EEOC is tasked with enforcing civil rights in the workplace. Commissioners Charlotte Burrows and Jocelyn Samuels said they were exploring options to challenge their dismissals, calling their removal before the expiration of their five-year terms an ‘unprecedented decision that undermines the agency’s independence,’ according to The Associated Press
- Trump fired Archivist of the United States Colleen J. Shogan, the official responsible for preserving and providing access to government records. Shogun was involved in the case regarding Trump’s mishandling of classified records that resulted in 40 felony charges
- 160 National Security Council employees were sent home.
- A large number of senior career diplomats who served in politically appointed leadership positions and in lower-level posts at the State Department left their jobs at the demand of the new administration
DOGE justifies the legality of firings by referencing the Supreme Court’s 2021 Collins v. Yellen decision, saying it gives Trump the broad power to pursue “reductions in force” that don’t target specific employees. And that “a plethora of current federal regulations exceed the authority Congress has granted under the law” per recent Supreme Court decisions West Virginia v. Environmental Protection Agency (2022) and Loper Bright v. Raimondo (2024).
Buyouts
After publicly musing that revoking ‘work from home’ rules for government workers would cause many to simply quit, DOGE claimed that Trump would be able to use existing laws to incentivise targeted federal workers to take early retirement, or offer voluntary severance payments “to facilitate a graceful exit.”
Exits were all but ‘graceful.’
Trump began offering nearly all of 2M+ federal employees the ‘option’ to resign. The administration told workers they could lose their jobs if they did not accept the buyout, according to Reuters. Federal workers say they were told to brace for dramatic cuts.
The U.S. Office of Personnel Management (OPM) oversees the federal workforce and is controlled by the White House. It sent a Jan. 28 email to federal employees saying that workers who submitted their resignation by Feb. 6 will retain full pay and benefits through Sept. 30th without having to appear for work, except in undefined “rare cases.” Workers willing to submit so-called “deferred resignations” were instructed to send an email to an agency account with the word “Resign” in the subject line.
A federal judge temporarily paused the plan. A reported 60,000 have accepted the offer, which some legal experts and labor unions now say is illegal.
Tens of thousands of employees have already been fired, reassigned, designated to be laid off or accepted buyout offers. Tens of thousands more could be affected by the grant funds pause and other WH and DOGE actions.
Budget Cuts And DOGE
What They Said
DOGE stated plans to work with Trump’s transition team to “identify and hire a lean team of small-government crusaders” who they said would work with the White House Office of Management and Budget (OMB), install legal experts within federal agencies to review regulations, then generate a list of rules for Trump, “who can, by executive action, immediately pause the enforcement of those regulations and initiate the process for review and rescission.” This sounded like an unusual, but orderly and lawful endeavor.
What They Did
Musk hired a team of young engineers with no government experience or expertise in areas of evaluation, some with troubling pasts, bypassing background checks and security clearances, to forceably infiltrate sensitive government offices. They demanded access to computers, servers and data, amd locked out civil servants–all without even providing identification. We learned over a period of days, that there were seven team members: Akash Bobba, Edward Coristine, Luke Farritor, Gautier Cole Killian, Gavin Kliger, Ethan Shaotran, and Marko Elez, aged 19 to 25, all software engineers and one volunteer. Media reports indicated that some had previously made racist and white nationalist statements online. Elez, in particular, called himself ‘racist’ and also called for ‘normalizing Indian hate.’ Elez was granted administrative and “direct” access to “Treasury Department systems responsible for nearly all payments made by the US government by Scott Bessent, newly-appointed Secretary of the Treasury and former hedge fund manager with no government experience. Administrative access allows a user to make critical changes to a system and view sensitive information on taxpayers, companies and other entities. A Snopes report quoted three anonymous sources, some or all of whom reportedly said Elez had also visited the Bureau of Fiscal Services in Kansas City, which houses the Payment Automation Manager and the Secure Payment System. A more recent CNN report states that both Tom Krause and Elez visited the office that processes more than a billion payments totaling more than a $5T annually. Krause is the newly-appointed (post fiasco) financial assistant secretary of the Treasury Department, now the bureaucrat in charge of the government’s largest payment system The Washington Post reported.
Its previous administrator, David Lebryk, resigned after being strongarmed by Musk’s DOGE team. They demanded access to the payment system that distributes Americans’ tax returns, Social Security and Medicare benefits, disability payments and federal employees’ salaries. It has historically been off-limits to political appointees. Musk’s team refused to provide any form of identification, including their full names.
