The Pentagon budget is mostly just a public bailout for arms companies

Speaking Security Newsletter | Advisory Note for Organizers and Candidates, n°87 | 3 June 2021

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Situation

Biden’s proposed military budget is a nominal increase from Trump despite a cut to the Procurement account (DOD’s weapons buying fund), the account Congress is most likely to boost. Given that Congress already adds an average of $13 billion on top of what the president initially requests for the Pentagon, it’s reasonable to think that Biden meant his $753 billion request as the budgetary floor, not ceiling.

In exchange for alienating the progressive wing of his party with his budget request, Biden got a thumbs up from military contractors:

The reason military contractors are upbeat is because higher military budgets = higher profits

Fifty to 60 percent of the Pentagon budget is awarded to contracts, depending on the year. But overall the Pentagon budget trends toward corporate capture. So Biden’s budget is tantamount to a massive giveaway to arms companies.

A coddled, but high-risk industry

It’s also a massive bailout because the war industry relies on public subsidies. Government contracts made up between 37 to 84 percent of total company revenue at at the top 5 weapons firms last year. This excludes cash from foreign military sales, which is also dependent on congressional action (or inaction).

Getting Congress to listen to the people instead of corporations is something anti-imperialism’s got in common with a bunch of other movements. But this fight’s simpler, I think, because of the outsized role Congress plays—it’s the buyer in this near-monopsony (you aren’t buying an F-35 and neither am I nor my neighbor Dave, etc).

Ultimately it’s a fight to convince a very small amount of people whose job it is to decide what to do with public funds—aka our money—and those peoples’ job is also to represent us. Despite repeated successes, a business model that’s built on elite consensus smushing majority will is still risky in this context.

Industry knows this. The tenuousness of these firms’ reliance on Congress is admitted in their 10-K reports to the SEC (under “Risk Factors”):

^These are all from 2020 forms.

Thanks for your time,

Stephen (@stephensemler; stephen@securityreform.org)

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