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Defense Industry Focused on Sequestration

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A U.S. Air Force B-2 Spirit stealth bomber refuels from a KC-10 Extender aircraft over Australia.(AP Photo/Department of Defense, Shane A. Cuomo)

No one has been able to successfully wrangle Congress into reaching a grand bargain to reduce the deficit. But it’s not for lack of trying.

Ever since the Budget Control Act was signed in 2011, the genesis of the deep spending cuts associated with sequestration, Washington’s powerful defense lobby has been working to change it.

 

The Aerospace Industries Association, the trade group representing major aerospace and defense manufacturers, launched a widespread lobbying effort to raise awareness about the national-security dangers of the $1.2 trillion in spending cuts—roughly half from defense—that started to take effect this year and are expected to continue over the next decade if Congress fails to otherwise reduce the deficit.

The association handed out ticking clocks for defense-watchers to pin to their lapels, counting down the days, hours, minutes, and seconds until sequestration hit. It commissioned economic reports that found roughly 2 million American jobs would be lost to the cuts. And its state-by-state breakdown of anticipated job losses gained a lot of attention during election season last year.

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The coalition—along with its many defense-contractor members—also worked the Hill, talking to leadership, members, and staff. Even though sequestration did, ultimately, take effect this year, the association called its effort moderately successful. “When [the Budget Control Act] originally passed, you didn’t see a lot of attention on the jobs or impact on national security,” says Cord Sterling, vice president for legislative affairs. There’s now a “growing chorus of voices” on the Hill about those negative effects, he said. “The only thing they haven’t done is reach a solution on how they mitigate that.”

The recent budget battles have added another layer to the already complicated relationship between defense contractors, the Pentagon, and Congress. Major companies create complex defense programs for the Pentagon, often hiring a web of other companies across dozens of states—and congressional districts—to make components for the product. The Pentagon buys the products with money that Congress authorizes and appropriates. Hence a slew of lobbyists from defense firms are constantly swarming the Hill to argue the merits of their individual programs and to answer questions about affordability and performance.

“This is the only industry that I’m aware of that has a customer that has to go somewhere else to secure the funding for whatever that customer wants to buy,” says Randy Belote, Northrop Grumman’s vice president of strategic communications. Because of this process, Belote adds, “there’s always a dynamic tension between the appropriators and the customers and, of course, then the supplier.” This is because the Hill and the Pentagon have different missions. “Congress is looking out for the American taxpayer, making sure the money that’s spent is spent properly,” Belote says. “Then on the military side, they have another set of requirements, and they don’t necessarily align.”

This leaves companies on call for lawmakers and staff throughout the lengthy budget process, which generally starts when the president submits his budget request to Congress and ends when he signs the resulting product after it passes both chambers many months later. (This year, President Obama introduced his budget late, after the House and Senate had passed their spending plans, and there has yet to be an effort to reconcile them into a single budget.)

 

When the House Armed Services Committee marked up its half-trillion-dollar bill earlier this month, industry too moved into high gear, with companies like BAE Systems scrambling to make their points. “We’re always trying to provide information to Congress so they better understand what BAE does, what services we can provide to our customer, which is the DOD,” says Frank Ruggiero, BAE’s senior vice president for government relations. “And certainly during the markup period ... they have lots of questions, and we try to provide for them the answers.”

But broader questions about the industry, Ruggiero says, are often left to the Aerospace Industries Association, which, as a trade group, does not lobby for specific programs. The coalition instead deals with House Armed Services and other relevant committees on big-picture issues, including acquisitions policy, export-control reform, and depot-maintenance protocols. One such proposal that was worrying to the association was a push from the Pentagon last year to allow government auditors access to companies’ internal audits, Sterling says, sparking concerns “about the degree to which the industry will self-police itself with another party [demanding] the results of it.”

Of course, the industry also funds campaigns, spending more than $27 million in the last election cycle, according to the Center for Responsive Politics. Almost two-thirds went to Republicans.

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Infographic

Northrop Grumman and Lockheed Martin led the contributors’ list, each giving more than $3 million, although Boeing, Raytheon, General Dynamics, United Technologies, and BAE were all well represented. Top recipients in the last cycle were presidential nominees Mitt Romney and Barack Obama, but House Armed Services Chairman Buck McKeon was third with more than $566,000 in contributions from the defense industry, according to the center. Indeed, 11 of the 20 House members who received the most contributions from defense companies are either on the committee or were before losing their reelection bid.

This article appears in the June 14, 2013 edition of NJ Daily as Defense Industry Focused On Sequestration.

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