Two of Musk’s team members also visited the Kansas City federal office that operates the payment systems for the BFS, a request they made prior to Trump’s inauguration that was denied by career Treasury officials at the time. There is no disclosure available as to what they did there. WH Press Secretary Karoline Leavitt and Treasury Secretary Scott Bessent either ignorantly, or in a deliberate attempt to mislead, claimed Musk’s team had “read only” access to systems, which was later revealed to be “admin” access, and ‘super admin access’ for at least one member. Bessent referred to Musk’s team as “highly trained professionals,’ when none are ‘highly trained’ in government systems and operations, or expertise in government agencies, their functions, and programs. One is still in high school.
At least one of Musk’s team was tied to black hat sites, and most team members were connected with Musk’s businesses, creating a massive conflict of interest. They reportedly downloaded and uploaded highly sensitive and classified material, and made changes without legal authority or disclosure.
The infiltration of the Treasury Department and other federal agencies was not scheduled, respectful or orderly, and experts say is was/is probably illegal. Doors were blocked, preventing access by agency staff, lawmakers and watchdogs. Career civil servants were locked out of their computers and sent home. Some were verbally abused by young team members.
It will go down in history as the biggest and most egregious data breach in the U.S. National security was compromised and taxpayers’ personal information stolen and put in jeopardy. This prompted a public outcry and launched a series of protests and legal actions. The states of New York. A federal judge blocked Musk’s team from accessing Treasury servers, and ordered that any data taken was to be destroyed, however Trump’s DOJ has made no known attempt at recovery.
Government offices occupied by the team include the Department of Education, Department of Energy, Department of Commerce, Department of Veterans Affairs, Department of Health and Human Services, the Center for Disease Control, CFPB, the FBI and Pentagon. Others are being accessed daily. Until full disclosure is made, we can assume that the privacy and security of all government departments and agencies has been irreparably damaged.
Elon Musk (founder of Tesla), has no legislative experience and holds no elected office, nor was DOGE a legitimate government department or agency at the time of the breaches. Rather, it was, at the time, a volunteer civilian ‘advisory commssion’ without legal authority.
Because Washington DC’s jobs and economy are highly connected to the federal workforce, sidelining and terminating civil servants employed by these agencies will have far-reaching effects in the District, not only for residents who rely on the payments issued by these agencies, and for employment, but by extension for the real estate market.
Workforce And DOGE Related Legal Action
As of February 9th, the Trump administration and Department of Government Efficiency (DOGE) are facing multiple legal challenges from various states, civil servants, unions, and advocacy groups. Key actions include:
1. Multistate Coalition Lawsuit Against DOGE
Parties Involved: A coalition of 19 Democratic state attorneys general, led by New York Attorney General Letitia James.
Allegations: The lawsuit contends that DOGE’s access to sensitive taxpayer data without proper authorization violates privacy rights and oversteps legal boundaries.
Current Status: U.S. District Judge Paul Engelmayer issued a temporary order blocking DOGE from accessing the Treasury Department’s payment system without appropriate background checks and security clearances. [ag.ny.gov]
2. Federal Workers’ Unions Lawsuit
Parties Involved: Federal workers’ unions, including the American Federation of Government Employees (AFGE), Public Citizen, and the State Democracy Defenders Fund.
Allegations: The unions argue that DOGE’s actions, particularly accessing confidential data, violate the Federal Advisory Committee Act (FACA) by lacking balanced membership and viewpoints.
Current Status: The lawsuit seeks to halt DOGE’s activities deemed unconstitutional and illegal. [afge.orrg]
3. AFGE and Allies’ Lawsuits Against Trump Administration
Parties Involved: AFGE, Public Citizen, and SDDF.
Allegations: Multiple lawsuits have been filed, including challenges to the politicization of the civil service through Schedule F and unauthorized data sharing with DOGE.
Current Status: These lawsuits are in various stages of litigation, aiming to protect federal employees’ rights and uphold governmental integrity. [afge.org]
4. Additional Legal Challenges
Overview: A legal tracker by ‘Just Security’ has registered 37 lawsuits against the administration thus far, addressing issues ranging from immigration policies to federal workforce restructuring. [jsutsecurity.org]
Plaintiffs seek judicial intervention to uphold constitutional rights and governmental checks and balances.
