Pentagon Spending: Profits and Politics Trump National Security

Last Updated on September 21, 2012.

(Crossposted at The Huffington Post)

This week in Washington the halls of Congress have been flooded with talk about looming cuts to the Pentagon. With members of Congress floating plans to undo planned cuts (known in Congressional jargon as “sequestration”) due to start in January, the lobbyists for America’s weapons makers, the Aerospace Industries Association (AIA), have been storming the Hill to scare Congress with talk of layoffs and ‘doomsday.’

Meanwhile, The Pentagon’s bloated budget has even become an issue in the biggest game in town, the Presidential election. Mitt Romney’s campaign has begun airing a series of advertisements that assert that the Obama administration’s policies on Pentagon spending will eliminate tens of thousands of jobs in key states such as Ohio and Colorado. The ads follow on a summer marked by a “scare tour” waged by the arms industry and its key allies in Congress including Senators John McCain (R-AZ), Kelly Ayotte (R-NH), and Lindsey Graham (R-SC). The senators traveled around the country — or at least the part of the country known as ‘swing states’ — asserting that modest additional cuts in Pentagon spending would devastate local economies.

By contrast, President Obama has asserted that “while my opponent would spend more money on military hardware that our Joint Chiefs don’t even want, I will use the money we’re no longer spending on war to pay down our debt and put more people back to work rebuilding roads and bridges and schools and runways.” So, while the president’s plan does not go as far as it could or should in scaling back the Pentagon’s spending plans, he has drawn a clear distinction between his approach and the one proposed by candidate Romney.

You might be wondering, why all the fuss? What’s going on? The real driving force behind this Fall’s Pentagon spending hysteria is not a sober assessment of the nation’s defense needs or an honest assessment of the impacts of Pentagon spending reductions. It is a combination of partisan politics and a push to preserve the profits of Pentagon contractors.

It is true that the days of ever increasing Pentagon contracts are coming to an end. But companies like Lockheed Martin continue to reap massive profits even as they sit on backlogs of tens of billions of dollars that will keep their revenues strong for years to come.

The civilian aerospace market continues to be strong, to the benefit of Boeing and other firms involved in this sector. On top of that, foreign arms sales tripled to an astounding $66 billion in 2011, the highest figure ever recorded for U.S. weapons exports. Add to this the stockpiles of money that have been authorized for them but not yet spent by the Pentagon, and it becomes clear that major weapons manufacturers will be the least affected institutions should sequestration come into play.

The truth is that companies like Lockheed Martin and Northrop Grumman could afford to keep on most if not all of their existing work force if they chose to do so. Instead, they are propping up CEO salaries that often reach over $20 million per executive while throwing skilled workers overboard. That means that highly paid contractor executives earn more in one day than the average worker earns in an entire year. Or, looked at another way, as calculated by Ben Freeman of the Project on Government Oversight, the pay of an arms industry CEO could pay the salaries and benefits of 335 soldiers.

And this doesn’t even take into account the millions that the defense industry spends on lobbyists — $133 million last year alone. These funds helped finance the activities of over 950 lobbyists – nearly two for every member of Congress. These lobbying efforts were reinforced by over $26 million in campaign contributions to key members of Congress over the past two election cycles. This combination of influence peddling and campaign cash too often trumps good policy.

So, there’s the profit part of the problem. What about partisanship? First, it is important to know that some of the politicians who are screaming loudest about the impacts of sequestration – from John McCain to Paul Ryan – voted for the budget deal that set up this process. Try as they may to pin the blame on President Obama, Congress played a central role in creating the process that has led to the possibility of the automatic cuts established under sequester coming into play.

There may be a small sliver of hope that the two parties can come together on a balanced budget reduction deal. Senators Kyl, McCain and Graham have acknowledged that new revenues may have to be part of any solution to the budget problem. And Tea Party favorites like Sen. Rand Paul have made it clear that Pentagon spending cuts beyond what’s currently on the table will be an essential part of the mix. And then there is Grover Norquist, the anti-tax activist who has repeatedly voiced his support for reductions in Pentagon spending.

Rather than letting partisan politics and the search for profits dominate the defense debate, we need to get back to basics. We need to talk about how to reshape the military to address the threats of the 21st century, an approach that a majority of Americans support. The discussion needs to be about how to protect the country, not how to protect profits and privilege. We have to demand an end to parochial politics and a beginning of a real debate on what it takes to defend us and our allies.

William D. Hartung is the director of the Arms and Security Project at the Center for International Policy. Stephen Miles is the Coalition Coordinator of Win Without War.

September 21, 2012