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More Money, Fewer Jobs: The Military-Industrial Myth

Reprinted with permission from TomDispatch.

A Marilyn has once again seduced a president. This time, though, it’s not a movie star; it’s Marillyn Hewson, the head of Lockheed Martin, the nation’s top defense contractor and the largest weapons producer in the world. In the last month, Donald Trump and Hewson have seemed inseparable. They “saved” jobs at a helicopter plant. They took the stage together at a Lockheed subsidiary in Milwaukee. The president vetoed three bills that would have blocked the arms sales of Lockheed (and other companies) to Saudi Arabia. Recently, the president’s daughter Ivanka even toured a Lockheed space facility with Hewson.

On July 15th, the official White House Twitter account tweeted a video of the Lockheed CEO extolling the virtues of the company’s THAAD missile defense system, claiming that it “supports 25,000 American workers.” Not only was Hewson promoting her company’s product, but she was making her pitch — with the weapon in the background — on the White House lawn. Twitter immediately burst with outrage over the White House posting an ad for a private company, with some calling it “unethical” and “likely unlawful.”

None of this, however, was really out of the ordinary as the Trump administration has stopped at nothing to push the argument that job creation is justification enough for supporting weapons manufacturers to the hilt. Even before Donald Trump was sworn in as president, he was already insisting that military spending was a great jobs creator. He’s only doubled down on this assertion during his presidency. Recently, overriding congressional objections, he even declared a national “emergency” to force through part of an arms sale to Saudi Arabia that he had once claimed would create more than a million jobs. While this claim has been thoroughly debunked, the most essential part of his argument — that more money flowing to defense contractors will create significant numbers of new jobs — is considered truth personified by many in the defense industry, especially Marillyn Hewson.

The facts tell a different story.

Lockheed Locks Down Taxpayer Dollars, While Cutting American Jobs

To test Trump’s and Hewson’s argument, we asked a simple question: When contractors receive more taxpayer money, do they generally create more jobs? To answer it, we analyzed the reports of major defense contractors filed annually with the U.S. Securities and Exchange Commission (SEC). Among other things, these reveal the total number of people employed by a firm and the salary of its chief executive officer. We then compared those figures to the federal tax dollars each company received, according to the Federal Procurement Data System, which measures the “dollars obligated,” or funds, the government awards company by company.

We focused on the top five Pentagon defense contractors, the very heartland of the military-industrial complex, for the years 2012 to 2018. As it happened, 2012 was a pivotal year because the Budget Control Act (BCA) first went into effect then, establishing caps on how much money could be spent by Congress and mandating cuts to defense spending through 2021. Those caps were never fully adhered to. Ultimately, in fact, the Pentagon will receive significantly more money in the BCA decade than in the prior one, a period when the American wars in Afghanistan and Iraq were at their heights.

In 2012, concerned that those caps on defense spending would cut into their bottom lines, the five top contractors went on the political offensive, making future jobs their weapon of choice. After the Budget Control Act passed, the Aerospace Industries Association — the leading trade group of the weapons-makers — warned that more than one million jobs would be at risk if Pentagon spending were cut significantly. To emphasize the point, Lockheed sent layoff notices to 123,000 employees just before the BCA was implemented and only days before the 2012 election. Those layoffs never actually happened, but the fear of lost jobs would prove real indeed and would last.

Consider it mission accomplished, since Pentagon spending was actually higher in 2018 than in 2012 and Lockheed received a sizeable chunk of that cash infusion. From 2012 to 2018, among government contractors, that company would, in fact, be the top recipient of taxpayer dollars every single year, those funds reaching their zenith in 2017, as it raked in more than $50.6 billion federal dollars. By contrast, in 2012, when Lockheed was threatening its employees with mass layoffs, the firm received nearly $37 billion.

So what did Lockheed do with those additional $13 billion taxpayer dollars?  It would be reasonable to assume that it used some of that windfall (like those of previous years) to invest in growing its workforce. If you came to that conclusion, however, you would be sorely mistaken. From 2012 to 2018, overall employment at Lockheed actually fell from 120,000 to 105,000, according to the firm’s filings with the SEC and the company itself reported a slightly larger reduction of 16,350 jobs in the U.S. In other words, in the last six years Lockheed dramatically reduced its U.S. workforce, even as it hired more employees abroad and received more taxpayer dollars.

So where is all that additional taxpayer money actually going, if not job creation? At least part of the answer is contractor profits and soaring CEO salaries. In those six years, Lockheed’s stock price rose from $82 at the beginning of 2012 to $305 at the end of 2018, a nearly four-fold increase. In 2018, the company also reported a 9% ($590 million) rise in its profits, the best in the industry. And in those same years, the salary of its CEO increased by $1.4 million, again according to its SEC filings.

