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A Post-Coronavirus Economy Can No Longer Afford to Put the Pentagon First
The inadequate response of both the federal and state governments to the Covid-19 pandemic has had a devastating impact on the United States, creating what could only be called a national security crisis. More than 190,000 Americans are dead, approximately half of them people of color. Yelp data show that more than 132,000 businesses have already closed and census data suggest that, thanks to lost wages, nearly 17% of Americans with children can’t afford to feed them enough food.
In this same period, a number of defense contractors have been doing remarkably well. Lockheed Martin, the Pentagon’s top contractor, reported that, compared to 2019, its earnings are actually up — yes, up! The company’s success led the financial magazine Barron’s to call it a “pandemic star.” And those profits are only likely to grow, given the Trump administration’s recent approval of a 10-year deal to sell $62 billion worth of its F-16s to Taiwan.
And Lockheed Martin is far from the only such outfit. As Defense Onereported, “It’s becoming abundantly clear that companies with heavy defense business have been able to endure the coronavirus pandemic much better” than, for instance, commercial aerospace firms. And so it was that, while other companies have cut or suspended dividends during the pandemic, Lockheed Martin, which had already raised its gift to shareholders in late 2019, continued to pay the same amount this March and September.
The spread of Covid-19 has created one of the most significant crises of our time, but it’s also provided far greater clarity about just how misplaced the priorities of Washington have been all these years. Americans — the Trump administration aside — are now trying to deal with the health impacts of the pandemic and struggling to figure out how to safely reopen schools. It’s none too soon, however, to start thinking as well about how best to rebuild a devastated economy and create new jobs to replace those that have been lost. In that process, one thing is crucial: resisting the calls — and count on it, they will come — to “rebuild” the war economy that had betrayed us long before the coronavirus arrived on our shores, leaving this country in a distinctly weakened state.
A New Budget Debate?
For the past decade, the budget “debate” in this country has largely been shaped by the Budget Control Act, which tried to save $1 trillion over those 10 years by placing nominal caps on both defense and non-defense spending. Notably, however, it exempted “war spending” that falls in what the Pentagon calls its Overseas Contingency Operations account. While some argued that caps on both defense and non-defense spending created parity, the Pentagon’s ability to use and abuse that war slush fund (on top of an already gigantic base budget) meant that the Pentagon still disproportionately benefited by tens of billions of dollars annually.
In 2021, the Budget Control Act expires. That means a Biden or Trump administration will have an enormous opportunity to significantly reshape federal spending. At the very least, that Pentagon off-budget slush fund, which creates waste and undermines planning, could be ended. In addition, there’s more reason than ever for Congress to reassess its philosophy of this century that the desires of the Pentagon invariably come first, particularly given the need to address the significant economic damage the still-raging pandemic is creating.
In rebuilding the economy, however, count on one thing: defense contractors will put every last lobbying dollar into an attempt to convince the public, Congress, and whatever administration is in power that their sector is the country’s major engine for creating jobs. As TomDispatch regular Bill Hartung has shown, however, a close examination of such job-creation claims rarely stands up to serious scrutiny. For example, the number of jobs created by recent arms sales to Saudi Arabia are now expected to be less than a tenthof those President Trump initially bragged about. As Hartung noted in February, that’s “well under .03% of the U.S. labor force of more than 164 million people.”
As it turns out, creating jobs through Pentagon spending is among the least effective ways to rebuild the economy. As experts at the University of Massachusetts and Brown University have both discovered, this country would get significantly more job-creation bang for the bucks it spends on weaponry by investing in rebuilding domestic infrastructure, combating climate change, or creating more alternative energy. And such investments would pay additional dividends by making our communities and small businesses stronger and more resilient.
