Sunday, September 25, 2011

Will Ties to Pentagon Contractors Push 'Supercommittee' Democrats to Cut Entitlements?

Will Ties to Pentagon Contractors Push 'Supercommittee' Democrats to Cut Entitlements?

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Arizona’s Republican Senator Jon Kyl wasted little time. A member of the bipartisan Congressional “supercommittee” charged with finding $1.5 trillion in deficit reductions, he did his best to forestall even discussion of cuts to the Pentagon’s budget. “When we had our first meeting the chairman asked, ‘Well what do we think about defense spending?’ and I said, ‘I’m off of the committee if we’re gonna talk about further defense spending,’” he told the audience at a recent forum sponsored by several conservative think tanks.

The Senate Minority Whip may be the most outspoken member of the Joint Select Committee on Deficit Reduction when it comes to the military budget, but the Democrats currently considering whether to cut the deficit via reductions in defense spending or programs like Medicare and Medicaid have received far more money from Pentagon contractors than Kyl or any of their Republican colleagues on the panel, according to an investigation by AlterNet, with assistance from the Brave New Foundation and Salon.com.

Since 2007, Democrats on the supercommittee have received more than $1 million in defense industry donations, while contributions to the Republicans added up to only $321,000. Panel co-chair Senator Patty Murray, for example, has received more defense industry dollars over that period than the combined total of the top four Republican recipients on the super committee. Even so, her haul from the Pentagon’s weapons-makers isn’t the largest by a panel Democrat, a distinction held by her colleague from South Carolina, James Clyburn.

An analysis of official government data paints a disturbing picture of big money, cozy relationships and potential influence that, alongside a concerted lobbying effort by the Pentagon and its powerful defense contractors, makes substantial reductions to the Department of Defense’s budget improbable and steeper cuts to entitlement programs, like Medicare and Medicaid, more likely.

Line in the Sand

A product of the legislation passed to raise the federal debt ceiling this summer, the supercommittee -- six members of the House and six from the Senate -- must come up with a plan to slash federal deficits by about $1.5 trillion over the next decade, and do so by November 23. If the panel fails or if its proposals are rejected by the full congress, it will trigger automatic spending cuts across the federal government -- a process called sequestration.

At the moment, before the panel makes any decisions, the Department of Defense faces a likely “cut” of around $350 billion in funds over the next decade under a plan proposed by the White House that became part of the debt ceiling agreement. However, Salon contributor Winslow Wheeler and others have pointed out, those cuts are reductions in future spending increases -- not actual budget cuts in any normal sense. And this is where the Pentagon has drawn a line in the sand, likely with an eye toward a slightly larger figure which it will “grudgingly” accept.

As part of the Pentagon’s lobbying effort to cap the cuts, former Secretary of Defense Robert Gates recently warned that anything more than a $400 billion reduction would have a “catastrophic effect” on national security. When Senator John McCain asked General Martin Dempsey, the incoming chairman of the Joint Chiefs of Staff about a possible $800 billion decrease over 10 years, Dempsey replied, “I haven’t been asked to look at that number. But I have looked and we are looking at $400 [billion]…Based on the difficulty in [achieving] the $400 billion cut, I believe achieving $800 billion would be extraordinarily difficult and very high risk.”

Not to be outdone, Defense Secretary Leon Panetta called $400 billion in cuts reasonable, but said a decrease of $600 billion, his estimate of the Pentagon’s additional loss in the event of sequestration, would lead to “dangerous cuts across the board -- defense cuts that I believe would do real damage to our security, our troops and their families, and our military’s ability to protect the nation.”

At the same time that the Pentagon has been waging this scare-offensive, top defense contractors have launched a lobbying campaign, dubbed “Second to None,” in an attempt to mobilize average Americans to pressure their representatives to reject cuts to defense spending. Using the twin specters of terrorism and the loss of manufacturing jobs, the campaign is far from subtle.

“American leadership in aerospace and defense is being threatened by forces in Congress and the administration," the group's Web site warns. "The security of our troops, our technological future and our economic stability are all at risk. We must preserve jobs across the nation that keep our nation strong. Join us and act now before it is too late."

These efforts may, however, be mere window dressing compared with the industry’s most effective (and least acknowledged) everyday lobbying efforts, which are much less transparent than either the current Pentagon and industry campaigns.

Spread the Wealth

For many years, top defense firms have divided work on weapons systems across multiple states in order to exert influence over Congress. The supercommittee is far from immune. As the Associated Press recently reported, the “six Republicans and six Democrats represent states where the biggest military contractors -- Lockheed Martin, General Dynamics, Raytheon Co. and Boeing Co. -- build missiles, aircraft, jet fighters and tanks while employing tens of thousands of workers.”

