The Department of Defense Contractors

The conservatives proclaiming now is a time of “fiscal responsibility” must have forgotten that they enacted tax cuts for the rich and spent $12 billion a month in Iraq. Now there is a growing right-wing movement to cut so-called “wasteful entitlement” programs such as Social Security as a means of balancing the budget. Meanwhile, make any attempt to cut defense spending and conservatives are ready to attack. Why are conservatives so hostile to cuts? Those lucrative defense contracts would be placed in jeopardy, of course.

Defense consumes more than one-third of all government expenditures. DOD’s expected expenditures in 2009 are $741 billion [1]; include other affiliated agencies and operations this figure comes to nearly $1 trillion. Since 2001, defense spending has increased over 110 percent [2] and is at its highest compared to any other period except World War II [3]. This level of spending is astonishing, considering that the U.S. spends more on defense than the next 45 highest spending countries combined [4]—including 5.8 times more than China (2nd highest), 10.2 times more than Russia (3rd highest), and 98.6 times more than Iran (22nd highest) – and will account for 48 percent of the world's total military spending.

Criticize this obscene level of funding and conservatives are armed with their empty rhetoric of “supporting the troops” and “protecting America.” In reality, the defense budget serves as a profit bonanza for defense contractors. Over the past eight years defense contractors have seen their profits soar to record levels, even amid the recession.

For instance, the Iraq War is the most privatized war this nation has seen, with nearly 20 percent of funding for operations [5]—about $85 billion—going to private contractors such as Halliburton or Blackwater.

Our intelligence community is outsourced also, with 70 percent of the intelligence budget [6] going to contractors. Moreover, funding does not even stay on American soil, approximately one-third of defense contracts [7] for the Iraq and Afghan Wars have gone to foreign companies.

Amid the funding blitz, the Defense Department continues to fail nearly every audit performed. According to a July 2008 General Accountability Office report [8], the Defense Contract Audit Agency (responsible for all DOD accounting and contract audits) “improperly influenced the audit scope, conclusions, and opinions of some audits. Problems call into question the reliability of pricing audit reports issued connected with over $6.4 billion in government contract negotiations."

This outright fraud and lack of transparency is nothing new for the Pentagon, as numerous examples point to their mismanagement and waste. The most infamous of DOD contract failures is the F-22 Raptor fighter jet [9]program developed by Lockheed Martin; originally slated to be delivered in the mid 1980s, delivery has yet to be completed with an ever ballooning cost over $65 billion. The Air Force began in 2006 another multibillion dollar redevelopment of the Cold War era jet.

More highlights of waste:

• The Pentagon faces $300 billion in cost overruns [10] for 72 weapons systems acquisitions provided by contractors such as Boeing and Northrop Grumman.
• In Iraq, $13 billion for development and reconstruction [11]paid to contractors is unaccounted for, while little work was completed.
• The Pentagon still rewarded private contractors with $8 billion in performance bonuses [12] without consideration of cost overruns and delays.

The revolving door of the military industrial complex must shut. According to the GAO [13], between 2004 and 2006 2,435 former DOD officials were hired by one or more defense contractors, many former DOD employees working on contracts related to their former agencies and influencing contract decisions. Moreover, defense contractors have been found [14] to cost more due to overruns and billing, endanger troops’ lives due to delivery delays or shoddy construction and jeopardize the success of military objectives.

Conservatives and deficit hawks who continue to attack important social programs that benefit average Americans must be shamed. Our nation’s fiscal and national security shall no longer be used as a pawn to enrich the defense establishment and contractors. Barney Frank is a proponent of cutting the defense budget by as much as 25 percent and will hold a Congressional hearing next week. We will see if the Obama administration too begins to cut the lifeline of the military industrial complex when the OMB releases their budget next Thursday.