In short, since 2012 the number of taxpayer dollars going to Lockheed has expanded by billions, the value of its stock has nearly quadrupled, and its CEO’s salary went up 32%, even as it cut 14% of its American work force. Yet Lockheed continues to use job creation, as well as its employees’ present jobs, as political pawns to get yet more taxpayer money. The president himself has bought into the ruse in his race to funnel ever more money to the Pentagon and promote arms deals to countries like Saudi Arabia, even overthe nearly unified objections of an otherwise incredibly divided Congress.

Lockheed Is the Norm, Not the Exception

Despite being this country’s and the world’s top weapons maker, Lockheed isn’t the exception but the norm. From 2012 to 2018, the unemployment rate in the U.S. plummeted from roughly 8% to 4%, with more than 13 million new jobs added to the economy. Yet, in those same years, three of the five top defense contractors slashed jobs. In 2018, the Pentagon committed approximately $118 billion in federal money to those firms, including Lockheed — nearly half of all the money it spent on contractors. This was almost $12 billion more than they had received in 2012. Yet, cumulatively, those companies lost jobs and now employ a total of 6,900 fewer employees than they did in 2012, according to their SEC filings.

In addition to the reductions at Lockheed, Boeing slashed 21,400 jobs and Raytheon cut 800 employees from its payroll. Only General Dynamics and Northrop Grumman added jobs — 13,400 and 16,900 employees, respectively — making that total figure look modestly better. However, even those “gains” can’t qualify as job creation in the normal sense, since they resulted almost entirely from the fact that each of those companies bought another Pentagon contractor and added its employees to its own payroll. CSRA, which General Dynamics acquired in 2018, had 18,500 employees before the merger, while Orbital ATK, which General Dynamics acquired last year, had 13,900employees. Subtract these 32,400 jobs from the corporate totals and job losses at the firms become staggering.

In addition, those employment figures include all company employees, even those now working outside the U.S. Lockheed is the only top five Pentagon contractor that provides information on the percentage of its employees in the U.S., so if the other firms are shipping jobs overseas, as Lockheed has done and as Raytheon is planning to do, far more than 6,900 full-time jobs in the U.S. have been lost in the last six years.

Where, then, did all that job-creation money really go? Just as at Lockheed, at least part of the answer is that the money went to the bottom-line and to top executives. According to a report from PricewaterhouseCoopers, a consulting firm that provides annual analyses of the defense industry, “the aerospace and defense (A&D) sector scored record revenues and profits in 2018” with an “operating profit of $81 billion, surpassing the previous record set in 2017.” According to the report, Pentagon contractors were at the forefront of these profit gains. For example, Lockheed’s profit improvement was $590 million, followed closely by General Dynamics at $562 million. As employment shrank, CEO salaries at some of these firms only grew. In addition to compensation for Lockheed’s CEO jumping from $4.2 million in 2012 to $5.6 million in 2018, compensation for the CEO of General Dynamics increased from $6.9 million in 2012 to a whopping $20.7 million in 2018.

Perpetuating the Same Old Story

This is hardly the first time that these companies have extolled their ability to create jobs while cutting them. As Ben Freeman previously documented for the Project On Government Oversight, these very same firms cut almost 10% of their workforce in the six years before the BCA came into effect, even as taxpayer dollars heading their way annually jumped by nearly 25% from $91 billion to $113 billion.

Just as then, the contractors and their advocates — and there are many of them, given that the weapons-making outfits spend more than $100 million on lobbying yearly, donate tens of millions of dollars to the campaigns of members of Congress every election season, and give millions to think tanks annually — will rush to defend such job losses. They will, for instance, note that defense spending leads to job growth among the subcontractors used by the major weapons firms. Yet research has repeatedly shown that, even with this supposed “multiplier effect,” defense spending produces fewer jobs than just about anything else the government puts our money into. In fact, it’s about 50% less effective at creating jobs than if taxpayers were simply allowed to keep their money and use it as they wished.

As Brown University’s Costs of War project has reported, “$1 billion in military spending creates approximately 11,200 jobs, compared with 26,700 in education, 16,800 in clean energy, and 17,200 in health care.” Military spending actually proved to be the worst job creator of any federal government spending option those researchers analyzed. Similarly, according to a report by Heidi Garrett-Peltier of the Political Economy Research Institute at the University of Massachusetts, Amherst, for every $1 million of spending on defense, 6.9 jobs are created both directly in defense industries and in the supply chain. Spending the same amount in the fields of wind or solar energy, she notes, leads to 8.4 or 9.5 jobs, respectively. As for the education sector, the same amount of money produced 19.2 jobs in primary and secondary education and 11.2 jobs in higher education. In other words, not only are the green energy and education areas vital to the future of the country, they are also genuine job-creating machines. Yet, the government gives more taxpayer dollars to the defense industry than all these other government functions combined.

