Of All The Battles Ahead for President Obama, Taking on Defense Contracting May Be His Toughest
WASHINGTON, March 31 – /EIN News/ “Taking on influential defense contractors will be tough.” —President Barack Obama, March 24 prime time TV news conference.
“Tough” hardly describes the battle that lies in wait for the President when he tries to make meaningful changes in defense contracting.
More than 90% of the revenue generated by Lockheed Martin and Raytheon in 2008 came from defense contracts. For Northrop and General Dynamics, defense contracts accounted for more than 70%. Even Boeing, which dominates civilian aviation, depends on military work for half its revenue.
When the President talks about reforming defense spending, these are the goliaths he’s taking on.
The entire defense contracting system is shot through with waste and abuse. Last year the GAO reported that 95 defense projects had overrun their budgets by $295 billion. The average delivery delay was nearly two years beyond what the contractor promised. The GAO periodically tries to audit the Defense Department, but always comes to the same conclusion: the department’s books are such a mess that audits are impossible. We’re talking about an agency that last year spent more than 20% of the entire federal budget.
This should be a ripe target for White House and Congressional cost cutters. Should be. But isn’t. Why?
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