SENATE MAY INCREASE DEFENSE, AND PERHAPS OTHER, SPENDING
There is a growing Senate consensus that defense spending needs to be significantly increased over and above what the House is proposing for the country to meet its national security needs. House appropriators have put forth a spending level of a little over $833 billion for FY’25. While that’s technically 1% above this year, it amounts to a cut in spending once inflation is taken into account. Senators on both sides of the political aisle don’t think that’s enough with some proposing the addition of $25 billion more. There are, not surprisingly, some strings attached to support for a higher number, primarily among Senate Democrats. Senator Patty Murray (D-WA), Chair of the Senate Appropriations Committee, wants to see similar increases in non-defense discretionary spending. “Parity is the order of the day,” Murray said recently. Not only could this create an impasse in the Senate, getting the House to go along could be very difficult indeed. While Republicans have traditionally been hawkish on defense spending, some are increasingly neo-isolationist and/or are more concerned about cutting spending overall to reduce the growing budget deficit. Contractors absolutely have a role to play in this debate. Companies that do business with DOD should make sure that their elected officials realize that spending translates into jobs and opportunities in their states and districts. While there is an argument to be made on cutting overall spending, the best way to do that is to have the hard discussions on “mandatory” outlays that actually make up most of the spending pie. No one should expect that in an election year, but in the meantime, there is every reason to take steps to ensure that national security needs are met.