You don’t, however, have to turn to critics of defense spending to make the case. Reports from the industry’s own trade association show that it has been shedding jobs. According to an Aerospace Industries Association analysis, it supported approximately 300,000 fewer jobs in 2018 than it had reportedsupporting just three years earlier.

If the nation’s top defense contractor and the industry as a whole have been shedding jobs, how have they been able to consistently and effectively perpetuate the myth that they are engines of job creation? To explain this, add to their army of lobbyists, their treasure trove of campaign contributions, and those think tanks on the take, the famed revolving door that sends retired government officials into the world of the weapons makers and those working for them to Washington.

While there has always been a cozy relationship between the Pentagon and the defense industry, the lines between contractors and the government have blurred far more radically in the Trump years. Mark Esper, the newly minted secretary of defense, for example, previously worked as Raytheon’s top lobbyist in Washington.  Spinning the other way, the present head of the Aerospace Industries Association, Eric Fanning, had been both secretary of the Army and acting secretary of the Air Force. In fact, since 2008, as the Project On Government Oversight’s Mandy Smithberger found, “at least 380 high-ranking Department of Defense officials and military officers shifted into the private sector to become lobbyists, board members, executives, or consultants for defense contractors.”

Whatever the spin, whether of that revolving door or of the defense industry’s publicists, the bottom line couldn’t be clearer: If job creation is your metric of choice, Pentagon contractors are a bad taxpayer investment. So whenever Marillyn Hewson or any other CEO in the military-industrial complex claims that spending yet more taxpayer dollars on defense contractors will give a jobs break to Americans, just remember their track record so far: ever more dollars invested means ever fewer Americans employed.

Nia Harris is a Research Associate at the Center for International Policy.

Cassandra Stimpson is a Research Associate at the Center for International Policy.

Ben Freeman, a TomDispatch regular, is the Director of the Foreign Influence Transparency Initiative at the Center for International Policy and Co-Chair of its Sustainable Defense Task Force.

The Lobbyists Who Profit From War Crimes In Yemen

Reprinted with permission from TomDispatch.

A springtime wedding in Northern Yemen’s Al-Raqah village took place in April 2018, a moment of reprieve from the turmoil and devastation of that war-torn country, a moment to celebrate life, love, and the birth of a new family. From the tents constructed for the event, music flooded into the village and, as at any good wedding, exuberant dancing was a central part of the festivities.

Unbeknownst to the guests, the music masked the buzzing of a warplane overhead. Suddenly, in a horrific turn of events, Saudi-led forces launched a deadly airstrike and 20-year-old groom Yahya Ja’afar’s wedding was transformed into a scene of carnage. Deafened by the explosion, guests fearfully searched for loved ones in a sea of confusion and body parts. In a telling photo, the flowery wreaths worn by celebrants lie atop a landscape of rubble. At least 20 wedding-goers lost their lives to the Saudi-led coalition’s now four-year-old brutal campaign in that country.

Shortly thereafter, media reports identified the bomb as American-made — a GBU-12 Paveway II linked to Raytheon, one of the Pentagon’s largest defense contractors. Tragedies like this, however, didn’t stop President Trump from exercising his veto power on April 16th to reject a resolution passed by Congress to end American involvement in the Yemeni conflict. Nor did they sway most Republicans in Congress to use their override power to kill the veto on May 2nd. After all, for many of Washington’s actors, such tragedies, while devastating, are part of a remarkably lucrative business model.

Obviously, this is the case for the American defense companies that have been supplying weapons and equipment of all sorts to Saudi Arabia and the United Arab Emirates (UAE) in their ongoing war. But it’s no less so for the little-publicized lobbying groups that represent them. In 2018, more than a dozen such firms were working on behalf of the Saudis or the Emiratis, while also providing their services to defense contractors whose weapons are being used in the conflict.

Two prominent examples of lobbying firms with significant stakes in the Yemen War are the McKeon Group and American Defense International (ADI). Both firms have cleverly managed to represent both the most powerful U.S. arms manufacturers and Saudi Arabia and the United Arab Emirates. This lobbying model, which allows them to satisfy multiple clients at the same time — contractors eager to secure arms deals and foreign powers that depend on American political and military support — has played a significant role in keeping the United States rooted in the Yemen conflict.

