Large corporate contractors providing military hardware and services distort Department of Defense (DoD) spending. They inflate U.S. military spending and generate waste, abuse, and sometimes outright fraud.
(Note: If you find my posts too much to read on occasion, please just read the bolded portions. They present the key points I’m making.)
The United States spends more on its military (over $800 billion a year) than the combined total of the next nine biggest military spenders: China, India, Russia, United Kingdom, Saudi Arabia, Germany, France, Japan, and South Korea. The U.S. also spends a larger share of its overall economy on military spending than its key allies, spending roughly twice the percentage of its Gross Domestic Product on the military as do the UK, France, Italy, Canada, Germany, and Japan.
U.S. military spending is roughly half of all federal government discretionary spending (i.e., spending that is authorized each year as opposed to multi-year, mandatory spending such as Social Security and Medicare). Even after adjusting for inflation, Department of Defense spending has been higher in each of the last 20 years than in any previous year since World War II. Over these 20 years, it’s been higher each year than the spike in DoD spending during President Reagan’s military build-up in the 1980s and higher than the spending peaks during the Korean and Vietnam Wars. [1]
In the budget for fiscal year 2023 that was just passed by Congress, military spending is $858 billion and spending for all other federal government programs and functions is $787 billion. There’s also $85 billion in emergency spending; $47 billion for Ukraine and $38 billion for natural disasters that occurred in 2022. These three pieces make up the $1.73 trillion overall cost of the omnibus budget bill. The $858 billion for the military is $45 billion MORE than the Biden administration requested.
This very high level of military spending in the last 20 years is due in good part to the political activities of large corporations that provide military hardware and services. These corporations have spent about $130 million a year on lobbying for the last 25 years. In addition, they have contributed about $15 million a year to candidates and political committees for the last 15 years, with a spike in contributions to $51 million for the two-year 2020 campaign cycle. This political spending targets presidential candidates and members of Congress who sit on the armed services and appropriations committees that have jurisdiction over military spending. [2] One analysis of military spending attributes excessive Department of Defense spending to three causes: corporate lobbying, pork-barrel politics, and strategic overreach. [3]
In addition to the direct lobbying and campaign contributions of these corporations, they also pay significant amounts to trade associations and other groups lobbying for more defense spending in general, sometimes for their corporate interests explicitly, and sometimes for positions the corporations support but want to keep at arms’ length (so they are not associated with them in their shareholders’ or the public’s eyes). These groups include the U.S. Chamber of Commerce, the Business Roundtable, the National Defense Industrial Association, the Air Force Association, the Navy League, the Submarine Industrial Base Council, and state and local groups lobbying for funding for local jobs. The military contractors also provide in excess of $100 million a year to think tanks that advocate for more military spending.
Roughly half of military spending goes to contractors and about half of that, over $100 billion per year, goes to just five huge military contractors. These five and their 2020 contract awards in billions are: Lockheed Martin ($75B), Raytheon, ($28B), General Dynamics ($22B), Boeing ($22B), and Northrop Grumman ($20B). From 2001 to 2020, these five corporations received over $2.1 trillion in DoD contracts (adjusted for inflation). These five corporations have been the five biggest recipients of government money every year since 2016 except in 2021 when Pfizer broke in due to spending on the Covid vaccine. [4] Similar to what’s happened in so many industries in the U.S. economy, mergers and acquisitions have reduced what were 51 companies in the 1990s to just these five huge, powerful, politically active corporations.
The Department of Defense’s growing reliance on private contractors raises issues of accountability and transparency, increases risks of waste and fraud, and creates perverse, profit-driven incentives. The five huge military contractors are spending about $40 to $50 million a year on lobbying. Overall, the defense industry hires about 700 lobbyists each year to lobby the executive branch and the 435 members of Congress. The majority of these lobbyists have come through the revolving door from jobs in Congress, the DoD, or other military-related positions in the executive branch of the federal government.
Further evidence of the revolving door is one study’s finding of 645 instances in 2018 alone of the top 20 military contractors hiring former members of Congress or their staffs, ex-military officers, or former executive branch officials. The revolving door turns the other way as well and, for example, four of the past five Secretaries of Defense came from the top five military contractors. [5]
The very high level of U.S. military spending is not necessary to keep the country safe. The DoD (which has never passed an audit) and its contractors are known for significant waste, abuse, and sometimes outright fraud. For example, the F-35 jet fighter may never fly a combat mission because of its hundreds of defects and problems. Nonetheless, the Defense Department has contracted for 2,400 of the planes at a multi-year cost of $200 billion. Lockheed Martin, which builds the plane, spends about $13 million a year on lobbying and $7 million on campaign contributions. This, and its exaggerated claims about the number of jobs the F-35 program creates (which it breaks down by state), have pushed Congress to approve spending for even more planes than the DoD asked for! [6]
One straightforward but valuable step that could be taken to address the issue of corporate influence on DoD spending would be for President Biden to issue an executive order requiring companies with significant government contracts to disclose all their direct and indirect political spending. Such transparency would allow the public and our elected officials to better understand and counteract the military contractors’ self-serving lobbying and campaign activities.
I urge you to contact President Biden and to ask him to require the disclosure of all political spending by government contractors. You can email President Biden at http://www.whitehouse.gov/contact/submit-questions-and-comments or you can call the White House comment line at 202-456-1111 or the switchboard at 202-456-1414.
[1] Hartung, W. D., 9/13/21, “Profits of war: Corporate beneficiaries of the post-9/11 Pentagon spending surge,” Watson Institute, Brown University (https://watson.brown.edu/costsofwar/files/cow/imce/papers/2021/Profits%20of%20War_Hartung_Costs%20of%20War_Sept%2013%2C%202021.pdf)
[2] Open Secrets, Retrieved from the Internet 12/28/22, “Summary of defense industry political spending,” (https://www.opensecrets.org/industries/indus.php?Ind=D)
[3] Williams, J., & Hartung, W. D., 8/14/22, “Secret spending by the weapons industry is making us less safe,” The Hill (https://thehill.com/opinion/national-security/3588029-secret-spending-by-the-weapons-industry-is-making-us-less-safe/)
[4] Giorno, T., & Timotija, F., 11/3/22, “Defense sector spent $101 million on lobbying during the first three quarters of 2022.,” Open Secrets (https://www.opensecrets.org/news/2022/11/defense-sector-spent-101-million-lobbying-during-first-three-quarters-of-2022/)
[5] Hartung, W. D., 9/13/21, see above
[6] Williams, J., & Hartung, W. D., 8/14/22, see above
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