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"Living on the cheap"--depends what you can put up with--lot of bike riding, walking, buses? Either a roommate situation, group house, or tiny studio/basement apartment? Regardless, rent is a big budget breaker here. Car insurance is very expensive, too. Places to live on craigslist that are cheap and tolerable go EXTREMELY fast, most as soon as they are put up.
Capitol Hill has what you are looking for. You will have to up that rent a bit unless you are looking for a room mate or a studio. Eastern Market is nice and you could find something there, its got some good places to eat and drink. Dupont and upper NW has some good wine bars but sadly not for $1500 rent. What it really comes down to is, are you willing to travel to see the Capitol, or are you working there? If you are working there you can public transport to SW Waterfront or Eastern Market, or Navy Yard and save money that way, no reason to have a car by the way, to much traffic and gas costs
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