Storm clouds await Pentagon’s request for defense industry cash injection

By: Joe Gould

WASHINGTON ― Though the Pentagon is hunting for billions of dollars in a future package to combat the coronavirus pandemic, it looks like the next massive relief bill will be swamped in a partisan fight.

The Pentagon announced it's seeking the funds to prop up the military's network of suppliers following $3 billion in new “progress payments" to increase cash flow to primary contractors and more vulnerable, smaller subcontractors. The details have yet to be disclosed as the Defense Department works through them with the White House budget office.

But last week, Senate Majority Leader Mitch McConnell, R-Ky., said he wants to “push the pause button” on the next aid package and, because Democrats aim to center it on bailouts for states hit hard by the pandemic, “move “cautiously.”

“You've seen the talk from both sides about acting, but my goal from the beginning of this, given the extraordinary numbers that we're racking up to the national debt, is that we need to be as cautious as we can be,” McConnell told reporters on April 21.

The Senate will reconvene in full on May 4 to work on coronavirus aid legislation, McConnell said Monday. It would mark the first time the chamber has been back in full since late March.

The prospects for a speedy compromise looked dim when House Speaker Nancy Pelosi, D-Calif., set herself at odds with McConnell last week, saying, “There will not be a bill without state and local” aid. Senate Minority Leader Chuck Schumer, D-N.Y., and other congressional Democrats have added pressure on McConnell by pillorying the majority leader's suggestion that states declare bankruptcy.

“Republican Senators: Raise your hand if you think your state should go bankrupt,” Schumer said in a tweet.

McConnell's negotiating stance comes as the Congressional Budget Office projected Friday that the federal budget deficit would quadruple to $3.7 trillion, driven by the coronavirus pandemic and a government spending spree on testing, health care, and aid to businesses and households.

According to the report, the 2020 budget deficit will explode after Congress passed and President Donald Trump signed four coronavirus aid bills that promise to pile more than $2 trillion onto the $24.6 trillion national debt in the remaining six months of the current fiscal year.

Meanwhile, defense hawks are warm to a defense spending boost. Senate Commerce Committee Chairman Roger Wicker, R-Miss., has voiced support for an additional cash infusion for the defense industry.

“The federal government can play a vital role in keeping military suppliers afloat,” Wicker, a senior member of the Senate Armed Services Committee, said in his weekly newsletter to supporters. “Already the Department of Defense has announced it is spending $3 billion to reimburse contractors affected by work delays and breaks in the supply chain.

“As Congress considers new relief measures, I will work to include targeted funding to ensure that suppliers get the stable cash flow and contracts they need to endure this crisis. These awards should go toward projects the military has already identified as priorities and should not break the bank."

Also last week, Sen. Tom Cotton, R-Ark., introduced legislation last week that calls for $43 billion for military infrastructure and weapons as part of a larger effort to confront China in the Indo-Pacific region. That bill also calls for $11 billion to mitigate pandemic-related cost overruns on weapons programs and $3.3 billion to mitigate COVID-19 impacts to the defense-industrial base.

But Cotton's proposal is also loaded with new weapons purchases that would prove a boon to defense firms, albeit at a slower pace than a direct cash infusion. There's an added General Dynamics/Huntington Ingalls Industries-built Virginia-class submarine; more Lockheed Martin-built F-35A jets; Boeing-built F-15EX fighter aircraft; a battery for the Terminal High Altitude Area Defense air defense system; and anti-ship/strike weapons.

Cotton's bill follows a $6.1 billion China deterrence package from the influential ranking member of the House Armed Services Committee, Rep. Mac Thornberry, R-Texas. That bill would fund an Indo-Pacific Deterrence Initiative, also favored in principal by HASC Chairman Adam Smith, D-Wash.

Observers predicted the added funding might find a way through any deadlock on a stimulus bill.

“We don't foresee stand-alone adoption but do think elements of it could be spread across different spending bills,” analyst Roman Schweizer of the Cowen Group said of Cotton's bill in a note to investors. “With Congress in full-bore debt-spending mode, defense proponents might be able to bury this money in larger packages.

The American Enterprise Institute's Mackenzie Eaglen proposed in a Defense News on Monday that the next package for the Pentagon should avoid submitting unfunded procurement priorities and also “focus on the health, safety and continuity of all the Pentagon's workforce.”

“Democrats want another stimulus, ideally on ‘shovel ready' infrastructure jobs. DoD is absolutely going to need more help in some sort of bill to keep the defense supply chain from going to the unemployed lines, or worse, gobbled up by China,” Eaglen said in an email.

“Most of defense stimulus is to prop up jobs and employment so I'd like to be optimistic and think Democrats would be very supportive.”

Democratic leaders haven't yet signaled how they're predisposed toward added defense spending in a stimulus package. However, a House Democratic aide said that scenario would invite serious opposition from the progressive wing.

Rep. Ro Khanna, D-Calif., a member of HASC and the House Progressive Caucus leadership team, previewed the messaging in this fight in a tweet on April 21 saying: “The Pentagon shouldn't get any more COVID relief money."

“A single F-35 could pay for 2,200 ventilators. 1 nuclear warhead could pay for 17 million masks,” Khanna said, adding that the Pentagon budget dwarfs the combined budgets of the Centers for Disease Control and Prevention, the National Institutes of Health, and U.S. contributions to the World Health Organization.

In the Senate, Sen. Bernie Sanders, I-Vt., “will strongly oppose no-strings-attached giveaways to the arms industry, as news reports seem to indicate are the Pentagon's likely request of Congress," said his spokesman, Keane Bhatt. "This is the time to put ordinary workers and small businesses first — not prioritize the profits of Lockheed Martin and Raytheon.”

https://www.defensenews.com/congress/2020/04/27/storm-clouds-await-pentagons-request-for-defense-industry-cash/