Trump’s bumped-up Pentagon budget means a gold rush for defense contractors

More guns and less butter is great news, if you’re a middle-man for military hardware.

CREDIT: AP Photo/Andrew Harnik
CREDIT: AP Photo/Andrew Harnik

President Trump’s first budget erases scores of domestic spending programs and inflicts steep cuts on most others, dramatically accelerating a years-long downward trend in how much America invests in its own people.

The administration justifies canceling programs that heat very poor people’s homes through the winter and ensure people don’t go hungry by saying they haven’t delivered strong enough results to justify their relatively low cost. But while Trump’s plan slashes the “butter” portion of federal spending, it throws a large new pile of money at the “guns” part.

Trump’s proposed 9 percent increase in baseline Defense spending doesn’t rank with the largest one-year jumps in Pentagon funding. President Reagan threw double-digit budget hikes at the agency more than once, for example. But Trump’s $54 billion increase sits, in percentage terms, on par with President George W. Bush’s “global war on terror” budgets from the early 2000s.

Bush’s decision to open the floodgates following the September 11th attacks ended up getting taxpayers fleeced by a long list of unscrupulous war profiteers. A mix of long-time defense hardware manufacturers and dilettante opportunists pored over procurement lists published by the Pentagon to identify things Washington needed but didn’t necessarily want to get factory-direct. Buy low on a few thousand sidearms destined for Afghanistan’s new national police force, sell high to the DOD, and go home rich.


Today, Trump is counting on Office of Management and Budget director Mick Mulvaney to prevent his big military budget from becoming cash carrion for the next generation of vultures.

Mulvaney cut his teeth as a spending hawk particularly wary of Pentagon numbers, as the Huffington Post’s Zach Carter notes, but is now caping for a budget that dumps lots more money into some of the very programs he built a reputation criticizing.

“To maintain his credibility and demonstrate that Trump’s new ‘hard power’ defense priorities weren’t just an excuse to throw money away, Mulvaney needed to sniff out wasteful endeavors,” Carter writes. “He appears to have missed at least one.”

The example in question, highlighted in a letter to Defense Secretary James Mattis from Rep. Ro Khanna (D-CA) last week, is a company called TransDigm Group.


The word “company” implies an organization that creates things of value that would not otherwise exist and finds a way to sell them for more than they cost to produce. TransDigm is the other kind of company — the kind that looted Bush’s war budgets for tens of millions in profits before most Americans had ever heard the name “Barack Obama.”

TransDigm doesn’t manufacture parts that the Pentagon needs for drones, ships, weapons, or ground vehicles. It finds companies that do, buys them out, and then radically hikes the sales price of parts the Pentagon can’t get elsewhere. Khanna flagged examples where a part that used to cost DOD less than $700 suddenly got marked up to $5,474 a pop. TransDigm gets 80 percent of its revenue from firms where it holds a monopoly over military hardware components, according to Carter’s report.

Khanna’s letter will probably trigger an Inspector General’s investigation, a tweak to an appropriations rule, or a plain-old name-and-shame campaign to change TransDigm’s business model. But even if Mulvaney or Trump can rid the Pentagon of this particular parasite, they’ll still be throwing gobs of money at an industry full of bad actors.

Defense contractors are notorious for their predatory relationship with taxpayer money — even the big guys who actually do make the things they sell, unlike TransDigm’s weird little empire. Boeing, for example, got caught marking up spare helicopter parts by 177,000 percent back in 2011. Many others have committed wage theft against their workers, violated workplace safety laws, or been caught engaging in fraud — and continued winning lucrative Pentagon deals anyway.

As the defense industry salivates over Trump’s generosity, the mood is grimmer for the tens of millions of Americans who rely on the domestic programs Mulvaney and his boss say aren’t worth the trouble anymore.