Defense Contractors Campaigning for Bailouts
At the Project On Government Oversight where I work, I spend my days looking at the many ways the arms industry exerts disproportionate influence over what’s still called (however erroneously in this Covid-19 moment) “national security” and the foreign policy that goes with it, including this country’s forever wars. That work has included, for instance, exposing how a bevy of retired military officers advocated buying more than even the Pentagon requested of the most expensive weapons system in history, Lockheed Martin’s F-35 jet fighter, while failing to disclose that they also had significant personal financial interests in supporting that very program. My colleagues and I are also continually tracking the many officials who leave the Pentagon to go to work on the boards of or to lobby for arms makers or leave those companies and end up in the Pentagon and elsewhere in the national security state. That’s known, of course, as the military-industrial complex’s “revolving door.” And as President Trump recently noted, it helps ensure that those endless wars never end, while stoking an ever-increasing Pentagon budget. While his actions on behalf of the arms industry don’t back up his rhetoric, his diagnosis of the problem is largely on target.
And yet, as familiar as I am with the damage that the weapons industry has done to our country, I still find myself shocked at how a number of those companies have responded to the current crisis. Almost immediately, they began lobbying the Department of Defense to make their employees part of this country’s “essential critical infrastructure,” so that they could force them to return to work, pandemic or not. That decision drew a rare rebuke from the unions representing those workers, many of whom feared for their lives.
And mind you, only then did things become truly perverse. In the initial Covid-19 relief bill, Congress gave the Pentagon $1 billion to help respond to the pandemic. Such aid, as congressional representatives imagined it, would be used to purchase personal protective equipment for employees who still had to show up at work, especially since the Department of Defense’s own initial estimate was that the country would need to produce as many as 3.3 billion N95 masks in six months. The Pentagon, however, promptly gave those funds to defense contractors, including paying for such diverse “needs” as golf-course staffing, hypersonic missile development, and microelectronics, a Washington Post investigation found. House appropriators responded that money for defense contractors “was not the original intent of the funds.”
And now those defense contractors are asking for yet more bailouts. Earlier this summer, they successfully convinced the Senate to put $30 billion for the arms industry in its next coronavirus relief bill. As CQ Roll Call reported, the top beneficiaries of that spending spree would be the Pentagon’s two largest contractors: Lockheed Martin and Boeing.
The pandemic has certainly resulted in some delays and unexpected expensesfor such companies, but the costs borne by the weapons industry pale compared to the devastation caused to so many businesses that have had to close permanently. Every sector of the economy is undoubtedly facing unexpected costs due to the pandemic, but apparently the Department of Defense, despite being by far the best-funded military on the planet, and its major contractors, among the richest and most successful corporations in America, have essentially claimed that they will be unable to respond to the crisis without further taxpayer help. The chair of the House Armed Services Committee and the lead Democrat for the Senate’s defense appropriations subcommittee recently pointed out that, even though contractors across the federal government are facing pandemic challenges, no other agency has asked for additional funds to cover the costs of the crisis. Instead, they have worked on drawing from their existing resources.
It’s laughable to suggest that the very department that already has by far the most resources on hand and is, of course, charged with leading the country’s response to unexpected threats can’t figure out how to adjust without further funding. But most defense contractors see no reason to adapt since they know that they can continue to count on Washington to bail them out.
Still, the defense industry has become impatient that Congress hasn’t already acquiesced to their demands. In July, executives at most of the major contractors sent a letter to the White House demanding more money. In it, they included a not-so-subtle threat of electoral consequences for the president and Senate Republicans in close races if such funds weren’t provided. Only one major contractor, Northrop Grumman, has stayed awayfrom such highly public lobbying efforts because its CEO apparently had the common sense to recognize that her company was doing too well to demand more when so many others are desperate for money, particularly minority-owned businesses, many of which are likely to never come back.
On a Glide Path to Disaster?
