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Defense Contractors Are Raking It In

Despite all of the hype coming from defense contractors  and others that Pentagon spending reductions would devastate the industry and lead to mass lay-offs, economic ruin and the collapse of our fighting forces, these companies managed to take in a pretty penny this last quarter.

Both Lockheed Martin (maker of the $1.5 trillion F-35 debacle) and Northrop Grumman posted huge profits, with Northrop’s shares rising 56%. Even F-22 Crashcompanies that didn’t do as well posted profit increases over last year – before spending reductions went into effect.

Though defense contractors are doing just fine financially (thank you very much), the CEOs plan to “up the volume” on efforts to pad their bank accounts the Pentagon’s budget with new tales of doom and gloom.  

But it’s not just defense contractors sounding the alarm; the Joint Chiefs of Staff are also making the case for increased Pentagon spending, going so far as to understate their own troops’ combat-readiness. And of course, the defense hawks in Congress are more than happy to go along for the ride – even suggesting that lawmakers take money away from the elderly, disabled and small children so the Pentagon can have more funds to spend on things like this.

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Gunning for Social Security – Republicans Want to Cut Entitlement Programs to Pay for More Pentagon Spending

Now that the government shutdown and debt-ceiling crises have been averted for a few months, Republican “defense hawks” like Sen. John McCain and Rep. Buck McKeon will be looking for ways to remove spending caps on the Pentagon that were mandated by the Budget Control Act (BCA). Seniors and the disabled better watch out.

The BCA was passed by Congress in 2011 to prevent another debt-ceiling crisis (sound familiar?). It instituted mandatory caps on discretionary government spending – defense (the Pentagon) and non-defense. Non-defense spending includes everything from education and housing assistance to infrastructure improvements and NASA.  

RamboMost Republicans now insist that Congressional budget agreements stay within the BCA spending caps. So the only way “defense hawks” will be able to boost the Pentagon’s budget is by taking funds from other places, in this case entitlement programs like Social Security, Medicare and Medicaid – which were not included in the BCA.

While many Democrats have scoffed at the idea, there is reason to worry. Some Democratic lawmakers, including President Obama, have suggested they are willing to make a deal with Republicans in return for new tax revenue or funds for other programs. This is bad news.

Republicans have long sought to increase Pentagon spending at the expense of domestic spending. And cutting entitlement programs is always at the top of their to-do list. The upcoming budget conference, which is being chaired by Rep. Paul Ryan and Sen. Patty Murray, is where they will likely try to cut a deal.

Everyone knows that the Pentagon has a long history of waste and financial mismanagement (like this, and this, and don’t forget this).  For these “defense hawks” to say that the Pentagon needs more money is deceitful at best; but to try and steal that money from the elderly and disabled is downright disgusting.  

Read the story here.

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Some Good, Some Bad. Defense Appropriations Passes the House

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Unfinished business

Yesterday the House of Representatives passed a $595 billion Appropriations bill for the Department of Defense.  This act of fantasy budgeting completely ignores mandatory cuts set forth by the Budget Control Act (sequestration) and includes billions for weapons systems that the Pentagon didn’t even ask for.  Not all is lost however, as several amendments passed the House that brought a dose of fiscal responsibility to the bill.   The primary source of fiscal sanity came from a bipartisan amendment cutting $3.5 billion that had been added to the budget.  This was an extra $3.5 billion the Pentagon didn’t even ask for, for overseas operations just as overseas operations are winding down.  Another $554 million was cut from Afghan operations to buy Russian helicopters that Afghans don’t know how to operate or maintain.  Most egregious amongst the many additions to the pork-riddled document was an extra $950 million for Virginia-class submarines and $70 million to begin East Coast preparations for missile defense operations.  This is the same missile defense program that has failed every test since 2008 and has no enemy to fire against.  While cutting Afghan slush funds is a hopeful development, the Pentagon is still riddled with Congressional Pork masquerading as weapons systems.  Congress must still act to prioritize investments in America that protect the Middle Class and our future prosperity.

To read the article, click here.