Global Policy Forum

Declaring War on the Military Contractors' Invasion of Washington

Private military and security companies (PMSC’s) employed by Washington are negatively impacting the US economy. The war industry, which lobbies for ever-increasing military spending, warns that cuts in funding will sacrifice jobs. Yet this article argues that the use of PMSC’s, by the government, is actually harming job creation. The authors calculate that up to 11,700 jobs are lost for every $1billion spent on PMSC contracts.

By Robert Greenwald and Derrick Crowe

September 13, 2011

As the budget super-committee convenes, the war industry has begun a huge lobbying effort to protect its taxpayer-paid profits. The new deficit commission held its first substantive meeting on 13 September, and the military contractors were out in force to protect their profits. They'll be working to cash in on hundreds millions of dollars in campaign donations and lobbying spending, and they will deploy their favourite (and bogus) "jobs" spin. But members of the committee should not be fooled. The war industry is interested in one thing: continuing profits at our expense.

Tuesday morning, a campaign called "Second to None", backed by the largest names in the military contracting industry, staged a "march to the Hill". These contractors are armed with fresh talking points and backed by 843 lobbyists (many of whom are former staffers of deficit committee members), along with deep campaign donation histories with members of Congress. Every bit of this influence will be used to prevail upon the committee not to call for cuts to military spending in its final report to Congress.

The persuasion effort aimed at committee members will be largely an inside game, so we have launched a counter campaign, War Costs, launched with a full-page ad Monday in a Capitol Hill insider publication to call for cuts to the war budget. But since the contractors' game beyond the back rooms will be waged using predictable talking points, committee members should know that the central thrust of the contractors' case for continued huge war budgets is false.

War spending costs us jobs compared to other ways of spending the money. For every billion dollars we spend on war, instead of education, renewable energy technology or even simple tax cuts for consumption, we lose between 3,200 and 11,700 jobs, at least. War spending is terrible at job creation, period.

Now, keep that several-thousand-jobs cost per $1bn in mind when you look at the following list. It's the amount in revenues that each of the top five military contractors made in 2010, strictly through doing business with the US government, according to their annual reports:

Lockheed Martin: $38.4bn (84% of total 2010 revenues)
Northrop Grummon: $32.1bn (92% of total 2010 revenues)
Boeing: $27.7bn (43% of total 2010 revenues)
General Dynamics: $23.3bn (72% of 2010 revenues)
Raytheon: $22.3bn (88% of total 2010 revenues)

Every one of these corporations was cited for misconduct in 2010 (misconduct varying from contract fraud to environmental or labour violations). The committee members should remember that when these guys come calling to Capitol Hill, especially since one of the instances of misconduct for which Lockheed Martin was cited last year was a violation of the False Claims Act in an attempt to grab more US taxpayer dollars. The company paid $2m to settle the justice department suit.

Between 2007 and the present, these corporations donated $1.4m to the 12 committee members' campaigns and PACs alone, according to information compiled from, and they have spent $210m in the last 18 months on lobbying. You can bet they'll spend more, much more, to keep the billions flowing from our hands into their pockets. What happens in the deficit committee over the next several weeks will be a test of whether our representatives can make decisions in the name of the common good, or whether our government really is up for sale.


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