In Debt and Crisis

While the American presidential election roadshow rolls on, back in Washington, Mayor Marion Barry's troubled city is about to go bust. Rupert Cornwell reports

It is surely one of the most breathtaking approaches by air on earth. A banking turn over the Potomac river, then, if you are fortunate enough to be sitting on the left side of the aircraft, the bijou streets of Georgetown, the widening river, the Lincoln Memorial, the tiny White House half-hidden by the trees, the graceful, soaring Washington Monument, the Smithsonian buildings, the Capitol and its white dome floating in the air, and, finally, a few seconds later, the landing at National Airport. Welcome to Washington, DC, beautiful, battered and bankrupt.

Never has the contrast between the two Washingtons been starker: the throbbing, majestic city in which the last superpower does its business, and the demoralised encampment that surrounds it, known as the District of Columbia - racially polarised, politically atrophied and unarguably broke. The "last colony", it has been called, thanks to its subordinate status to Congress, prescribed by the Constitution. But as this apocalyptic winter of blizzards, biting cold and government shutdowns draws to an end, America's capital city is still in desperate need of relief.

The litany of recent Washington disasters is endless: the public schools that couldn't open for the new academic year because they were structurally dangerous; the snow ploughs that didn't work for want of spare parts; police cars thatfail to answer calls because the district could not pay the bills for petrol and new tyres. All this in a city a third of whose population is on welfare and whose poorer parts suffer from an infant mortality rate worse than most Third World countries. And that is to pass over the crime and violence which long since earned this other Washington its inglorious niche in the world's consciousness.

In fact, as in most large American cities, the murder rate here has declined of late. But it still averages around one a day, equivalent to a dozen people shot down daily on the streets of Greater London. At any given time, almost half of black DC males aged between 18 and 35 are in prison, on trial, on parole or being sought by the police.

And then there is Mayor Marion Barry, symbol, mirror and - not a few would say - architect of Washington's present misery. For white America beyond the District of Columbia, the moment when the capital lost its last shred of credibility came on 8 November 1994, when the man who only two years earlier had been behind bars for possession of crack cocaine was once again elected mayor.

Thirty years before, he had entered the Washington scene as a leader of the civil rights movement which then promised so much. Now he was back; no longer as a unifier but as a sinner forgiven by his own, champion of an oppressed black majority against the capital's white establishment - just in time to reap the consequences of his earlier mistakes.

Beyond doubt, Marion Barry is to blame for some of the city's ills. The bloated DC government payroll of 45,000 (as many as Chicago, a city six times larger) was his doing. The later years of his rule were scarred by mismanagement and corruption; he failed to turn Washington's great boom of the Eighties to lasting benefit. But even the most gifted administrator could not have halted the exodus from the city - not so much of affluent whites as of middle-class blacks in the eastern parts of Washington, many of them federal government employees who constituted its true backbone. Suburbanisation is the true story of America in the second half of the 20th century, and Washington is no different from every other old urban centre across the country.

From a peak of 800,000 in the mid-Fifties, the District of Columbia's population has fallen to 550,000 today, and the outward flow is only accelerating. Whole streets bristle with "For Sale" signs, property values are tumbling and the familiar vicious circle that has driven the crisis of American inner cities is working full force in Washington.

As the more affluent leave, the tax base shrinks. Those who are left are poorer, more dependent on welfare. To find the money, municipalities must either cut services or raise taxes - which only prompts more people to leave, reducing the tax base still further. Washington has reached the end of the line: it has a $4bn annual budget, much of it health and welfare benefits for its poorer citizens, and a projected budget deficit of $320m.

Special factors only exacerbate the problem. "Slash the federal government," parrot the politicians in this anti-government age. But in Washington, the government is the largest employer and cuts hit the local economy directly, as did the two recent government shutdowns brought about by the budget war between the White House and Congress. Nor can Washington copy New York and Philadelphia, which came close to bankruptcy in the Seventies and Eighties, by imposing a "commuter tax" on the million or more workers who travel from Maryland and Virginia to work each day in the city. It would be blocked by the Maryland and Virginia congressmen who dominate the committee that supervises the District of Columbia's affairs.

In truth, however, no one runs Washington. Power is split four ways - between a White House that runs the federal government and therefore Washington, a Congress that has veto power over the city's laws and budget, a financial control board set up last year to save the place from impending bankruptcy, and - last and most certainly least - its own elected representatives, Mayor Barry and the City Council. But even if someone did have authority, who would want the job?

In contemporary US politics, "Washington" is the dirtiest word in the language; woe betide the Republican presidential candidate who emits a drop of sympathy either for the federal government or for the people who live in a bankrupt, crime-infested, overwhelmingly Democratic city. The Republicans, of course, may well not win the White House in 1996. But they do control Congress. Thus transpired one of the more surreal political spectacles of recent years: the Speaker of the House, Newt Gingrich, with Mayor Barry alongside him, in a north-east Washington school hall one sweltering evening last summer, setting out his vision of turning the capital into a model for all the world. Behind the Gingrich gush, however, lay a nightmare - that this New Jerusalem would be a laboratory for the Republicans to test run the more controversial elements of their much trumpeted "Contract with America", from school vouchers to cuts in welfare and Medicaid, on which the city depends.

But, in true Washington fashion, nothing happened and the city's financial plight worsened. Its existing debt has been relegated to junk bond status, while any hope of raising fresh funds depends on a credible long-term plan to balance the budget. Congress, meanwhile, is still fighting over the district's 1996 budget, which it must approve before a regular federal payment of $247m can be paid to the city. Without it, that clothesless emperor Marion Barry warned last week: "We will literally run out of cash by the end of March." If so, the capital of the mightiest country on earth will go into formal receivership. Which perhaps is exactly what should happen.

Amid the confusion, one thing is now clear - that for Washington half solutions can no longer suffice, that the present muddle ensures the worst of all worlds. Short of moving the capital to Kansas City, the city will not vanish. So what to do? Statehood, whereby Washington would have a governor, two senators and a congressman, is plainly out of the question. In November 1993, the last time Congress turned down the idea, the notion at least fired the imagination. The figure 51 (denoting the 51st state) could be seen on posters and daubed on walls; even a name was ready and waiting, New Columbia. Today, even the most ardent advocates of full home rule are silent, broken by the city's decay.

Three choices then are left. One is a complete takeover of the city by Congress - which would settle Washington's financial difficulties but still leave its inhabitants without proper voting rights. Others propose turning the District of Columbia into an economic "free zone", without federal taxes, in the hope of drawing businesses and residents back to the city. Most promising is the third solution, that Washington be returned to the neighbouring state of Maryland, from which it was orginally carved in 1791. The federal city would be reduced to a small enclave comprising the buildings of the Capitol, the White House and government agencies, grouped around the Mall.

For Washingtonians, the benefits would be huge. At a stroke, the city government would no longer have to provide expensive services that no other city is obliged to offer. Its citizens would pay taxes to Maryland but in return gain political representation at all levels, voting for Maryland senators and Maryland congressmen. Like New York, Chicago or any city in the land, Washington would still have its mayor, running the police department and other urban services. Except he would no longer be mayor of Washington, DC, but Washington, MD. This may be the city's best hope: otherwise, DC may soon be deceased.