An AlterNet analysis of government contract data for the congressional districts of House members on the supercommittee bears this out. California Democrat Xavier Becerra, a senior member of the House Ways and Means Committee, has seen more than $19 million worth of work from Pentagon contracts awarded to his district since 2007. It’s been $53 million for the district of Jeb Hensarling, the Texas Republican who co-chairs the supercommittee. Dave Camp, the Republican from Michigan who heads the House Ways and Means Committee has seen $59 million worth of work from defense contractors in his district during that same period. For Michigan Republican Fred Upton, the chair of the House Energy and Commerce Committee, it’s been $156 million in defense contracts for his district over the same years.

The House’s third-ranking Democrat and a veteran of the powerful Appropriations Committee, James Clyburn, has seen almost $1.8 billion go to defense contractors like General Dynamics, ITT and BAE Systems, in his district. And for Maryland’s Chris Van Hollen, the top Democrat on the House Budget Committee, an astounding $8.8 billion in Pentagon contracts, including deals with defense giants Lockheed Martin, BAE Systems and General Dynamics, have gone to his district since 2007.

In the Senate, Democrats Patty Murray of Washington State, the super committee co-chair and a founding co-chair of the Senate Aerospace Caucus; John Kerry of Massachusetts, a former presidential candidate and current member of the Finance Committee; and Montana’s Max Baucus, who chairs the Finance Committee, all have defense interests in their states, although some are far more powerful than others. Since 2007, Montana has seen a modest $1.2 billion in defense contracting work. Not so for Washington State, which has reaped $26.5 billion in defense deals, while contracts in Massachusetts, to companies including Lockheed Martin, Raytheon, General Dynamics, BAE Systems, L-3 Communications and Textron, among many others, added up to an eye-popping $56.6 billion over the same years.

On the other side of the aisle, Ohio’s freshman Republican senator Rob Portman represents a state whose defense contracting take since 2007 was nearly $30 billion. In John Kyl’s Arizona, deals with massive weapons-makers like Lockheed, Raytheon, Boeing, General Dynamics, BAE Systems and Honeywell, to name a few, have pushed total Pentagon dollars spent there to $55 billion in those same years. While Pennsylvania, which elected supercommittee member Pat Toomey to the Senate last year, bested them all with $57 billion in deals for defense work, including major Defense Department contracts with Lockheed Martin, Boeing, General Dynamics and Northrop Grumman, since 2007.

The money, however, doesn’t just flow one way. While corporations can’t directly donate funds to candidates, their political action committees, officials, and representatives (as well as immediate family members of the latter) do. According to data compiled by the Center for Responsive Politics, all members of the Joint Select Committee on Deficit Reduction have received significant contributions from the defense sector since 2007.

But during the 2010 election cycle, half of the Republicans panel -- John Kyl, Pat Toomey and Rob Portman -- received no donations from either of the two largest defense contractors, Lockheed Martin and Boeing. (These firms reaped approximately $28 billion and $18 billion in contracts, respectively, from the Pentagon that year.) Of the six Democrats on the supercommittee, only Kerry received no contributions from one of the two defense giants

No member of the supercommittee, and no lawmaker in all of Washington, D.C., received more donations from Boeing than co-chair Patty Murray. Of the $3.2 million the missile-maker dispersed to lawmakers in 2009-2010, the Washington Democrat received $85,860. That sum was $20,000 more than was donated to the next two largest congressional recipients of Boeing money combined, according to data from the Sunlight Foundation.

An analysis by AlterNet further found that more than one-third of Murray’s top 100 donors during the 2010 cycle were defense contractors that collectively signed $57.5 billion worth of deals with the Pentagon last year.

Just last week, the Aerospace Industries Association, the coalition of more than 300 defense and aerospace firms behind the Second to None campaign, presented Murray with its Wings of Liberty award “in recognition of her longtime support of the aerospace and defense industry,” according to the press release. “Senator Murray knows the value of the aerospace and defense industry,” said Jim Albaugh, Boeing’s executive vice president and the chairman of AIA’s Board of Governors, marking the occasion.

“Value” is the operative word.

Since 2007, Murray’s haul in defense industry donations is greater than the combined total of the top four Republican recipients (Camp, Portman, Upton and Hensarling) on the supercommittee. Yet even she doesn’t top House veteran James Clyburn. Over that same period, the South Carolina Democrat received more than $311,000 in defense industry donations, including $141,000 during the 2010 election cycle. AlterNet also found that 13 of Clyburn’s top 20 donors during the 2010 election cycle were defense contractors who were collectively awarded more than $23 billion in contracts from the Pentagon in 2010.