Yahya Ja’afar’s wedding illustrates a disturbing pattern. Reports indicate that, at the sites of many Saudi-UAE coalition airstrikes in Yemen, evidence of munitions produced by the big four American defense contractors — Lockheed Martin, Boeing, General Dynamics, and Raytheon — can be found. These four companies represent the largest suppliers of weapons to the Saudi and UAE coalition and have spent millions of dollars on lobbying efforts to retain political support in Washington. Their arsenal of lobbyists works tenaciously on the Hill, securing meetings with top officials on key congressional committees to advocate and push for increased arms sales.

In 2018, according to the Lobbying Disclosure Act website, which provides information on such firms and their domestic clients, Boeing spent $15 million on lobbyists, Lockheed Martin $13.2 million, General Dynamics $11.9 million, and Raytheon $4.4 million. While this may seem like an exorbitant amount of money, such expenses have yielded an extraordinary return on investment via arms sales to the Saudis and Emiratis. A report published by the Center for International Policy last year documented that such companies and others like them sold $4.5 billion worth of weapons to Saudi Arabia and $1.2 billion to the United Arab Emirates in 2018 alone. And at the heart of this web of money are firms like ADI and the McKeon Group that make their profits off both the weapon-makers and the war makers.

Led by former Republican congressman and chairman of the House Armed Services Committee Howard “Buck” McKeon, the McKeon Group has double-dipped in this “forgotten war” for three years now. After all, the firm represents many of the top sellers of arms and munitions, including Lockheed Martin, Northrop Grumman, Orbital ATK, MBDA, and L3 Technologies, as well as Saudi Arabia. In other words, the McKeon Group lobbies Washington’s political machine for both the sellers and the buyer.

From his earliest days in the House, Buck McKeon has had ties to the U.S. defense industry. His trajectory into and out of Congress offers, in fact, a perfect example of what Washington’s military-industrial “revolving door” looks like. From 1991 to 2014, years when he held California’s 25th Congressional district seat, McKeon receivedcampaign contributions totaling $192,900 from Lockheed Martin and $190,200 from Northrop Grumman. Those two companies were then his top campaign contributors and are now his current clients. In return, he advanced their interests inside Congress, especially as the powerful chairman of the Armed Services Committee, and now does the same from the outside as a major lobbyist. His firm receives an annual retainer of $190,000from Lockheed Martin and $110,000 from Northrop Grumman for its efforts on the Hill. In 2018 alone, in fact, the firm took in a whopping $1,697,000from 10 of the largest defense contractors to, among other objectives, continue the flow of arms to Saudi Arabia.

At the same time, McKeon and his firm also work directly for Saudi Arabia, which just happens to be one of the biggest foreign buyers of Lockheed Martin and Northrop Grumman weaponry. The records of the Foreign Agents Registration Act (FARA) reveal that, last year, the McKeon Group was paid$920,148.21 by the Kingdom and engaged in aggressive political lobbying in Congress against bills that would have adversely affected the U.S. arms trade with the Saudis. Above all, there was S.J. 54, the Yemen Resolution jointly sponsored by Senator Bernie Sanders (I-VT) and Senator Mike Lee (R-UT), meant to end American involvement in that war. FARA filings indicate that the firm made numerous phone calls and sent multiple emails to members of the Senate and House as key votes approached.

Most notably, on November 14, 2018, exactly two weeks before a vote on the resolution was to take place, the McKeon Group contacted Oklahoma Republican Senator Jim Inhofe, the current chairman of the Armed Services Committee, on behalf of the Saudis. Inhofe’s congressional office was called in “regards to the KSA [Kingdom of Saudi Arabia]” and again on November 29th, the day after the vote, regarding S.J. Res. 54.” On the 14th, the firm also gave a $1,000 donation to the Senator. Ultimately, Inhofe voted in favor of continuing military support for the Saudis, undeterred by the thousands of civilian deaths the war has caused.

When the McKeon Group succeeds in advancing the agenda of the Saudis and the giant weapons makers in Washington, it proves its value and receives significant compensation. And nothing, including the murder of Washington Post columnist Jamal Khashoggi in the Saudi consulate in Istanbul or continued reports on the country’s brutal war and blockade in Yemen, which has left significant numbers of Yemenis dead of, or at the edge of, starvation, has stopped Buck McKeon and his firm from continuing to ramp up their lobbying activities.

As for American Defense International, it has similarly double-dipped in the Yemen war. It, too, represents an impressive list of defense contractors, including Raytheon, General Dynamics, Northrop Grumman, L3 Technologies, and General Atomics — and also the United Arab Emirates, the Saudi-war coalition member that often slides under the media radar.

