Defense firms push for big increases in procurement spending

One month ago, on the morning of Sept. 11, a small group of House members gathered privately in the cramped hearing room of the Defense Appropriations Subcommittee to approve yet another paltry increase in military spending. The funding bill included several of the priorities backed by President Bush during the 2000 campaign--but for the most part, the bill would have extended the eight-year "procurement holiday" derided by the nation's defense contractors.

Then an airplane slammed into the Pentagon.

Now the military-industrial complex, reinforced by corps of experienced lobbyists, aims to boost defense spending by as much as $100 billion over the next several years. And they are already on target: Sources say the House Defense Appropriations subpanel is working to produce a funding bill that spends as much as $350 billion on defense next year, up from about $300 billion last year.

Congress handed the Defense Department an additional $20 billion the week after the attack, to defend the country and power an international assault on terrorism.

"The whole mind set of military spending changed on Sept. 11," said Loren Thompson, a defense analyst with the Lexington Institute. "The most fundamental thing about defense spending is that threats drive defense spending. It's now going to be easier to fund almost anything."

Indeed, perhaps no other industry was touched more by the terrorist attacks than the handful of powerful companies that build the country's warplanes, nuclear-powered subs and precision-guided bombs.

"We are going to have to see an increase in investment in the long term," said Cynthia Brown, president of the American Shipbuilding Association, echoing the industry's battle cry on Capitol Hill. "We have not invested in our military for the last decade."

So far, the pitch has worked. Within days of the attacks, congressional Democrats dropped their effort to cut funding for the multibillion-dollar national missile defense shield; members of Congress moved to revive a $25 billion project to purchase a fleet of state-of-the-art destroyers for the U.S. Navy; and Marine Corps officials began touting the grounded V-22 Osprey tilt-rotor airplane as an ideal craft to move ground troops in the mountainous terrain of Afghanistan.

Those programs are not the only ones receiving more attention in the wake of the attacks. "There are 150 programs on Capitol Hill that we are actively working," said a lobbyist for one major defense contractor.

Northrop Grumman is seeking $300 million to upgrade the B-2 Stealth Bomber, the aircraft that successfully completed a bombing run in Afghanistan last weekend. Lockheed Martin Corp. is pushing for $3.9 billion for the F-22 Raptor. Raytheon wants $677 million for the Defense Department to work on the next generation of Patriot cruise missiles and an undisclosed amount to upgrade Tomahawk cruise missiles.

In a startling turnaround, Boeing may launch a campaign to persuade the Pentagon to purchase dozens more C-17 transport planes at a price tag of $230 million apiece. In addition, virtually the entire defense industry backs billions of dollars in new research and development spending on national missile defense.

The defense industry is particularly concerned about the Defense Department's procurement budget, which has steadily dwindled since former President Reagan built up the military during the Cold War. The steepest decline came under President Clinton, when the procurement budget decreased from $75 billion in 1992 to about $50 billion last year, according to the Aerospace Industries Association.

"We're not trying to get back to the Reagan administration," said an official at the aerospace lobbying outfit. "We're trying to get back to Carter."

The defense community is well-armed for the battle. The leading defense contractors spend more than just about anyone else on lobbying Congress and have retained some of the most connected firms inside the Beltway.

Lockheed Martin Corp., for example, spent $9.7 million on lobbying last year, according to FECInfo. Only General Electric and Philip Morris reported more lobbying expenses in 2000 than Lockheed. Rival Boeing Co. ranked fifth overall in lobbying expenses, with $7.8 million last year. Northrop Grumman claimed the No. 11 position, with $6.9 million in 2000. Their firms' lobbying firepower includes everyone from Haley Barbour of Barbour, Griffith and Rogers and former Rep. Bob Livingston, R- La., of the Livingston Group, to Podesta/Mattoon.

As House and Senate appropriators begin work on a revamped spending bill for the Pentagon, many lawmakers believe it is inevitable that the military will receive its first big spending boost in years. That means that for the first time in a decade, the remaining players in the defense industry may not be forced to fight one another for a piece of the federal pie.

Said a lobbyist for one defense aerospace company, "It will be nice to not be beating each other over the head anymore."