DC metro proposes budget cuts, layoffs due to lack of stimulus

Yahoo Finance’s Jessica Smith breaks down why the DC Metro is proposing budget cuts and potential layoffs for thousands of employees.

Video Transcript

ZACK GUZMAN: --want to get to Yahoo Finance's Jessica Smith who has the latest on that front. Jess.

JESSICA SMITH: Yeah, Zack, Majority Leader McConnell is still pushing his targeted relief bill, that roughly $300 billion proposal, but he says that he's seen hopeful signs in the past few days, and he thinks compromise is in reach if lawmakers agree and work on what they agree on and then put off the other more controversial issues until later.

But Democrats have not been onboard with that really targeted approach. Democratic leaders did say yesterday that they would start with that $908 billion proposal as a negotiating point, and that was a pretty big concession from the Democrats. So we'll see if that moves the needle at all in the coming days.

But we are hearing just another example of how desperate the need is in some situations for more stimulus. The DC public transit system, the Metro, is facing nearly half a billion dollar deficit for next year's budget, and the rail ridership is down 90% because of the pandemic. And in response, they're proposing massive cuts unless Congress steps in. Metro's proposing cutting 200-- or excuse me, 2,400 jobs in addition to the 1,400 that they are already seeking to eliminate this year. So that's nearly 4,000 jobs lost there. They're also planning to totally eliminate weekend rail service, close 19 rail stations, significantly reduce weekday rail service, and cut bus service down to 45% of prepandemic levels. So it would be pretty devastating to the DC region.

I talked to the general manager of Metro, and he told me he's never seen anything like this, and Congress has to help. He says this is not just a Washington, DC, problem but it's the same story you're hearing from transit systems across the country. Let's watch.

PAUL WIEDEFELD: When you look at some of the major metropolitan areas, they don't work without us is the reality. You know, they just-- they don't function. And not only that, but that's not-- I mean, people have chosen that type of environment because of all those things it does, right? I mean, in the Washington region, the Metro is part of our culture. It's what we-- you know, it's what we do. It's how we make financial decisions. You know, the economy, the land use, where people choose to live, all that's driven around these systems. And to think that that all of a sudden goes away after having been here, you know, almost 50 years for us and in some other commuters much longer is just unimaginable.

JESSICA SMITH: He did say some of the proposed cuts could be rolled back if Congress does do something, if they do pass more stimulus. But the situation right now is dire, and he has to have a balanced budget. And he just doesn't know what Congress may or may not do. Zack and Akiko.

AKIKO FUJITA: OK. Certainly still a lot of work to be done even if this sort of bridge of a stimulus bill is passed this time around, at least this month. Thanks so much for that, Jess.