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Why Defense Contractors Will Love The Ryan Budget
Wednesday, March 21, 2012 - 11:42am
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Most news accounts of the House Republican budget released by Rep. Paul Ryan (R-Wis.) yesterday focused on its no new taxes/shred the safety net backbone. Little attention was paid to its plan to shower the Defense Department with new spending.
 
The Ryan plan called for an immediate cancellation of the planned cuts in defense spending contained in the Obama administration’s proposed budget. Instead, House Republicans would increase Pentagon spending by about $20 billion next year to $554 billion.
 
In addition, the plan would exempt the military from the sequestration cuts slated to go into effect next January. The Pentagon’s share of those cuts is $55 billion. “This budget eliminates these additional cuts in the defense budget by replacing them with other spending reductions” in domestic discretionary spending, the updated “Path to Prosperity” said.
 
Republican frontrunner Mitt Romney, without actually endorsing the Ryan plan,  immediately lauded it as a “bold” approach to tackling the nation’s deficit, ignoring the fact that every major non- or bi-partisan group that has offered “bold” deficit reduction plans called for curbing the past decade’s splurge on defense. Romney’s own Pentagon proposal calls for an 8 percent increase in military spending, which, with the war in Iraq over and the war in Afghanistan winding down, would be the first time in American history that the U.S. increased its defense spending after a decade of war.
 
It’s too bad that Ryan offered his proposal on a day when Government Accountability Office officials testified on Capitol Hill on one of the biggest spending programs currently underway at the Pentagon: the 20-year program to replace every jet fighter owned by the Air Force, Navy and Marines. The testimony offered a sobering counterpoint to the idea that government waste can only be found in domestic discretionary spending, entitlements or social safety net programs.
 
The GAO said the $400 billion Joint Strike Fighter program, which will replace 2,457 aircraft, has in just the last 21 months increased in total costs by $15 billion and its full  production schedule has slipped by five years. In fact, if you go back to 2007 projections, the total costs for the Joint Strike Fighter program has increased by about $119 billion.
 
Why the delays and overruns? The program achieved just 6 of its 11 goals in 2011, and “more changes to aircraft design and manufacturing processes” are expected since fixes to the Marine variant (short takeoff and vertical landing) “are temporary and untested,” the report said. Management and development of 24 million lines of software are late, and only 4 percent of the system has been fully tested and verified. “Testing of a fully integrated JSF aircraft is now expected in 2015 at the earliest,” the GAO said.

Indeed, it would appear, based on GAO’s analysis, that the JSF is rapidly turning into the ultimate long-term make-work program for Lockheed Martin and its subcontractors, with production pushed farther and farther into the future. And even as it does, the amount spent each year increases. “As the program continues to experience cost growth and delays,” the GAO concluded, “projected annual funding needs are unprecedented, averaging more than $13 billion a year through 2035.”

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.