DC Explained: An Eventful Year for San Diego’s Relationship with Washington

Alan Berube is senior vice president at the Policy & Innovation Center (PIC), a think tank and social impact incubator headquartered in San Diego. In this new monthly column, DC Explained, Berube will provide insights to help residents understand the fast-moving national economic and policy dynamics affecting San Diego County.

It was only last January that a shift in White House control upended politics and policy in America. To paraphrase my favorite 30 Rock meme, “Lemon, it’s year one.”

It’s easy to forget all that’s transpired over the past 11 months, and the sweeping impacts that new leadership in Washington has had on San Diego’s institutions and communities.

Here’s a month-by-month sampling of the myriad changes our region has navigated — and will continue to navigate — as its federal relationships evolve.

January: A Sudden Funding Freeze

No sooner had the Trump administration taken office than its budget office issued a memo freezing funding for a wide swath of federal programs. This sparked financial chaos for local governments, food banks, housing agencies, universities, and others in San Diego and nationwide that collectively administer upwards of $3 trillion in federal aid annually.

States (including California) and nonprofits filed suit, and the Trump administration rescinded the freeze, though disruptions continued to impact federal grant and loan recipients for weeks and months thereafter.

February: DOGE Takes Aim

Post-inauguration, the (briefly) Elon Musk-headed Department of Government Efficiency (DOGE) acted swiftly to cancel disfavored federal grants and programs, shutter agencies and shrink the size of the federal workforce.

DOGE carried out many of these actions under the banner of implementing executive orders that targeted diversity, equity, and inclusion efforts, and terminated actions to combat climate change. San Diego-based scientists, federal workers, and environmental justice organizations variously scrambled to adapt and fought back in the courts.

March: Universities Face Fiscal Fog

The Trump administration has sought to bring universities to heel by slashing funding, limiting student loan programs and erecting new barriers for international students and faculty.

One of its early efforts aimed to restrict federal support from the National Institutes of Health and other agencies for indirect expenses such as lab space, equipment, and utilities. UC San Diego projected that change alone would cost it $150 million, and imposed hiring freezes and delayed building plans in response. Over the summer, federal courts blocked the administration from implementing the measure.

April: Trade Policy Targeted

On April 2, the administration announced a sweeping set of tariffs on international trade, heralding “Liberation Day” (from what we were being liberated remains unclear). As one of the nation’s most trade-dependent regional economies, San Diego businesses and consumers braced for impact. However, most goods from our key trading partners Mexico and Canada remain exempt from tariffs, and the Port of San Diego recently reported importing more goods this year than last.

May: ICE Chills Communities

The new White House upended immigration policy from the get-go by suspending refugee and asylum programs, terminating protections for other groups fleeing persecution and natural disasters and seeking widespread deportations of unauthorized immigrants.

While many local communities felt these changes immediately, the new reality hit home for many San Diegans in late May when federal agents raided South Park restaurant Buona Forchetta and arrested several kitchen workers amid community protests. This laid bare the administration’s growing aim to deport any and all undocumented immigrants regardless of their criminal records.

June: The Big Beautiful/Ugly Bill Emerges

For most of June, Washington was engrossed in negotiations over H.R. 1, a massive $3.5 trillion tax-and-spending bill that narrowly passed Congress just ahead of July 4.

San Diego will see some upsides from the legislation, which cuts taxes for higher-income households, and boosts spending for maritime defense. At the same time, many San Diegans will confront serious challenges from the bill’s cuts to programs that promote health care access, nutrition, and clean energy, and from its several-fold funding increase for immigrant deportation operations.

July: School Funding Goes Missing

The U.S. Department of Education has been in President Trump’s crosshairs since the 2024 campaign, when he promised to abolish the agency and return its budget to the states.

Since taking office, the Trump administration has halved the department’s workforce, as part of a broader effort to wind down its operations. In July, the administration doubled down by withholding billions of dollars in grants to local school districts —including an estimated $50 million in San Diego County alone — to assist them in closing achievement gaps. Federal officials eventually released the frozen funds, but not before sparking local uproar and demonstrating their continued willingness to flout congressionally authorized spending plans.

August: Economic Warning Signs

Amid the policy turmoil, federal data released over the summer signaled a slowing labor market and rising prices. After more than four years of continuous monthly growth, U.S. employment ticked downward, while both the unemployment rate and the annual inflation rate began to rise.

These impacts were pronounced in San Diego, which registered its highest unemployment rate since 2021, as well as the highest rate of inflation of any region nationwide.

September: Redistricting Heats Up

In response to Texas’s extraordinary (and White House-encouraged) move to redraw Congressional maps mid-decade and secure additional Republican seats, Gov. Gavin Newsom and the state Assembly approved in late August what became Proposition 50, a ballot initiative to redraw California’s Congressional map to advantage Democrats. Soon thereafter, San Diego City Councilmember Marni von Wilpert and former Congressional candidate Ammar Campa-Najjar announced plans to challenge incumbent Republican Darrell Issa, whose redrawn North San Diego County district will be more favorable to Democrats next year following Proposition 50’s overwhelming approval in the November election.

October: Shutdown Tumult

With Congress failing to pass either an annual budget or stopgap funding bill by the end of September, the federal government entered a shutdown on Oct. 1, from which it did not emerge until mid-November. Local impacts included a galvanized “No Kings” protest, extensive flight delays due to understaffed air traffic control and the threat of CalFresh benefits being withheld from low-income households, before Senate Democrats dropped their demand to extend expiring health insurance subsidies and agreed to temporary spending through January.

November: New Hurdles to Combating Homelessness

The San Diego region has begun to make steady progress in preventing and alleviating homelessness, one of its toughest social challenges. That progress owes partly to success in implementing a “Housing First” strategy, which seeks to stabilize individuals’ housing situation before addressing other issues such as mental health, substance abuse and employment.

Preliminary federal guidance issued in November, however, could cut off tens of millions of critical homelessness service dollars to San Diego-area governments and nonprofits that use Housing First approaches, and threaten an already-stretched housing safety net.

December: Offshore Drilling Dispute

As California policymakers continue adapting to the rapid withdrawal of federal subsidies and regulations supporting clean energy, the U.S. Interior Department announced plans to open new leases for oil and gas drilling off the California coast for the first time in more than four decades. Local reaction to the proposal, which includes a lease site stretching from San Diego to San Luis Obispo, was swift, as county supervisors passed a resolution opposing any new drilling and urging coordination with state and federal officials. The fate of the proposal, as well as oil and gas companies’ interest in drilling despite local opposition, remain unclear.

What will 2026 bring? Politically, next November’s midterm elections could shift the balance of power on Capitol Hill, and California’s next governor will bring their own set of priorities and methods for managing the state’s complicated relationship with President Donald Trump. I’ll look at developments to watch for in the new year in my next D.C. Explained column. For now, here’s hoping the holidays bring San Diego-area leaders a quieter couple of weeks on the federal front.

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