At a moment filled with harrowing reports of death, starvation, and devastation in Yemen, ADI’s lobbyists spent their days aggressively advancing the interests of their Emirati and defense contractor clients. For instance, FARA reports reveal that, in September 2018, ADI called the office of New Mexico Democratic Senator Martin Heinrich, a member of the Armed Services Committee, on behalf of the UAE embassy in Washington. The discussion, according to FARA, focused on the “situation in Yemen” and the “Paveway sale to the UAE” — in other words, on the sale of the very kind of Raytheon bomb that turned Yahya Ja’afar’s wedding into the scene of a deadly airstrike. FARA filings also indicate, for example, that during the same month, ADI met with the policy adviser for Louisiana Republican Congressman Steve Scalise to lobby against the congressional resolution on Yemen. For these and similar efforts, the UAE continued to pump $45,000 a month into ADI. At the same time, such lobbying efforts clearly benefited another client of the firm: Raytheon. The manufacturer of Paveway bombs paid ADI $120,000 in 2018.

For firms like American Defense International and the McKeon Group, war is a matter of profits and clients and little else.

President Trump’s veto of the resolution to end American support for the Saudi-UAE coalition in Yemen and Congress’s inability to override it (against the wishes of much of the American public) have, for the moment, left lobbying outfits like the McKeon Group and ADI in the driver’s seat. That veto, after all, made it clear that, for Donald Trump and many congressional Republicans, the well-being of the Saudi royals and of defense contractors matters more than a bus carrying school children destroyed by a laser-guided MK-82 bomb made by Lockheed Martin; that the wellbeing of Raytheon is of far greater importance than a family traveling in their car hit by a GBU-12 laser-guided bomb made by that very company; that the profits of such defense contractors are so much more important than the lives of the men, women, and children who were in a marketplace in Yemen on a quiet afternoon in March 2016, when another MK-82 bomb took the lives of at least 80 of them.

In addition to being used repeatedly in air strikes that have killed civilians, American munitions have also evidently made it into the hands of terrorist organizations in Yemen. Reports indicate that the very weapons that companies like Lockheed Martin and Raytheon are selling to the Saudis and Emiratis have, in some instances, been stolen or even sold to organizations linked to al-Qaeda in the Arab Peninsula, arms that could someday even be used against U.S. military personnel.

Today, with the President’s veto and Congress’s failure to override it, the Saudi-UAE coalition, U.S. defense contractors, and their American lobbyists have, in essence, been given a green light to proceed with a business model that counts innocent Yemenis’ deaths as the cost of doing business. Still, though yet another battle has been lost in that war at home, opposition to it may not yet be relegated to the dustbin of history. Certain members of Congress are still looking for new ways of tackling the issue, including the possibility of defunding American involvement in the war and the human rights violations that go with it.

Clearly, there are still opportunities to send a message that Saudi Arabia and the United Arab Emirates can no longer simply write checks to lobbying firms like the McKeon Group and ADI to purchase influence and ensure that American politicians look the other way. Someday perhaps the United States will no longer allow itself to be implicated in tragedies like Yahya Ja’afar’s wedding that end with a landscape of rubble and the remnants of an American bomb.

Mashal Hashem and James Allen are research associates with the Foreign Influence Transparency Initiative at the Center for International Policy.

Copyright 2019 Mashal Hashem and James Allen

Underfunded Pentagon? Not If You Look At The Real Budget

Reprinted with permission from TomDispatch.

In its latest budget request, the Trump administration is asking for a near-record $750 billion for the Pentagon and related defense activities, an astonishing figure by any measure. If passed by Congress, it will, in fact, be one of the largest military budgets in American history, topping peak levels reached during the Korean and Vietnam Wars. And keep one thing in mind: that $750 billion represents only part of the actual annual cost of our national security state.

There are at least 10 separate pots of money dedicated to fighting wars, preparing for yet more wars, and dealing with the consequences of wars already fought. So the next time a president, a general, a secretary of defense, or a hawkish member of Congress insists that the U.S. military is woefully underfunded, think twice. A careful look at U.S. defense expenditures offers a healthy corrective to such wildly inaccurate claims.

Now, let’s take a brief dollar-by-dollar tour of the U.S. national security state of 2019, tallying the sums up as we go, and see just where we finally land (or perhaps the word should be “soar”), financially speaking.

The Pentagon’s “Base” Budget: The Pentagon’s regular, or “base,” budget is slated to be $544.5 billion in Fiscal Year 2020, a healthy sum but only a modest down payment on total military spending.

As you might imagine, that base budget provides basic operating funds for the Department of Defense, much of which will actually be squandered on preparations for ongoing wars never authorized by Congress, overpriced weapons systems that aren’t actually needed, or outright waste, an expansive category that includes everything from cost overruns to unnecessary bureaucracy. That $544.5 billion is the amount publicly reported by the Pentagon for its essential expenses and includes as well $9.6 billion in mandatory spending that goes toward items like military retirement.