Tariffs
Trump began his term in 2025 by taking significant actions with tariffs by imposing additional taxes on imports from Canada, Mexico, and China:
- A 25% tariff was placed on imports from Canada and Mexico, with a reduced 10% tariff on Canadian energy resources
- Imports from China were subjected to a 10% tariff
Following discussions, the tariffs on Canada and Mexico were suspended for one month. China announced retaliatory tariffs of 10% and 15% on select U.S. natural resources and machinery, to become effective February 10, 2025.
On Sunday, November 9th, Trump said he will announce in 24 hours that the United States will impose 25% tariffs on all steel and aluminum imports, including from Canada and Mexico, and announce additional import duties later in the week, according to The Associated Press.
“Any steel coming into the United States is going to have a 25% tariff,” he told reporters Sunday on Air Force One as he flew from Florida to New Orleans to attend the Super Bowl. When asked about aluminum, he responded, “aluminum, too” will be subject to the trade penalties.
Trump also reaffirmed that he would announce “reciprocal tariffs,” imposing import duties on products in cases where another country has levied duties on U.S. goods. Countries threatened with tariffs have pledged to retaliate.
Trump’s plan to bring industrial production back to the U.S. relies on tariffs, deregulation, and lower corporate tax rates. He pledged to impose a universal 10% tariff on imports, a 60% tariff on goods from China, and raise prices on foreign-made goods.
Trump chose billionaire investor and Wall Street CEO Howard Lutnick as his Commerce Secretary, saying that Lutnick would “lead our Tariff and Trade agenda, with additional direct responsibility for the Office of the United States Trade Representative.”
Lutnick will be responsible for enforcing the sweeping tariffs that Trump campaigned on, and he seems eager for the job since he has made many strong public statements in support of them.
Most economists say these tariffs will cause American consumers to pay more for everything from foods to automobiles.
We’ve seen this before. In 2018, Trump imposed nearly $80 billion in new taxes on Americans by levying tariffs on thousands of products valued at approximately $380 billion. He instituted tariffs of 30% to 50% on all Chinese goods. The outcome was predictable. China retaliated with an additional 25% tariff on 106 American products, including vehicles, airplanes, soybeans (a top U.S. import), aluminum and pork.
The National Bureau of Economic Research published a paper on the statistical evidence of the impacts of Trump’s trade war on the American economy. They estimated that consumers and importers suffered a $3 billion loss every month due to added tax costs, plus an additional $1.4 billion in “deadweight losses,” (reduced income caused by purchasing imports that increased in price during the trade war). They said;
“We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers, with no impact on the prices received by foreign exporters.”
We’re still suffering from higher prices on many of those goods—costing American households an additional $831. annually according to federal calculations, despite wholesalers, retailers and distributors absorbing a portion of the cost and skirting tariffs by shifting their sources to non-tariff countries. With new tariffs applied to all countries and imported goods, consumers would pay upwards of $2,600. more annually for products consumed by the typical middle-income US household, according to the Peterson Institute for International Economics.
Studies found that the 2018 tariffs reduced real income in the U.S. and adversely affected U.S. GDP. The international trade deficit Trump promised to shrink actually increased. In 2020 the deficit skyrocketed 36.3% from 2016. If imposed, Trump’s proposed tariff increases would hike taxes by another $524 billion annually and shrink GDP by at least 0.8%, the capital stock by 0.7%, and employment by 684,000 full-time equivalent jobs acc. to The Tax Foundation. These estimates don’t even factor in retaliatory tariffs by other countries that would reduced exports, or additional blowback from a global trade war.
Didn’t Trump claim that the countries he’s slapping with tariffs would shoulder the cost? He did, but that’s not how tariffs work. They’re are a domestic tax on imported goods like food, clothes, shoes, electronics, toys, cars and car parts, appliances, construction materials like steel, etc. Tariffs are paid to the U.S. Treasury Dept. by the American companies who import goods, not by the foreign producers of the products, or the countries they come from. And the importers will pass the cost along to consumers in the form of higher prices.
Tariffs are Trump’s preferred method to force industrial production back to America. Both Republicans and Democrats agree on that goal as a positive one, and a number of efforts have been instituted to spur it, including financing domestic manufacturing, expanding access to capital for small manufacturers and maintaining technological leadership.
Tariffs have been a tool utilized by the Biden administration, which retained most Trump tariffs, and added an additional $18 billion for Chinese goods in May of this year, amounting to an additional tax increase of $3.6 billion.