No Gloom, No Doom

According to Winslow Wheeler, who worked on national security issues on Capitol Hill for 31 years, the popularly cited “doomsday” cuts of around $850 billion to military budgets mentioned in regard to sequestration are likely underestimates. In reality, the mandatory reductions would probably wipe out close to $1 trillion in projected Pentagon spending over the next 10 years. This would be far from catastrophic, according to Wheeler. Citing analysis by Todd Harrison of the Center for Strategic and Budgetary Assessments, Wheeler wrote last month at the Huffington Post:

... The "doomsday mechanism" would reduce the Pentagon's "base" (non-war) budget to about $472 billion, the approximate level of the base [Department of Defense] budget in 2007. I do not recall anyone declaring our national security being "imperiled" at that spending level in 2007. In fact, that level of spending for the "base" (non-war) Pentagon budget was a sixteen year high…

Both Harrison’s and Wheeler’s analyses suggest that industry warnings about defense plants being shuttered are more scare tactic than reality. In addition to continued high levels of U.S. defense spending even in event of sequestration, the Pentagon has, for the last year, also taken substantive countermeasures to shield its key contractors from future financial peril, including trips to Wall Street to lobby investors to bolster weapons-makers and brokering deals with Persian Gulf states to keep assembly lines active and coffers full.

Wheeler, however, believes there is no realistic chance of any substantive cuts even if the deficit panel flops and sequestration ensues. In his Salon piece, the Pentagon budget expert wrote, “The supercommittee is bound to fail…when the committee fails, the defense cuts envisioned by the supposedly automatic trigger mechanism will not occur. That will be for the simple reason that almost no one wants that to happen.”

There’s good reason to believe Wheeler. In an economic and electoral environment in which creating and preserving jobs dominates the political discourse, big defense firms have the power to punish elected representatives by moving existing jobs to, or locating future projects in, states where lawmakers are willing to more readily play ball with them. Given that, is Patty Murray ready to risk the jobs of 30,000 Boeing workers building refueling aircraft for the Air Force in Everett, Washington? Will Texas’s Jeb Hensarling look past the 1,100 Textron workers in Amarillo working on the V-22 Osprey tilt-rotor aircraft? Will Rob Portman be willing to go back on hispromise to “fight to support Ohio jobs that are integral to our national security,” specifically those at the General Dynamics tank-manufacturing plant in Lima, Ohio and the General Electric aircraft engine factory in the Cincinnati suburb of Evendale?

Which Side Are You On?

There’s little reason to believe that Jon Kyl will need to make good on his threat to walk out on the Joint Select Committee on Deficit Reduction. While he may be the most vocal member when it comes to protecting the Pentagon budget, he sits across the aisle from panel members with markedly deeper ties and tighter financial bonds to the defense industry.

This year, the National Labor Relations Board, an independent government agency established to protect workers’ rights, filed a complaint alleging Boeing violated labor law by opening a new $750 million manufacturing plant for commercial airliners in James Clyburn’s South Carolina in order to punish Boeing workers in Patty Murray’s Washington State for repeated strikes. In the immediate wake of Boeing decision to set up shop in South Carolina, a spokesperson for Murray said , “She won't be as inclined to work for anything not Washington state-related for this company,” but the Boeing-funded senator has thus far refused to even weigh in on the NLRB ruling. The Boeing-supported Clyburn, for his part, contends the weapons-maker has done nothing wrong.

After a meeting earlier this year with Boeing’s chief executive officer, Jim McNerney, Clyburn defended the defense giant’s decision to relocate its operations to South Carolina, but hedged his bets. "I am pro-business. I am pro-union. I am not anti-business. I am not anti-union," he said.

A real reining-in of defense spending by the supercommittee would mean markedly more than $1 trillion in cuts over the next 10 years. Even the supposed “doom” of sequestration would still leave the industry sitting as pretty as it was in a boom year like 2007. The likelihood of either coming to pass is, however, astonishingly slim. With deep pockets, easy access to lawmakers and the power of manufacturing jobs as an ace in the hole, defense contractors are well-position to fend off even modest reductions to future Pentagon budget increases.

In regard to Boeing’s move east and the fight between the weapons-maker and union workers, Clyburn wanted to have it both ways. He won’t have that luxury this fall, even if both the Joint Select Committee on Deficit Reduction’s recommendations and sequestration ultimately fail. Before Thanksgiving, Clyburn and his supercommittee colleagues will be forced to make a clear decision for cuts to programs like Medicare and Medicaid or the type of budgets that have resulted in nearly $8 trillion in national security spending since 2001.

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