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Contractors: The Pentagon Isn’t a Jobs Program

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As the fiscal cliff approaches, pressure to cut wasteful spending at the Pentagon is growing immensely. The bipartisan push, from Senator Tom Coburn’s (R-Okla.) plan to cut “Department of Defense Spending That Has Little to Do With National Security,” to Representative Barbara Lee (D-Calif.) recommending that Congress “toss wasteful defense programs off the cliff,” and many others, has now attracted the most unlikely proponent of Pentagon spending reductions—contractors.

At a National Press Club event last Monday, attended by the Project On Government Oversight, the Chief Executive Officers (CEO) of two contractors called for cutting Pentagon spending. Wes Bush, CEO of Northrop Grumman and 2013 Chairman of the Aerospace Industries Association (AIA), suggested Pentagon spending cuts in the $20 to $25 billion range over the next ten years.

David Langstaff, CEO of The Analytic Science Corporation, went even further, arguing that the Pentagon budget should be cut by around $150 billion over 10 years. Langstaff also chastised some in his industry for being “unwilling to park short-term self-interest…we need to stop pretending there’s a scenario out there that offers no defense cuts.”

In a marked reversal from the industry’s hyperbolic job-loss threats, the CEO’s also made it perfectly clear that the Pentagon is not a jobs program. When I asked the panelists to explain the industry’s poor record of job-creation, Wes Bush said, “The defense industry should never be looked at as a jobs program.”

While extraordinarily unexpected, this was a welcome reversal and echoes credible studies that have found defense spending to be an inefficient way to create jobs. This was further evidenced by the AIA’s own aerospace and defense industry revenue and employment figures released last week. As Sydney Freedberg reported in AOL Defense, “The aerospace and defense sector’s estimated 3.4 percent increase in sales since 2011 dwarfs its 0.64 percent increase in employment. That undermines AIA’s oft-repeated argument that January’s automatic cuts to federal spending would endanger two million jobs, half of them from defense cuts alone.”

All of this is indicative of the growing tide of support for reining in profligate Pentagon spending. Polling shows that Americans are in favor of reductions to Pentagon spending even greater than those proposed under sequestration, which would still leave Pentagon spending at a higher level, in inflation adjusted dollars, than it was throughout most of the Cold War. Even former military leaders, such as Admiral Mike Mullen, who is heading the Coalition for Fiscal and National Security, are emphasizing the need to rein in military spending.

This is all welcome news to POGO and many other groups from across the ideological spectrum that have identified hundreds of billions of dollars of wasteful Pentagon spending.

Cutting waste at the Pentagon and strengthening our economic security will strengthen our national security. Congress can avoid sequestration’s meat-cleaver approach, and instead use a scalpel to make strategic cuts. We know where to get the savings and our plans are on the table. It’s time for Congress and the President to pick from ours or the many other menus for trimming the fat at the Pentagon.

By: Ben Freeman, Ph. D.
Investigator, POGO

ben freeman At the time of publication, Ben Freeman was an investigator for the Project On Government Oversight. Ben's work focused on national security and the influence of foreign lobbying on the U.S.

Topics: National Security

Related Content: Defense, Sequester, Wasteful Defense Spending

Authors: Ben Freeman, Ph. D.

Submitted by Dfens at: December 13, 2012
Sadly, we could both cut defense spending and get more from that spending if we would only apply some common sense reforms to the way our money is spent by the military. First, the design of big ticket items such as ships, heavy lift rockets, and bombers/cargo aircraft should be done by design bureaus wholly owned and run by the branch of the military requiring these vehicles. When the US Navy designed their own ships, we had a naval force both larger and more capable than the one we have now. In fact, it was over twice the size. When NASA designed its own rockets, we could go to the moon, now we rent rides on ex-Soviet rockets to get our astronauts to low Earth orbit, just like Mexico does. When the Air Force designed its own aircraft it took less than 50 years to go from the first airplane to being the first country to break the sound barrier. Today it takes 30 years to design a small fighter airplane. Second, we should never pay a for-profit government contractor a profitable rate to design anything. There is an inherent conflict of interest in paying a contractor at a profitable rate for any kind of activity that does not provide a quantifiable result. This kind of common sense reform should be applied across all of government, not just the defense department.
Submitted by Blinding Insight at: December 11, 2012
You may have ignored what's in the belly of the contractor beast: the companies love change and benefit from almost any kind of change. In this case, services providers (which all the big hardware companies also are), and certainly firms like TASC, know that they will benefit, up to a point, from missing or RIF'd federal employees. In normal times, it is easier to get and use program dollars than dollars for federal emps. Yes, these are not normal times, but some of these companies will go a long way to netting out cuts in existing services contracts by garnering new tasks and contracts for must-have, mission-related support that federal employees purportedly provided--when they were there. Also, many industry experts would throw ice water on your attempt to find a direct relationship between "sales" and contractor employees. After you consider lead-lag issues, substantial subcontracting, the effect of "things"--like software--purchased along with labor from those firms, you will probably stop being so breathless about the difference between "sales" and headcount. There are many ways to legitimately criticize these companies, but beating them over the head with "jobs" arguments is hard to take almost any way you make the argument.

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