A relatively simple way to address inequality would be moving federal-government operations to smaller cities around the country.
It’s not just economic inequality, but rising spatial inequality that is the defining issue of our time. The gap between have and have-not cities and regions is growing, and it contributes to our increasingly divided and dysfunctional politics.
It’s an admittedly hard problem to counter, as this pattern of economic clustering is a fundamental feature of today’s knowledge economy and winner-take-all geography. But that hasn’t stopped people from imagining a better way. Ross Douthat of the New York Times has argued, albeit somewhat cheekily, that it’s time to break up the liberal city by forcing elite universities and media companies to set up satellites in places like Buffalo and Flint. Steve Case, the AOL co-founder, famously advocated for the “rise of the rest” by bolstering innovative startup ecosystems outside of the established coastal centers.
Yet there may be a simpler way—one that is much easier to accomplish and portends a more immediate payoff. Move big chunks of the federal government out of Washington, D.C.
The federal government is massively concentrated in greater Washington. Despite its recent growth as a tech and media hub, D.C. remains dominated by the feds. 467,000 people are directly employed by the federal government in the D.C. metro area, claiming roughly 14 percent of the area’s jobs. And 800,000 of the metro’s 3.2 million workers—fully a quarter of the region’s workforce—are either federally funded or contracted. That’s not even counting ancillary industries like lobbying and media, or the army of service workers that keeps the region running.
Shifting large pieces of the federal government away from D.C. would benefit smaller, less costly, more economically distressed cities and metros across the country, generating employment and investment in these places, and potentially even help form new industrial clusters.
It would benefit Washington, D.C., too, by relieving pressure on its commercial and residential real estate markets and opening up space for new people and uses. No longer just a government town, metropolitan Washington has a half-trillion dollar economy, the fifth largest in America and equivalent in size to Sweden’s and Taiwan’s. Moving some government functions out would not harm its economy but allow it to grow stronger as a technology, knowledge, and media hub. Furthermore, it could be part of a badly needed shift of economic activity and political power from the highly centralized system we have today to a more devolved and decentralized system that empowers cities and metro areas.
It’s not as far-fetched as it sounds. Pundits on the right and left are warming to the idea. Douthat, on the right, advocates it as part of breaking up the liberal city and overcoming our political and cultural divide; Matt Yglesias, on the left, sees it as a way to spur economic development in struggling Rust Belt cities. It fits with the small-government agenda of conservative forces in Congress, some of whom already see it as a way to drain the proverbial swamp. It also fits with the political incentives of Congresspeople in both parties, who could win big political points back home by securing federal agencies for their districts.
Not everything should be moved out of D.C., of course. The White House and key strategic functions of the executive branch would stay. So would Congress and the Supreme Court. Key agencies that contribute to D.C.’s growth as a vibrant tech hub, like the National Institutes of Health in Bethesda, should probably stay too, as it makes little sense locally or nationally to break up a world-class tech cluster.
But lots and lots of other federal agencies can and should move. The National Weather Service could move its 5,000 or so D.C.-area employees to New Orleans or South Florida, places at risk from hurricanes, flooding, and climate change. The Department of Agriculture could move many of its D.C.-based operations to struggling areas in the farm belt. The U.S. Geological Survey could shift its operations out west, where earthquakes are most likely to hit. There are countless other examples.
After all, the Centers for Disease Control and Prevention are doing just fine in Atlanta. And some of the most popular federal agencies, like the National Park Service and the U.S. Postal Service, are those with a widely distributed presence around the country. In the past decade or so, the Department of Defense created a Defense Innovation Unit with offices in Silicon Valley and Boston to maintain deeper ties to these leading tech hubs. Moving key federal agencies out of Washington could act to stimulate the creation of new industry clusters in other parts of the country.
Local governments could be asked to make the case for the agencies they’d most like to host and which would best fit them. More than 200 cities bid for Amazon HQ2, but there will probably be only one winner. Dozens upon dozens of communities could be winners from federal decentralization.
Decentralizing the federal government wouldn’t just be good for our economy, it would be good for our politics. For one, it would bring federal agencies closer to people and communities across the country. People are less likely to view the federal government as out of touch if a key agency is enmeshed in their community and employs their friends and neighbors.
This could be even more potent if coupled with a broad movement to devolve power away from the federal government and hand it back to local governments and the people. As I have argued elsewhere, there is no one-size-fits-all answer or approach for America’s multitude of cities, suburbs, and rural areas. Local governments know best how to address their own opportunities and challenges.
Indeed, David Fontana, a law professor and constitutional scholar at George Washington University, argues that federal decentralization is actually a constitutional mandate. He notes that the founders sought to keep federal power distributed in line with our federalist system of governance. When the capital moved from Philadelphia to Washington, many key government functions were maintained outside of the capital city, such as the Attorney General’s office. Later, the federal court system and the Federal Reserve banks were distributed around the country to better serve diverse local communities.
While the concentration of the federal government in Washington made sense as the United States industrialized, sought to integrate a growing nation, and assumed its role as a global superpower, there is a long non-partisan tradition that has been fearful of the over-concentration of political power in D.C., and that has intermittently called for devolving power away from Washington.
Shifting significant pieces of the federal government out of D.C. today could help stimulate growth in other parts of the nation, free up space for other, more economically valuable activities in D.C. itself, and perhaps even help to overcome our deepening spatial inequality and ever-widening economic and political divides.