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Project on Government Oversight

The Sky Is Not Falling: The Truth About Pentagon Budget Cuts And Jobs

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July 31, 2012

As Senators John McCain (R-Ariz.), Lindsey Graham (R-S.C.) and Kelly Ayotte (R-N.H.) parrot the talking points of Pentagon contractors this week at town hall meetings in Florida, North Carolina, Virginia and New Hampshire, we urge you to push back on some of the more outlandish rhetoric you’re  likely to hear.

It’s unlikely the trio will mention the record earnings by large Pentagon contractors, the exorbitant executive salaries paid at these firms, the billions of dollars lost to waste and mismanagement and the fact that several politically-diverse national security experts say even if the deepest Pentagon cuts occur (and that is scenario is unlikely) it will have a negligible effect on industry.

Simply put, the threats of mass layoffs are political scare tactics by an industry that can afford to spend tens of millions of dollars on lobbying and campaign contributions, while at the same time crying that the “sky is falling.”

To help set the record straight, please see the detailed briefing paper the Project On Government Oversight and its allies prepared to rebut the industry talking points.

If Pentagon contractors were actually feeling economic pressure, they could certainly trim excesses at the top before letting go thousands of rank-and-file employees. Pentagon contractors’ top executives enjoy compensation packages on par with Wall Street CEOs. The CEOs of Lockheed Martin, Boeing, United Technologies, and Northrup Grumman all made between $22 and $27.6 million in total annual compensation for 2011, and David Cote of Honeywell brought home a whopping $37.8 million.

These companies could probably afford to keep quite a few of their employees on the payroll if a few execs took modest pay cuts. What’s more, big Pentagon contractors have hundreds of billions of dollars in backlogged orders that will maintain their revenue streams and keep their employees busy delivering goods and services for years to come.

As our briefing paper points out, the talking points that Senators McCain, Graham and Ayotte will cover are backed by industry fronts, such as Second to None, which is funded by the Aerospace Industries Association. The Coalition for the Common Defense has also recently published over 200 pages on how the defense cuts will affect jobs and small businesses state by state. This publication is a product of the Center for Security Policy, a neoconservative think tank affiliated with executives and lobbyists from across the spectrum of top U.S. weapons manufacturers.

The truth is national polls show that Americans believe it’s time to rein in runaway Pentagon spending.

To read our briefing paper, please click here.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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