Among those basic expenses, let’s start with waste, a category even the biggest boosters of Pentagon spending can’t defend. The Pentagon’s own Defense Business Board found that cutting unnecessary overhead, including a bloated bureaucracy and a startlingly large shadow workforce of private contractors, would save $125 billion over five years. Perhaps you won’t be surprised to learn that the board’s proposal has done little to quiet calls for more money. Instead, from the highest reaches of the Pentagon (and the president himself) came a proposal to create a Space Force, a sixth military service that’s all but guaranteed to further bloat its bureaucracy and duplicate work already being done by the other services. Even Pentagon planners estimate that the future Space Force will cost $13 billion over the next five years (and that’s undoubtedly a low-ball figure).

In addition, the Defense Department employs an army of private contractors — more than 600,000 of them — many doing jobs that could be done far more cheaply by civilian government employees. Cutting the private contractor work force by 15 percent to a mere half-million people would promptly save more than $20 billion per year. And don’t forget the cost overruns on major weapons programs like the Ground-Based Strategic Deterrent — the Pentagon’s unwieldy name for the Air Force’s new intercontinental ballistic missile — and routine overpayments for even minor spare parts (like $8,000  for helicopter gear worth less than $500, a markup of more than 1,500 percent).

Then there are the overpriced weapons systems the military can’t even afford to operate like the $13-billion aircraft carrier, 200 nuclear bombers at $564 million a pop, and the F-35 combat aircraft, the most expensive weapons system in history, at a price tag of at least $1.4 trillion over the lifetime of the program. The Project On Government Oversight (POGO) has found — and the Government Accountability Office recently substantiated — that, despite years of work and staggering costs, the F-35 may never perform as advertised.

And don’t forget the Pentagon’s recent push for long-range strike weapons and new reconnaissance systems designed for future wars with a nuclear-armed Russia or China, the kind of conflicts that could easily escalate into World War III, where such weaponry would be beside the point. Imagine if any of that money were devoted to figuring out how to prevent such conflicts, rather than hatching yet more schemes for how to fight them.

Base Budget total: $554.1 billion

The War Budget: As if its regular budget weren’t enough, the Pentagon also maintains its very own slush fund, formally known as the Overseas Contingency Operations account, or OCO. In theory, the fund is meant to pay for the war on terror — that is, the U.S. wars in Afghanistan, Iraq, Somalia, Syria, and elsewhere across the Middle East and Africa. In practice, it does that and so much more.

After a fight over shutting down the government led to the formation of a bipartisan commission on deficit reduction — known as Simpson-Bowles after its co-chairs, former Clinton Chief of Staff Erskine Bowles and former Republican Senator Alan Simpson — Congress passed the Budget Control Actof 2011. It officially put caps on both military and domestic spending that were supposed to save a total of $2 trillion over 10 years. Half of that figure was to come from the Pentagon, as well as from nuclear weapons spending at the Department of Energy. As it happened, though, there was a huge loophole: that war budget was exempt from the caps. The Pentagon promptly began to put tens of billions of dollars into it for pet projects that had nothing whatsoever to do with current wars (and the process has never stopped). The level of abuse of this fund remained largely secret for years, with the Pentagon admitting only in 2016 that just half of the money in the OCO went to actual wars, prompting critics and numerous members of Congress — including then-Congressman Mick Mulvaney, now President Trump’s latest chief of staff — to dub it a “slush fund.”

This year’s budget proposal supersizes the slush in that fund to a figure that would likely be considered absurd if it weren’t part of the Pentagon budget. Of the nearly $174 billion proposed for the war budget and “emergency” funding, only a little more than $25 billion is meant to directly pay for the wars in Iraq, Afghanistan, and elsewhere. The rest will be set aside for what’s termed “enduring” activities that would continue even if those wars ended, or to pay for routine Pentagon activities that couldn’t be funded within the constraints of the budget caps. The Democratic-controlled House of Representatives is expected to work to alter this arrangement. Even if the House leadership were to have its way, however, most of its reductions in the war budget would be offset by lifting caps on the regular Pentagon budget by corresponding amounts. (It’s worth noting that President Trump’s budget calls for someday eliminating the slush fund.)

The 2020 OCO also includes $9.2 billion in “emergency” spending for building Trump’s beloved wall on the U.S.-Mexico border, among other things. Talk about a slush fund! There is no emergency, of course. The executive branch is just seizing taxpayer dollars that Congress refused to provide. Even supporters of the president’s wall should be troubled by this money grab. As 36 former Republican members of Congress recently argued, “What powers are ceded to a president whose policies you support may also be used by presidents whose policies you abhor.” Of all of Trump’s “security”-related proposals, this is undoubtedly the most likely to be eliminated, or at least scaled back, given the congressional Democrats are against it.

