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Sen. Bernie Sanders, I-Vt., says he will use his powerful new position atop the U.S. 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 letters also signed by Iowa’s Sen. Chuck Grassley and obtained by the Post, Sanders’s office asked executives from the top three defense contractors — Raytheon Technologies, the parent company of Cedar Rapids’ largest employer, Collins Aerospace, as well as Lockheed Martin and Boeing — 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.
“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,” Sanders said.
In an 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. 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.”
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.
Further development of hypersonics was one of the reasons cited for the 2020 merger of United Technologies Corp. and Raytheon Co.
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.
Raytheon and Boeing face a very different financial reality. Both companies have substantial footholds in the commercial aerospace market, which still is recovering from a coronavirus-inflicted slowdown in air travel.
For them, defense contracts are a buffer against steep job losses in their commercial divisions.