Lexington: US Politics and the Defense Budget

With American elections approaching, questions are being asked in the industry about the potential implications for American defense policy. In January 2007, “The Impact of Recent Political Changes on the Defense Sector” transcribed Loren Thompson of the Lexington Institute think tank, during the Raymond James Washington Technology & Services Summit. It offered some interesting thoughts on the contractor/ military political gap, and added:

“The bottom line on the Democratic defense agenda is that it doesn’t reflect much support for new technology outlays, but it also doesn’t herald an era of rapidly declining defense budgets. What’s likely to change is the composition of defense spending rather than the scale.”

Fast forward to February 2008, where Thompson is speaking to US Army Leaders at the RAND Arroyo Center. “The Role Of Party Politics In Shaping Defense Priorities” offers an impartial presentation of how the two major parties evolved, how they think about national security, their inclinations and allocation preferences with respect to the defense budget, and what a victory by either side probably means. Unusually, it is a fair presentation that puts forward each party’s broad view reasonably faithfully. Which matters, because:

“…we need to understand how party politics shapes defense policy — not because we like it, but because it is a fundamental reality of life in a democracy. Did you know that a recent study of weapons outlays found 91% of all the variation in spending over the last four decades was traceable directly or indirectly to which party controlled the Senate and the White House? Like me, you probably thought that threats were the main driver of weapons spending, but the data show otherwise.

Read both speeches, consider your own experiences, and decide what you think. Thompson also changes his tune slightly, however, when he says that:

“… if the Democratic Party wins control of the White House and Congress in November, it will take a huge demand stimulus from the likes of Osama bin Laden to prevent a leveling off and then decline in defense spending in subsequent years.”