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The economic boone of 9/11

9/11 gave our administration a winning lottery ticket in Arms Sales......
**Post-9/11 Economic Windfalls for Arms Manufacturers
By Michelle Ciarrocca, Arms Trade Resource Center

Despite a slowing economy and Bush's $1.35 trillion tax cut, notions of fiscal conservatism have been brushed aside to fund the fight against terrorism. Boeing Vice Chairman Harry Stonecipher got to the heart of the matter when he told The Wall Street Journal that "the purse is now open," so the Pentagon will no longer have to make "hard choices" among competing weapons projects. Unfortunately, no hard choices were being made in the first place. The highly anticipated Quadrennial Defense Review (QDR), an assessment of the nation's defense needs mandated by Congress, was released September 30, 2001. But as Senate Armed Services Committee Chairman Carl Levin (D-MI) quickly noted, the QDR "seems to me to be full of decisions deferred." None of the weapons systems mentioned as a candidate for elimination during the Bush campaign was canceled. Instead, Defense Secretary Rumsfeld set the stage for major increases in military spending, arguing that "the loss of life and damage to our economy from the attack of September 11, 2001, should give us a new perspective on the question of what this country can afford for its defense."

Defense spending for FY 2002 totaled $343.2 billion, a $32.6 billion increase above 2001 levels. Congress is currently debating President Bush's $396 billion FY 2003 military budget request, a $52.8 billion increase. Long-term plans envision the national defense budget increasing to $469 billion in FY 2007, 11% higher than the cold war average.

The failure of policymakers and defense officials to cancel unnecessary weapons programs is, in large part, due to the undue influence exerted by the top defense contractors. More than any administration in history, the Bush team has relied on the expertise of former weapons contractors to outline U.S. defense needs. Thirty-two major Bush appointees are former executives, consultants, or major shareholders of top weapons contractors. Seventeen administration appointees had ties to major defense contractors Lockheed Martin, Northrop Grumman, or Raytheon prior to joining the Bush team. These include former Lockheed Chief Operating Officer Peter B. Teets, now undersecretary of the Air Force and director of the National Reconnaissance Office; Secretary of the Air Force James Roche, a former Northrop Grumman vice president; and Secretary of the Navy Gordon England, a former General Dynamics vice president. The theory behind Rumsfeld's reliance on former corporate executives is that they would be more willing to cut costs and try new approaches than the average Pentagon bureaucrat. However, that clearly has not been the case.

The geopolitical reach of the defense megafirms is reinforced by millions of dollars in campaign cash. In 2000 the top six military companies spent over $6.5 million in contributions to candidates and political parties. In addition to these hefty campaign donations, defense contractors spent an astonishing $60 million on lobbying in 2000, the most recent year for which full statistics are available.

(Michelle Ciarrocca < CiarrM01@newschool.edu> is an analyst with the Arms Trade Resource Center who writes for Foreign Policy In Focus (online at www.fpif.org).)