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Sen. Bernie Sanders blasts defense contractors over soaring costs, vows tougher oversight

By AARON GREGG | The Washington Post | Published: May 12, 2021

Sen. Bernie Sanders, I-Vt., a former Democratic presidential candidate, says he will use his powerful new position atop the Senate Budget Committee to exercise tougher oversight over the United States' vast national security establishment, including the private-sector organizations that profit from taxpayer-funded defense contracts.

In an exclusive interview with The Washington Post ahead of a Wednesday budget hearing, Sanders criticized the Pentagon for failing to keep track of billions of dollars in taxpayer funds. Citing former president Dwight D. Eisenhower's warnings about the military industrial complex, he excoriated defense agencies and weapons manufacturers over hundreds of billions of dollars in cost overruns on programs, including the F-35 Joint Strike Fighter. And he said large defense conglomerates, as taxpayer-funded entities, should face the same standard of accountability and transparency as their government counterparts.

"We have a very powerful military industrial complex, and I don't think they get the scrutiny that they deserve, and I think it's appropriate to start there," Sanders said.

He added that the chief executives of the major defense contractors earn close to 100 times more than the secretary of defense "despite the fact that in the case of Lockheed Martin and others, the lion's share of their revenue comes from the federal government."

"In many ways, something like Lockheed Martin really is a federal agency," he said.

In letters signed jointly with Sen. Charles Grassley, R-Iowa, and obtained by The Post, Sanders' office asked executives from the top three defense contractors ―Lockheed Martin, Boeing and Raytheon Technologies ―to attend a Wednesday budget hearing focused on waste, fraud and abuse in the defense sector. All three companies declined to make their executives available. They also declined to comment for this article.

Of their decision not to attend the hearing, Sanders said: "They are not often asked hard questions, and they would choose not to be transparent, not to have to face the senators who want to ask them hard questions."

He later said he thought defense contractors should be subject to Freedom of Information Act requests from journalists and members of the public, something that was proposed in 2019 by Sen. Elizabeth Warren, D-Mass.

Industry representatives and conservative national security experts told The Post it is entirely appropriate for Sanders to exercise oversight over defense spending. However, they argued that the Democratic Party on the whole does not support the deep spending cuts Sanders has pushed for in the past.

The first budget proposal to emerge from the Biden White House kept defense spending essentially flat while increasing funds for education and health care. Biden has also proposed a massive infrastructure revitalization plan and wants to fund it with increased corporate taxes.

Tim McClees, vice president of legislative affairs at the Aerospace Industry Association, argued that both parties are in agreement over the need for a well-funded military that can counter new threats to U.S. national security. Over the past five years the Pentagon made new investments to outpace a fast-modernizing Chinese military, and to outstrip Russian hypersonic missile development.

"New missions for our troops, new threats to our security, and new challenges to the DIB [defense-industrial base] and our shared supply chain are real and persistent," McClees said in a statement. "Congress plays a vital role in working with DoD and industry to understand these threats and in ensuring the warfighter can continue to defend our country. It's encouraging to see ongoing bipartisan support for strong, sustained, and stable defense spending."

Throughout the past year, taxpayer-funded military business has provided a sort of financial oasis for leading aerospace manufacturers.

As of last year, about three-quarters of Lockheed's revenue came from U.S. taxpayers, either through contracts it holds directly with the U.S. government or through subcontracting arrangements with other contractors, according to the company's 2020 annual report. The rest comes primarily from weapons deals with foreign governments, a tightly regulated line of business that has soared in recent years as more foreign militaries purchased F-35 fighter jets.

Although the F-35 has been criticized in recent months by powerful congressional Democrats ― House Armed Services Committee chair Adam B. Smith, D-Calif., called it a "rathole" ― the program's manufacturing base supports more than 250,000 jobs across 45 states, giving it a deep well of parochial support throughout the House and Senate. Sanders's home state of Vermont, for example, is home to four F-35 supplier locations which directly or indirectly support roughly 1,660 jobs, according to estimates published by Lockheed Martin.

The recent economic crisis has done little to dampen Lockheed's fortunes. The company saw soaring profits and revenue last year even as coronavirus-inflicted closures decimated other industries. Last year it posted record sales of $64.5 billion, representing a 9 percent increase over 2019.

Boeing and Raytheon face a very different financial reality. Both companies have substantial footholds in the commercial aerospace market, which is still recovering from a coronavirus-inflicted slowdown in air travel. For them, defense contracts are a buffer against steep job losses in their commercial divisions.

But Sanders has pointed to the soaring salaries of chief executives at leading defense firms and posited that defense spending levels far surpass what the United States needs to defend itself. The U.S. defense budget is larger than that of the next 12 nations combined, he argued.

"I helped lead the effort recently to cut military spending, and I think we can do that and retain by far the strongest military in the world," Sanders said. "But the Pentagon cannot be given a license to waste many, many billions of dollars ... they need to be run in a cost-effective way, in a transparent way, and I sense that is certainly not the case right now."

Citing data compiled by the Government Accountability Office, Sanders and Grassley said the Pentagon has over $1.8 trillion worth of weapons systems under development and claimed that roughly $628 billion of that is the result of cost growth above original estimates. They said the delivery of initial capabilities for major weapons systems is, on average, two years behind schedule, also citing the GAO data.

"I want to see a much, much tougher approach to cost overruns," Sanders said.

Depending on how he wields his position as chair of the Senate Budget Committee, Sanders's broadsides against the defense establishment could add a new wrinkle to the congressional calculus on defense spending. Budgets are typically negotiated primarily between the White House and congressional leaders. But Sanders's position gives him a powerful megaphone he could use to rally support for spending cuts.

In a recent interview, he bemoaned the lack of serious debate in Congress on the subject of defense budgets.

"If you check the record over the last couple of years, very rarely is there a debate over the size of the [defense] budget," Sanders said. "At a time of enormous social need in America, when so many people are uninsured or underinsured, where we have over a half a million people who are homeless, where we have young people leaving school deeply in debt, I think we have to prioritize our spending."

Roger Zakheim, Washington director of the Ronald Reagan Presidential Foundation, said the 10% spending cut Sanders has proposed in the past would have a debilitating effect on America's global standing. He said Sanders' past proposals would reduce the U.S. military to "a regional force at best," citing research his organization conducted in partnership with the Center for Strategic and Budgetary Assessments.

"The economic prosperity and the peace that we have enjoyed for decades now has come from the U.S. military being a guarantor for international commerce, trade and peace," Zakheim said. "When we looked at what a 10 percent cut would do, it's just pretty amazing how quickly that requires the Pentagon to constrain the size, reach and modernization of the military."

Aside from closer attention to cost overruns, Sanders also said he would press the Defense Department on its failure to track its own funding. The Pentagon completed its first full audit in 2018. It failed the audit, with only a handful of agencies receiving a passing grade. Indeed, a primary finding of the audit was that the department lacks a comprehensive accounting system that can monitor government funds or keep track of the defense assets that are under private ownership.