It’s estimated that the Trump-Biden tariffs will reduce long-run GDP by 0.2%, the capital stock by 0.1%, and employment by 142,000 full-time equivalent jobs. The Trump-Biden tariffs have directly increased tax collections on U.S. households and reduced consumer choice. These effects are part of what voters were railing against when they went to the polls this November.
The Economic Policy Institute, (left-leaning think tank), has claimed that free trade created a large, decades-long U.S. trade deficit that resulted in factory closings and lost the country millions of manufacturing jobs and wage for workers without college degrees, eliminating an important driver of economic growth. But the CATO Institute, (libertarian/right-leaning think tank) disagreed, saying that free trade is not a significant contributor to American deindustrialization, that low-skill and superfluous manufacturing jobs tend to be replaced by higher-paying, higher-skill manufacturing jobs in sectors where the U.S. has a competitive advantage, and that increased productivity and factory automation were more significant in deindustrialization than free trade.
TCJA Extension | Expansion And New Exemptions
Are the disruptive actions taken by DOGE and the Trump administration, particularly the February 2025 Treasury data breach, related to funding TCJA? Is Trump ‘robbing Peter to pay Paul?’
Likely, in part. True, he needs to find a way to pay for the massive cost of TCJA renewal and expansion. But though he is obviously executing the Project 2025 playbook, his personal grudges and biases against certain agencies and people also come into play in DOGE actions, along with his long-held belief that government is too big, wasteful, and legitimately in need of audit. Throw in the opportunism that is always a motivating factor in Trump’s actions; the ability to profit from anything and everything, and the convenience of having fewer watchdogs and critical legal eagles around to stop him, or hold him accountable.
TCJA analysis shows TCJA extension and expansion will reduce federal revenues significantly, even after allowing for the impact on economic growth. After-tax income distribution will be more unequal than it is now. If TCJA isn’t financed with concurrent spending cuts or tax increases, it will raise federal debt prohibitively and impose additional burdens on future generations. And even if it is financed with spending cuts or other tax increases, TCJA is likely to leave most households worse off than if it had not been enacted. (Source: Brookings)
TCJA reduces federal revenue, increases national debt, cuts to existing programs and the tax burden on middle and lower income brackets.
Revenue From TCJA 1.0
An April 2018 TCJA revenue collection projection by the Congressional Budget Office (CBO) totaled $27.0T through 2024, with TCJA responsible for about $1.4T of net revenue loss (accounting for dynamic effects) from the previous projection. Data shows actual revenue totaled $28.5T, $1.5T above the CBO’s 2018 projections. Does that mean TCJA largely or fully paid for itself? Well, not exactly.
Two-thirds of the difference is erased when adjusted for inflation. While CBO projected roughly 16% cumulative inflation in 2018-2024, prices actually rose much higher–by 25%. So adjusted for inflation, actual revenue closely matched CBO’s 2018 forecast with one outlier year (2022). That pours cold water on claims that higher economic growth from the TCJA led to a sustained increase in revenue collection.
About that 2022 outlier: Adjusting for inflation, total revenue collection through 2024 was roughly $480B above projections, but more than the entirety of the increase, on net, resulted from a temporary revenue spike due to Covid-19 response and recovery that was no longer a factor in 2023. CBO found that “other ebbs and flows in revenue, relative to projections, were modest, offsetting, and actually led real revenue collection to be slightly below projected levels.”
2025 Projections
In 2025, if new exemptions are added for worker overtime, tips, and Social Security (certainly part of the plan that appeals to many), the national debt could spike by more than $7T dollars over the next ten years. The Wharton project estimates the plan would increase the nation’s primary deficits by $5.8T during that period on a conventional basis and by $4.1T on a dynamic basis. We already have a serious deficit problem.
High national debt can slow economic growth, reducing business investment, raising interest rates, limiting private investment and hampering the government’s ability to respond to future economic downturns, potentially leading to decreased confidence in the currency and increased inflation expectations.
Trump’s Overtime Tax Proposal
This component has limited value since he intends to repeal the DOL’s 2024 overtime rule expanding overtime pay eligibility to salaried workers earning less than $58,656 a year, cutting out an estimated 4M workers currently eligible for time-and-a-half pay when they work more than 40 hours a week. During Trump’s first term, his DOL reduced the number of workers eligible for overtime pay by millions.
Immigrant Deportations
Deportation of what U.S. Homeland Security Dept. estimates as 11 million undocumented immigrants would constrict the labor supply and hurt labor-dependent industries such as construction and agriculture. This drives up the price of all construction, including new homes, home remodeling and renovation by increasing costs and limiting supply, exerting upward pressure on prices for both new and existing homes.
