Locality pay is very high in the DC metro. Unemployment rates are very high in many cities with significantly lower locality pay rates. The government can realize significant savings in payroll and help reviltalize cities effected by the recession by relocating large groups of federal employees to other cities.
Modern technology allows for many conveniences including less dependance on physical location. Lets save money and help improve some local economies as we move more location independant jobs away from the over crowded, over costed DC metro.