According to the Washington Post, the US Pentagon has given hundreds of millions of dollars to contractors for projects largely unrelated to the pandemic. This includes $186 million to Rolls-Royce and ArcelorMittal for ship construction and maintenance.
Tens of millions were also given to develop various types of drones and create a global radar network, while $80 million was given to a company called Spirit Aerosystems to support “domestic manufacturing capacity” during the Covid-19 slowdown in the aviation industry. $15 million was given to Bethel Industries for lasers that speed up car production, and $2 million to American Woolen Company for domestic production of fabric for army uniforms.
Pentagon officials justified the cost as supporting a defense industrial base that the White House insisted was too dependent on foreign supply chains during the crisis and argued that the general terms of the funds at their disposal allowed them to use the money as they saw fit.
Ultimately, under the Pentagon plan, about $688 million of the money went to defense contractors. Ten of the 30 companies selected so far also received money through the Paycheck Protection Program, a separate program that has issued hundreds of thousands of loans aimed at preventing layoffs. That program has faced criticism for lending federal money to large businesses that have either laid off workers or held onto the loans without bringing their employees back to work.
Defense Department lawyers partially justified the spending of funds on defense contractors by striking a deal where the Health received $17 billion in funding that was passed on to medical companies.
The US military has an operating budget of about $934 billion annually for the fiscal year running from October 2020 to September 2021, including about $705 billion in Pentagon and contingency operations funds related to the war against the Islamic State, while $228 billion was given to other related spending.
The Boston University and Brown University “Costs of War” project estimated last year that the Pentagon spent $370 billion of its $676 billion budget in 2019. So redirecting funding intended for Covid-19 supplies is equivalent to $1 billion in an industry already awash in subsidies.
“We are grateful that Congress provided the authorities with the resources to enable investments in the domestic production of critical medical supplies and to protect our essential defense functions from the effects of Covid-19,” the Under Secretary of Defense said. “We must always remember that economic and national security are very closely intertwined, and that our industrial base is truly the nexus of the two.”
The Democratic-controlled House Appropriations Committee wrote in a report on the 2021 defense budget that it did not believe the spending was in line with what it was really intended to do, which was invest in the nation’s ability to produce personal protective equipment. The Pentagon itself predicts that the U.S. will need up to 3.3 billion N95 masks
The committee added that it is “concerned that this funding will not support increased production of medical supplies, as provided for by additional funding in the CARES Act.”.
