Greater Washington enters 1985 in a mood of more uncertainty than at any time in the past decade. After two years of economic recovery from the recession of 1982, the region is faced with the possibility of a record federal deficit, a president and Congress deadlocked over the federal budget, further major cuts in domestic programs, shredding of the "safety net," and a new recession in the second half of 1985.
Juxtaposed against this bleak scenario is the strong performance of this region's economy in 1984, with an expansion of the area's economic base, the rebounding of the housing market, a reduction in unemployment and a relatively low rate of inflation.
Which of these courses will dominate the months ahead? The momentum that has characterized most of 1984 is still with us. Unemployment is running at a rate of 4.1 percent, compared to 4.7 a year ago. Suburban growth, both residential and business, is unabated. The District's office glut is shrinking as tenants move into space that has been vacant for a year or more. New business firms, including representatives of the "Fortune 500," are dotting the suburban landscape. Although the federal work force has shrunk since 1980 from 365,000 to 352,000, private-sector jobs have increased from 1,021,000 to 1,124,000, and will continue to increase. In part, this is because of the continued attractiveness of our metropolitan area to high-tech firms and in part to the service establishments that have sprung up throughout the region to serve our population.
A major factor in the region's recent development is the extension of the Metrorail system, which a few weeks ago opened to Shady Grove in the I-270 "Biotech Alley," and which will be extended in the near future on the Virginia side of the river to Vienna. A recent study by the Council of Governments indicated that development in the vicinity of Metrorail stations has moved along rapidly, and the number of major developments on the drawing boards, both in the suburbs and in the District, suggests that this trend will continue.
All of this is a bonanza for the area's local governments, since it will substantially increase their tax bases. But they are likely to pay a price for it, in lower federal and state aid. National policies have not fulfilled the hopes of the states, cities and counties. Federal programs on which they had come to count have been terminated or reduced, and the planned federal focus on building the resources of state governments as an alternative has not materialized.
As a result, Richmond and Annapolis find themselves under increasing pressure to finance programs they cannot afford; and many local needs are going unmet, with programs deferred or financed on a catch-as-catch-can local basis. The region's so-called "infrastructure" -- its streets, roads, water lines and sewers -- is a casualty of this policy, at a cost to future taxpayers of hundreds of millions of dollars. So is construction of new and badly needed highway facilities, lack of which is leading to increased congestion and will ultimately affect living and working patterns in the region.
A bright spot of the past year for the region has been the celebration of a decade of home rule for the District. In that period, the District has made significant progress toward seizing its destiny and becoming a full partner in the governmental spectrum of the area. The result has been not only better governance for the region's central city, but a better and stronger metropolitan area.
New intergovernmental arrangements, arrived at only after tough negotiations and including the District and the region's major suburban governments, have produced one of the finest rapid rail systems in the country; a solution to our water supply problem; agreement on the expansion of our regional sewage treatment plant; a formula for the vexing problem of disposing of sewage sludge; a tentative plan for shifting the ownership of National and Dulles Airports from federal to state and local ownerships; and a cooperative local government commodity purchasing program.
Ten years ago, Washington was known as a depression-proof city in which the economy remained stable whether things were getting better or worse elsewhere. It was a one-industry city, and that industry thrived, whether in times of prosperity or depression.
Recent studies by the Council of Governments have documented the thesis that as the Washington area has grown, its economy has become more diversified, and it has become much more like other large American urban areas -- subject to the economic and fiscal winds that buffet other American cities and much less in control of its own destiny.
If that is true, the fates of the coming year will, for most of us, be far less in our own hands, and far more the consequences of international tides, the national economy and the battle of the budget as it unfolds within 1600 Pennsylvania Avenue and on Capitol Hill.