D.C.’s budget process is currently caught in a three-way stalemate, as Mayor Muriel Bowser, Council Chair Phil Mendelson, and Chief Financial Officer Glen Lee have continued to trade barbs and damage already-brittle relationships over a chaotic week in the Wilson Building. Loose Lips must admit it’s made for some high-quality political theater, but this is probably not how a city should be crafting a $20 billion spending plan.

Precious little has changed about the state of play on the 2025 budget since LL first revealed the developing quagmire earlier this week. Lee is still demanding that the city devote $250 million to its reserves, Bowser is still woefully behind schedule in delivering a budget proposal to the Council, and Mendelson is still furious at both of them for blowing up his beloved budget season. All three have dug deeper into their respective positions, and any compromise or climbdown has remained stubbornly elusive.

Mendelson, in particular, escalated tensions with a fiery speech from the dais Tuesday, blasting the mayor and the CFO in equal measure: He blamed Lee for a move that “subverts our authority … as appropriators,” while he faulted Bowser for her delay in sending the budget proposal to the CFO, which he deemed “an affront to the Council.” (She was legally required to deliver it to councilmembers by Wednesday.) Bowser has thus far chosen to be more diplomatic in public, passing on a chance to criticize Lee at an appearance Wednesday and downplaying the impacts of the budget delay. But LL hears that her team has remained as exasperated behind the scenes as ever. 

At last, she finally delivered budget documents to Lee for review Wednesday night, addressing some of Mendelson’s concerns, but the CFO still won’t be ready to send those files to the Council until March 30. Several Green Teamers have privately confided to LL that the whole situation is a bit embarrassing, noting that Bowser has never before missed such a budget deadline. Even the 2021 budget, formulated in spring 2020 as the pandemic upended the whole world, lacked this year’s chaos. Whatever the exact contours of the proposal, it is likely to meet Lee’s demands on the reserves, even as Bowser and the Council would both much rather convince the city’s bean counter to abandon this stance and let a budget without these reserve contributions advance.

Lee, meanwhile, is receiving counsel from several members of D.C.’s fiscally conservative old guard that he should hold the line against Bowser and Mendelson once the budget debate kicks off. Former Ward 2 Councilmember Jack Evans, for instance, says he’s repeatedly sought to reassure Lee that he’s doing the right thing to protect the city’s creditworthiness by stressing the importance of the reserves.

Another source advising Lee, who requested anonymity to discuss sensitive deliberations, has tried to frame it as a question of the CFO’s independence—the mayor hires the CFO, but the position is vested with broad authority to act separately from the executive branch, stemming from its origins in the Control Board days of the 1990s. If Lee buckles now, this source reasons that he risks damaging his credibility as independent arbiter of financial matters moving forward.

“He’s had to grow quickly and realize he is independent,” the source says, noting that Lee has only been on the job for less than two years and is still learning the intricacies of D.C.’s political scene. “He doesn’t work for the mayor, he doesn’t work for the Council, he doesn’t work for Congress … He has one job, and that is to keep D.C. fiscally solvent.”

Of course, this sort of stance could make it that much harder to strike some sort of bargain down the line. Mendelson said Tuesday that both he and City Administrator Kevin Donahue have asked Lee for a compromise, but “so far he has said no, and dug in.”

The way Lee sees it, one of his advisers says, he’s been “burned” by both Bowser and Mendelson in his short time in D.C., and he isn’t eager to repeat that experience. “His old job [in Seattle] was to help enable the electeds to accomplish what they wanted to accomplish,” the source says. “He had to learn the hard way: This job is different.”

First off, Lee felt frustrated by the dustup last year over Mendelson’s push to provide free Metrobus service in the city. Mendelson and Ward 6 Councilmember Charles Allen sought to fund the program out of any revenues that came into the city’s coffers above Lee’s initial projections (an increasingly popular way for the Council to fund programs). Lee initially certified that there would be enough revenue to make that happen, prompting celebrations from Mendelson and Allen. But as the city’s financial picture changed, Lee began to backtrack. 

Then, the source says, Lee got a closer look at Metro’s books and got a fuller picture of the transit system’s looming $750 million deficit and became even more concerned about the wisdom of launching a new program as existing service was under threat. When Lee ultimately refused to fund the program, Mendelson was furious and accused him of doing Bowser’s bidding. 

“Last year, he canceled the free bus program,” Mendelson fulminated Tuesday. “Next year he could cancel other programs or maybe insist on firing agency directors because they mismanage their budgets.” 

And that was just the half of it. Bowser had also asked Lee to certify a slightly novel approach to balance last year’s budget. She wanted to add hundreds of new traffic cameras and use the $576 million in revenue they were expected to generate to fill budget gaps. Again, Lee agreed, and again Mendelson flipped out. The Council had never been allowed to pull off such a maneuver before, so why was Bowser given the green light?

“Glen was like, ‘I tried to help these guys, and now they’re all mad at me,’” the source says.

So, this time around: No more Mr. Nice CFO, or so Lee’s thinking goes. (His spokespeople have not responded to additional requests for comment.) 

After clashing with the CFO over the past few weeks, Bowser seems content to let the Council sort all this out. She has her own problems to address, if the lengthy delay in sending the budget to Lee’s office is any indication. Mendelson repeatedly insisted that the slowdown was not related to Lee’s demands about the reserves, but no one to speak with LL, either from inside the administration or on the Council side of things, is precisely sure what slowed things down. Some speculated that Bowser was still unhappy with the mix of cuts and tax increases her team proposed to cover a roughly $1 billion budget gap; others think the chaos of the past few days caused more technical problems, and that her deputies were still ironing out the kinks to turn broad proposals into specific changes.

The Council is not powerless here, but its options will certainly be limited by whatever severely curtailed proposal Bowser delivers to them. Jen Budoff, the Council’s budget director, argues to LL that there is no statutory requirement that lawmakers replenish these reserves if year-end surpluses don’t allow them to do so (and they did not this year). Accordingly, the Council should be on solid legal footing if it crafts a budget that fills up the reserves gradually instead of all at once, as Lee prefers. Tazra Mitchell, chief policy and strategy officer at the left-leaning D.C. Fiscal Policy Institute, suggests the Council could even include language in the budget legislation making this point explicitly clear to strengthen its position.

But Lee can withhold his certification that the budget is balanced for any reason he chooses, regardless of what the Council does. That would prompt the sort of down-to-the-wire standoff that hasn’t been seen since 2019’s dispute over a different reserve account. 

Most Wilson Building whisperers expect Mendelson and Lee to ultimately strike a deal of some sort. The Council might not have the same legal tools on its side, but it can bring quite a bit of public pressure to bear, particularly if Bowser follows through on plans she’s floated to cut funding for early childhood educators in order to meet the CFO’s demands. Ward 1 Councilmember Brianne Nadeau and At-Large Councilmember Robert White have both already issued public statements calling on Bowser to preserve the Pay Equity Fund, and activist groups have started lining up to protest such a move. 

Will Lee, who is plainly still uncomfortable with his role in the spotlight, stand strong as he becomes the focus of a heated public debate? The next few months will provide the answer.