Of All The Battles Ahead for President Obama, Taking On Defense Contracting May Be His Toughest (Joe Rothstein's Commentary)

March 29, 2009

By Joe Rothstein
Editor, EINNEWS.COM

“Taking on influential defense contractors will be tough.” ---President Barack Obama, March 24 prime time TV news conference.

“Tough” hardly describes the battle that lies in wait for the President when he tries to make meaningful changes in defense contracting.

More than 90% of the revenue generated by Lockheed Martin and Raytheon in 2008 came from defense contracts. For Northrop and General Dynamics, defense contracts accounted for more than 70%. Even Boeing, which dominates civilian aviation, depends on military work for half its revenue.

When the President talks about reforming defense spending, these are the goliaths he's taking on.

The entire defense contracting system is shot through with waste and abuse. Last year the GAO reported that 95 defense projects had overrun their budgets by $295 billion. The average delivery delay was nearly two years beyond what the contractor promised. The GAO periodically tries to audit the Defense Department, but always comes to the same conclusion: the department's books are such a mess that audits are impossible. We're talking about an agency that last year spent more than 20% of the entire federal budget.

This should be a ripe target for White House and Congressional cost cutters. Should be. But isn't. Why?

Because defense contractors are adept at creating alternative political universes. Lockheed, for example, has subcontracted parts for the F-22 fighter plane to 1,150 firms in 46 states. Each one of those firms and the people in Congress who represent them is a lobbyist for building more F-22s.

Last year, Defense Secretary Robert Gates decided to halt the plane's production. But that decision hasn't yet stuck. Working through its constituent congressmen and senators, and the communities, business and labor groups that would lose money and jobs, Lockheed is waging a furious campaign to build more F-22s.

Despite Gates' announced intention, Air Force brass, most of whom are former fighter pilots, are also fighting hard to keep building the plane. I was at an event recently where this subject came up. One of the Pentagon's most influential generals said he expected funding for the F-22 to continue. For one thing, he said, they're so much fun to fly.

We're talking here about a plane that so far has cost taxpayers more than $65 billion and has seen no service in Iraq, Afghanistan, or any other combat. The F-22 was conceived about 30 years ago as a next generation fighter to compete with improved Russian Migs, which planners then assumed would be built as part of the continuing cold war. Then the cold war ended and the Russians cut back on military development. But the F-22 had its own momentum---and still does.

Now the argument is that the Russians and Chinese are getting more aggressive about building advanced fighter aircraft. That argument would carry a lot more weight if the U.S., on a separate track were not about to launch its brand new Joint Strike Fighter (at a cost considerably less than the F-22). Furthermore, the U.S. already has a very versatile fighter bomber in the F18----which recently has been upgraded to make it more stealthy.

The battle to end the F-22 is just one of many high visibility fights going on inside the Pentagon and congressional committees. The Navy has a new destroyer that appears to be hugely more expensive and less versatile than planned. It should be a good candidate for the chopping block. In fact, the Navy itself tried to end its production months ago, but members of Congress from ship building states kept the program alive.

One little known consequence of the end of the cold war was the elimination of thousands of jobs in the Pentagon that oversaw military construction contracts. Increasingly, contractors are asked to monitor their own projects as “lead integrators” who subcontract work to others and essentially perform the dual---and incompatible--- jobs of customer and contractor.

Before the Iraq war began, Halliburton was given a no-bid contract to determine what contracts would be needed to support the troops. Then Halliburton, which wrote the specs, got the bulk of the contracts.

The U.S. spends more on national defense than the rest of the world combined. With its NATO and other allies that percentage climbs to nearly three-fourths of all the spending for planes, guns, ships and other implements of war.

The military-industrial complex has become an international behemoth, alternately tempting policy makers with shiny new “toys” and scaring the daylights out of them with ominous forecasts of defense gaps now and in the future.

Eugene Jarecki sums up much of this in his new book, The American Way of War: Guided Missiles, Misguided Men, and a Republic in Peril. Jarecki is best known for his documentary film, “Why We Fight,” which features John McCain taking on the battle against military contracting. The film is a popular Internet fixture.

From George Washington to Dwight Eisenhower, former generals who served as President have warned against the U.S. becoming a militarist state. Eisenhower had a clear-eyed view of what was likely to happen in the U.S. as it became the dominant military force in the world:

“This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

When President Obama says that taking on this culture will be “tough,” he's setting a task for himself that no president in the post World War II era has been able to accomplish. The hundreds of billions of dollars involved certainly are motivation enough for him to try. But even more important may be the fight against the continuing rush to build increasingly efficient weapons of destruction----and doing it under the banner of economic development.

(Joe Rothstein can be contacted at joe@einnews.com).