War Budget total: $173.8 billion

Running tally: $727.9 billion

The Department of Energy/Nuclear Budget: It may surprise you to know that work on the deadliest weapons in the U.S. arsenal, nuclear warheads, ishoused in the Department of Energy (DOE), not the Pentagon. The DOE’s National Nuclear Security Administration runs a nationwide research, development, and production network for nuclear warheads and naval nuclear reactors that stretches from Livermore, California, to Albuquerque and Los Alamos, New Mexico, to Kansas City, Missouri, to Oak Ridge, Tennessee, to Savannah River, South Carolina. Its laboratories also have a long history of program mismanagement, with some projects coming in at nearly eight times the initial estimates.

Nuclear Budget total: $24.8 billion

Running tally: $752.7 billion

“Defense Related Activities”: This category covers the $9 billion that annually goes to agencies other than the Pentagon, the bulk of it to the FBI for homeland security-related activities.

Defense Related Activities total: $9 billion

Running tally: $761.7 billion

The five categories outlined above make up the budget of what’s officially known as “national defense.” Under the Budget Control Act, this spending should have been capped at $630 billion. The $761.7 billion proposed for the 2020 budget is, however, only the beginning of the story.

The Veterans Affairs Budget: The wars of this century have created a new generation of veterans. In all, over 2.7 million U.S. military personnel have cycled through the conflicts in Iraq and Afghanistan since 2001. Many of them remain in need of substantial support to deal with the physical and mental wounds of war. As a result, the budget for the Department of Veterans Affairs has gone through the roof, more than tripling in this century to a proposed $216 billion. And this massive figure may not even prove enough to provide the necessary services.

More than 6,900 U.S. military personnel have died in Washington’s post-9/11 wars, with more than 30,000 wounded in Iraq and Afghanistan alone. These casualties are, however, just the tip of the iceberg. Hundreds of thousands of returning troops suffer from post-traumatic stress disorder (PTSD), illnesses created by exposure to toxic burn pits, or traumatic brain injuries. The U.S. government is committed to providing care for these veterans for the rest of their lives. An analysis by the Costs of War Project at Brown University has determined that obligations to veterans of the Iraq and Afghan wars alone will total more than $1 trillion in the years to come. This cost of war is rarely considered when leaders in Washington decide to send U.S. troops into combat.

Veterans Affairs total: $216 billion

Running tally: $977.7 billion

The Homeland Security Budget: The Department of Homeland Security (DHS) is a mega-agency created after the 9/11 attacks. At the time, it swallowed 22 then-existing government organizations, creating a massive department that currently has nearly a quarter of a million employees. Agencies that are now part of DHS include the Coast Guard, the Federal Emergency Management Agency (FEMA), Customs and Border Protection, Immigration and Customs Enforcement (ICE), Citizenship and Immigration Services, the Secret Service, the Federal Law Enforcement Training Center, the Domestic Nuclear Detection Office, and the Office of Intelligence and Analysis.

While some of DHS’s activities — such as airport security and defense against the smuggling of a nuclear weapon or “dirty bomb” into our midst — have a clear security rationale, many others do not. ICE — America’s deportation force — has done far more to cause suffering among innocent people than to thwart criminals or terrorists. Other questionable DHS activities include grants to local law enforcement agencies to help them buy military-gradeequipment.

Homeland Security total: $69.2 billion

Running tally: $1.0469 trillion

The International Affairs Budget: This includes the budgets of the State Department and the U.S. Agency for International Development (USAID). Diplomacy is one of the most effective ways to make the United States and the world more secure, but it has been under assault in the Trump years. The Fiscal Year 2020 budget calls for a one-third cut in international affairs spending, leaving it at about one-fifteenth of the amount allocated for the Pentagon and related agencies grouped under the category of “national defense.” And that doesn’t even account for the fact that more than 10% of the international affairs budget supports military aid efforts, most notably the $5.4 billion Foreign Military Financing (FMF) program. The bulk of FMF goes to Israel and Egypt, but in all over a dozen countries receive funding under it, including Jordan, Lebanon, Djibouti, Tunisia, Estonia, Latvia, Lithuania, Ukraine, Georgia, the Philippines, and Vietnam.

