Defense Execs Say Deeper DoD Budget Cuts, Higher Taxes OK
By Sydney J. Freedberg Jr. and Otto Kreisher
Published: December 3, 2012
WASHINGTON: Top executives from four major defense and aerospace firms sent a message to Congress and the Obama administration today: the nation expects its elected leaders to lead and the well-paid executives are willing to accept higher personal and corporate taxes on the path to find a solution to the nation's fiscal woes. On top of that, they conceded that the Pentagon budget must be cut even more deeply than the $487 billion already targeted over the next decade to seal an increasingly elusive deal to stop the automatic spending cuts known as sequestration.
David Langstaff, CEO of an engineering and analysis services company called TASC, issued the strongest call for additional defense cuts. Those who have benefited from past national spending "should be willing to sacrifice," he said. That means tax increases, bitterly opposed by most Republicans, and "reform," which usually means the kinds of cuts to the big entitlement programs like Social Security and Medicare that most Democrats refuse to discuss.
Pressed to get specific on budget cuts, Northrop Grumman CEO Wes Bush suggested a tiny additional $20 billion to $25 billion over 10 years (on top of the $487 billion already cut by last year's Budget Control Act). But Langstaff suggested $150 billion over the next decade.
POGO's Freeman added that the "save jobs by stopping defense cuts" argument overlooks the fact that defense firms have already "cut thousands of jobs" even as revenues rose steeply in recent years. And he derided the industry overall, saying "it's not very good at delivering jobs or delivering weapons...From the Joint Strike Fighter to the LCS (Littoral Combat Ship), lots of things are over budget, under-performing, and delayed."