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CBO Says D.C. Statehood Would Cost $76 Million But ‘Hundreds of Millions’ Could be Saved

June 18, 2020 by Gaspard Le Dem
District of Columbia Mayor Muriel Bowser at the National League of Cities Conference in Washington. Feb. 9, 2020 (Photo by Dan McCue)

WASHINGTON — A new report by the Congressional Budget Office found that D.C. statehood would carry a price tag for taxpayers, but could also result in significant savings if the District takes on costs currently covered by the federal government.

Admitting the District of Columbia as the 51st U.S. state under House bill H.R. 5803 would cost roughly $76 million in federal dollars over the next decade, according to the CBO.

The CBO report says that the bulk of statehood costs would stem from adding two new U.S. senators and their staff members to the federal payroll. Senators receive an annual salary of $174,000 and roughly $4 million each year for staffing and other “representational duties” like travel.

Other expenses would include an estimated $2 million to create an 18-member Statehood Transition Commission that would advise Congress, the president, the D.C. Council, and the mayor on “an orderly transition to statehood” before being disbanded after two years. 

Commission members would not be salaried for their work, but would receive a per diem and reimbursement for their travel costs. They would be appointed by the president, leaders of the House and Senate, the mayor, and the D.C. council. The chief financial officer of the District of Columbia would also have a permanent seat on the team.

The only other expense mentioned in the CBO report would be to update the District’s flags and other materials to its new moniker, which would cost less than $500,000.

The estimated $76 million cost over 10 years is relatively insignificant compared to other federal expenses. For comparison, the U.S. Government Accountability Office estimated that four presidential trips to Mar-a-Lago cost taxpayers roughly $13.6 million in just three months.

Granting D.C. statehood could also save taxpayers “hundreds of millions of dollars a year” if the District takes responsibility for costs usually funded by the federal government, according to the CBO. “For fiscal year 2020, the Congress appropriated more than $700 million to provide the city with public defenders, courts, and education grants, in addition to mandatory pension costs of almost $500 million,” the report says. 

But the report noted there was “no basis” to determine whether those costs would be taken over by the new state under the statehood bill. “[W]hen that would happen is uncertain and would depend both on actions by the new state to fund those activities and on reductions in appropriated spending by the Congress.”

H.R. 5803 recently gained momentum in Congress after tensions flared between D.C. officials and President Trump over the deployment of federal troops to crack down on protesters in the District. The tensions came to a head when federal troops used tear gas and flash grenades to clear a peaceful demonstration outside the White House on June 1.

The incident drew criticism from Democrats and Republicans alike, and led to House leaders pushing the statehood bill forward. Majority Leader Steny Hoyer announced on Monday that the bill, introduced in 2019 by D.C.’s non voting delegate Rep. Eleanor Holmes Norton, would head to the House floor for a historic vote on June 26. 

“President Trump’s behavior in the District of Columbia in recent days, as well as his threats to impose his dangerous and callous will on a city about which he has proven again and again he has no understanding of, has underscored in dramatic terms the urgency of giving the District the same constitutional rights and authorities that the nation’s 50 states have had since 1789,” said Hoyer.

If passed, the bill would grant the District’s more than 700,000 residents equal representation in Congress, and would rename D.C. the state of Washington, Douglass Commonwealth.

With 224 co-sponsors, it is expected to pass the House, but will likely face major opposition from Republicans in the GOP-controlled Senate. Most Republicans in Congress are against D.C. statehood because it could shift the balance of power in the upper chamber by granting the heavily Democratic District two new senators.

Senate Majority Leader Mitch McConnell last year called the idea of D.C. statehood “full-bore socialism” in an interview on Fox News. “As long as I’m the majority leader of the Senate, none of that stuff is going anywhere,” he said.

The CBO report was ordered by Congress in February after the House Committee on Oversight and Reform approved the statehood bill for a full vote on the House floor. 

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