International Affairs total: $51 billion

Running tally: $1.0979 trillion     

The Intelligence Budget: The United States has 17 separate intelligence agencies. In addition to the DHS Office of Intelligence and Analysis and the FBI, mentioned above, they are the CIA; the National Security Agency; the Defense Intelligence Agency; the State Department’s Bureau of Intelligence and Research; the Drug Enforcement Agency’s Office of National Security Intelligence; the Treasury Department’s Office of Intelligence and Analysis; the Department of Energy’s Office of Intelligence and Counterintelligence; the National Reconnaissance Office; the National Geospatial-Intelligence Agency; Air Force Intelligence, Surveillance and Reconnaissance; the Army’s Intelligence and Security Command; the Office of Naval Intelligence; Marine Corps Intelligence; and Coast Guard Intelligence. And then there’s that 17th one, the Office of the Director of National Intelligence, set up to coordinate the activities of the other 16.

We know remarkably little about the nature of the nation’s intelligence spending, other than its supposed total, released in a report every year. By now, it’s more than $80 billion. The bulk of this funding, including for the CIA and NSA, is believed to be hidden under obscure line items in the Pentagon budget. Since intelligence spending is not a separate funding stream, it’s not counted in our tally below (though, for all we know, some of it should be).

Intelligence Budget total: $80 billion

Running tally (still): $1.0979 trillion

Defense Share of Interest on the National Debt: The interest on the national debt is well on its way to becoming one of the most expensive items in the federal budget. Within a decade, it is projected to exceed the Pentagon’s regular budget in size. For now, of the more than $500 billion in interest taxpayers fork over to service the government’s debt each year, about $156 billion can be attributed to Pentagon spending.

Defense Share of National Debt total: $156.3 billion

Final tally: $1.2542 trillion

So, our final annual tally for war, preparations for war, and the impact of war comes to more than $1.25 trillion — more than double the Pentagon’s base budget. If the average taxpayer were aware that this amount was being spent in the name of national defense — with much of it wasted, misguided, or simply counterproductive — it might be far harder for the national security state to consume ever-growing sums with minimal public pushback. For now, however, the gravy train is running full speed ahead and its main beneficiaries — Lockheed Martin, Boeing, Northrop Grumman, and their cohorts — are laughing all the way to the bank.

William D. Hartung, a TomDispatch regular, is the director of the Arms and Security Project at the Center for International Policy and the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.

Mandy Smithberger, a TomDispatch regular, is the director of the Center for Defense Information at the Project On Government Oversight.

Copyright 2019 William D. Hartung and Mandy Smithberger

IMAGE: Aerial view of the United States military headquarters, the Pentagon, September 28, 2008. REUTERS/Jason Reed

 

 

How F-35 Fighters Will Siphon An Extra Trillion Dollars From Taxpayers

Reprinted with permission from DCReport.

When you buy a new car, you aren’t required to go back to the dealership for oil changes, but our nation’s taxpayers are stuck with billions of dollars in bills to maintain pricey weapons systems and aircraft from politically connected firms like Lockheed Martin and Boeing after they sell them to the government.

These “sustainment costs” for the next generation of F-35 fighter jets, already the world’s most expensive weapons program, are expected to top $1 trillion over the life of the program.

“Contractors want the government to accept whatever costs or prices they offer with little review or recourse for overpricing, regardless of contract type or the level of competition involved,” said J. David Cox, the national president of the American Federation of Government Employees.

Cox was criticizing a recent government report that recommends ways to ease regulations on contractors to make it easier for our country’s military to compete with China and Russia in modernizing weapons.

“Nothing could be farther from the truth,” Cox wrote in his letter to the chairmen and ranking members of the House and Senate Armed Services Committees. “If these changes were implemented, they would compound the effects of previous misguided ‘reforms’ and result in large unnecessary costs.”

Will Roper, the assistant secretary of acquisition, technology and logistics for the Air Force, wants to get away from the sustainment model. He suggested paying a license fee or royalties to contractors.

The Air Force could make contracts for upgrades and repairs part of a bidding process and use software that allows different companies to design add-ons for it.

Contractors are pushing back.

“I’m more convinced than ever that would be a mistake,” said Tim Matthews, a retired rear admiral and vice president of F-35 sustainment for Lockheed Martin.

In 2016, Lockheed Martin employed 55 former Defense Department officials as board members or lobbyists, according to a report by Project on Government Oversight.

Boeing, whose KC-46 tanker aircraft were temporarily rejected by the Air Force because of trash and tools left inside, has even more former Defense Department officials on its payroll – 84 in 2016. Acting Defense Secretary Patrick Shanahan spent 31 years at Boeing.

The estimated price tag for operating and supporting the latest generation of F-35 fighter jets over more than six decades recently grew by almost $73 billion to $1.196 trillion. Our country plans to buy 2,456 of the jets: 1,763 for the Air Force, 420 for the Marines and 273 for the Navy.