VP-elect JD Vance claimed during a pre-election debate that housing is unaffordable because millions of illegal immigrants are competing with U.S. citizens for it: “Twenty-five million illegal aliens competing with Americans for scarce homes is one of the most significant drivers of home prices in the country.” But data shows the number of illegal immigrants in the U.S. is closer to 1 million. Any increase in population results in higher housing demand, but significant increases in home prices and rents are largely due to corporate investment and increased demand driven by low interest rates following the housing crash of 2008 that triggered The Great Recession, caused by the subprime mortgage market fueled by greed and the lack of the very consumer protection regulations the Trump Administration now seeks to end.
As the CATO Institute reports, “Immigrants also induce a housing supply effect because 10% of all foreign-born workers labor in the construction industry, which rises to 14.9% for noncitizens, according to the 2023 American Community Survey. Only 6.2% of native-born Americans work in construction. Estimates show that about 30% of all construction workers are immigrants, with higher rates in California, Texas, Florida, New York, New Jersey, and Nevada. Deporting those workers or halting more immigrants will reduce the growth in the housing supply.”
Project 2025 And ‘America First’ Influences
Like all Americans, District residents’ freedoms, finances and lifestyles will be impacted by the Trump administration’s policies, driven by his ideaologies, Project 2025 and the America First Policy Institute (AFPI). He has a skilled and effective Chief of Staff in Susie Wiles and the experience of a previous term under his belt. For those who didn’t vote for him, that is more frightening than reassuring.
Administration Members Affiliated With Project 2025
- Stephen Miller, who founded AFPI, was appointed as White House deputy chief of staff for policy and United States homeland security advisor. He is remembered as the architect of Trump’s disasterous first term immigration plan. Miller was an advisor for Project 2025 and contributor/video).
- Along with Miller, and Russell Vought (co-architect), numerous authors and contributors of Project 2025 Mandate for Leadership are serving in the new Trump administration, including:
- Paul Dans (author), is serving as Director of the Office of Personnel Management (OPM), overseeing federal workforce policies;
- Roger Severino (contributor), Severino is serving as Director of the Domestic Policy Council, influencing domestic policy initiatives;
- Andrew Bremberg (author), U.S. Ambassador to the United Nations;
- Brooke Rollins (contributor), Director of the National Economic Council, advising on economic policy;
- Chad Wolf (contributor), Secretary of the Department of Homeland Security;
- Peter Navarro (author, January 6 defender convicted of two counts of criminal contempt of Congress), Senior Counselor for Trade and Manufacturing;
- Brendan Carr (author) FCC Chair;
- Pete Hoekstra (contributor) Ambassador to Canada;
- Tom Homan (contributor, fmr Acting Director ICE, key to family separation policy) “Border Czar”;
- Karoline Leavitt (contributor/video, fmr asst. press sec. & 2024 campaign secretary) White House Press Secretary
- J.D. Vance (connected) Vice President of the United States
Reference
Trump’s First Term Stats
- The economy lost over 2.7 million jobs
- The unemployment rate rose to 6.4%
- After-tax corporate profits went up
- The stock market set new records. The S&P 500 index rose 67.8%
- The international trade deficit Trump promised to reduce went up instead
- The U.S. trade deficit in goods and services in 2020 was the highest since 2008 and increased 36.3% from 2016
- The federal debt held by the public ballooned from $14.4 trillion to $21.6 trillion
- The number of Americans without health insurance rose by 3 million
- Home prices rose 27.5%
- Paycheck growth outpaced inflation. Average weekly earnings for all workers were up 8.4% after inflation
- Homeownership increased by 2.1% to 65.8% due to low mortgage rates
- Illegal immigration increased. Apprehensions at the Southwest border rose 14.7% compared to 2016
- Coal production declined 26.5%, and coal-mining jobs dropped by 25%. Carbon emissions from energy consumption dropped 11.3% as a result
- Handgun production rose 12.5%, setting a new record
- Deadly crime increased. The murder rate rose to the highest level since 1997
- Trump filled one-third of the Supreme Court, nearly 30% of the appellate court seats and a quarter of District Court seats
- Trump’s “A Team” turnover rate was an unprecedented 92% as of January 20, 2021
- Trump’s total Cabinet turnoover rate was 14, compared to W Bush’s 2, Obama’s 3, Clinton’s 4, HW Bush’s 8 and Reagan’s 6.
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