US Military Industry May Be Disappointed by the Reality of New Spending

by Stuart Burns on MARCH 6, 2017

President Donald Trump’s address to Congress this week included a defense department budget request which it claimed was historic.

 “I am sending Congress a budget that rebuilds the military, eliminates the defense sequester and calls for one of the largest increases in national defense spending in American history,” he is quoted by the New York Times is saying.

What’s a Few Hundred Billion?

While claims that the proposed increase to the defense budget is historic might be stretching the truth, Trump’s proposal to add $54 billion to the Pentagon’s budget is said to amount to a 10% increase, a significant rise — If it was true. Unfortunately, the New York Times is not alone in questioning numbers. We have little interest here in making claims about fake news, but we’re more concerned about those communities and industries that rely on military spending for their livelihoods.

Questions have been raised in recent years about the readiness of today’s U.S. military. After fighting two major wars in Afghanistan and Iraq, troops are said to be exhausted and supplies depleted. Even so, the U.S. spends more money on its military than the next seven countries combined.

The U.S., for example, has more aircraft carriers than any other nation on earth. Indeed, it likely has as many is everyone else combined, depending on if nine of its 19 are “active” or not.  An article on vox.com states the Budget Control Act of 2011 capped spending for the Pentagon, the Department of Energy (which includes the nuclear arsenal) and assorted other national security agencies at $549 billion in 2008.

You Want Fighter Jets With That Carrier?

Trump is proposing to spend $603 billion in 2018, the difference being the purported $54 billion increase announced this week. Good news, you might think, for the shipyards, aircraft builders, manufacturers of tanks and artillery. But ,on closer inspection, the real increase in spending appears to be much less. President Obama had already projected spending $585 billion on national security for 2017, figures that had been costed into current programs, making the increase in revenue the new administration is proposing just $18 billion.

It’s hard to square president Trump’s talk of expanding the Navy from 274 ships to 350, a move that would make it the largest build up since the end of the Cold War. In practice experts quoted by Vox said it would cost as much as $165 billion dollars over the next 30 years solely to purchase the new ships and submarines required. A testament to the huge sums involved, President Trump spoke this week to an audience on the U.S.S. Gerald R. Ford, an aircraft carrier under construction and docked in eastern Virginia that, when completed, will have cost in excess of $13 billion, not counting a further nearly $5 billion of research and development costs. An $18 billion increase isn’t going to fund too many ships, and rebuild the Army, and buy more fighter jets, even if the president manages to renegotiate every contract on the Pentagon’s books.

The fact is, with a major commitment already made to develop domestic infrastructure and planned tax cuts, the military is not going to get the massive boost it had hoped for from earlier briefings. More money yes, but in the scheme of a $600 billion defense budget it will not create a dramatic uptick in the purchase of military hardware…. at least not at the current levels promised.