There are signs, however, that someday such eternal winners in the congressional financial sweepstakes may finally be made accountable thanks to the pandemic. This summer, both the House and the Senate for the first time each considered an amendment to cut the Pentagon’s budget by 10%. Such efforts even received support from at least some moderates, including Senate Minority Leader Chuck Schumer (D-NY), although it went down to defeat in both houses of Congress. Although Democratic vice presidential candidate Senator Kamala Harris (D-CA) refused to support the specifics of the amendment, she did at least express her agreement with the principle of needing to curtail the Pentagon’s spending spree during this crisis. “As a member of the Senate Intelligence and Homeland Security Committees, I’m keenly aware of the global threats facing our country,” she said in a statementshe released after the vote. “I unequivocally agree with the goal of reducing the defense budget and redirecting funding to communities in need.”
The first real test of whether this country will learn any of the right lessons about national security from this ongoing pandemic moment will undoubtedly come in next year’s budget debate when the question will be: Is everything finally going to be on the table? As I previously wrote at TomDispatch, giving the Pentagon trillions of dollars in these years in no way prepared this country for the actual national security crisis of our lives. In fact, even considering the Pentagon’s ridiculously outsized budget, prioritizing funding for unaffordable and unproven weapons systems over healthcare hurt its ability to keep the military and its labor force safe. No less significantly, continuing to prioritize the Pentagon over the needs of every other agency and Americans more generally keeps us on a glidepath to disaster.
A genuinely new discussion of budget priorities would mean, as a start, changing the very definition of “security” to include responding to the many risks we actually face when it comes to our safety: not just pandemics, but the already increasing toll of climate change, a crumbling infrastructure, and a government that continues to disproportionately benefit the wealthy and well-connected over everyone else.
At the simplest level, the “defense” side of the budget ledger should be made to reflect what we’re really spending now on what passes for national security. That means counting homeland security and veterans’ benefits, along with many other expenses that often get left out of the budget equation. When such expenses are indeed included, as Brown University’s Costs of War Project has discovered, the real price tag for America’s wars in the Greater Middle East alone came to more than $6.4 trillion by 2020. In other words, even to begin to have an honest debate about how America’s other needs are funded, there would have to be a far more accurate accounting of what actually has been spent in these years on “national security.”
Surprisingly enough, unlike Congress (or the Pentagon), the voting public already seems to grasp the need for change. The nonprofit think tank Data for Progress found that more than half of likely voters support cutting the Pentagon’s budget by 10% to pay for domestic priorities like fighting the coronavirus. A University of Maryland poll found bipartisan majorities opposed to cutting funding generally with two notable exceptions: Pentagon spending and agricultural subsidies.
Unfortunately, those in the national security establishment are generally not listening to what the American people want. Instead, they’re the captives of a defense industry that eternally hypes new Cold War-style competition with China and Russia, both through donations to Washington think tanks and politicians and that infamous revolving door.
In fact, the Trump administration is a military-industrial nightmare when it comes to that endlessly spinning entrance and exit. Both of his confirmed secretaries of defense and one acting secretary of defense came directly from major defense contractors, including the current one, former Raytheon lobbyist Mark Esper — and the Biden administration seems unlikely to be all that different. As the American Prospect reported recently, several members of his foreign policy team have already circumvented ethics rules that would restrict lobbying activities by becoming “strategic consultants” to the very defense firms aiming to win more Pentagon contracts. For example, Biden’s most likely secretary of defense, Michèle Flournoy, became a senior adviserto Boston Consulting Group and the first three years she was with that company, it increased its Pentagon contract earnings by a factor of 20.
So whoever wins in 2020, increased spending for the Pentagon, rather than real national security, lies in store. The people, it seems, have spoken. The question remains: will anyone in Washington listen to them?
Mandy Smithberger is the director of the Center for Defense Information at the Project On Government Oversight (POGO).
Copyright 2020 Mandy Smithberger. First published in TomDispatch. Included in Vox Populi with permission.
F-35A Lightning II: Development cost: US$428 billion; Unit cost: US$78million; Contractor: Lockheed Martin