Report: Pentagon Contract Spending Powers Connecticut to No. 1 in US as Russia and China Test Military Strategy
By: Stephen Singer
July 27, 2020
Significant military spending has boosted Connecticut’s already muscle-bound defense industry, with increases in 2018 far ahead of the U.S. average, according to a study by the Pew Charitable Trusts.
By one measure — defense contracts as a percentage of spending — Connecticut was No. 1 among the states. Pew said contracts that pay for goods and services such as weapons systems and information technology consulting accounted for 93% of Pentagon spending in the state in 2018, the most recent year for which data are available.
Massachusetts was next, at 88%, and Delaware was last, at 15%.
Other areas of spending are for retirement, grants, salaries and wages and nonretirement, such as health care.
Defense spending per capita in Connecticut increased by 44% in 2018 from 2017, nearly four times the national average of 12%.
The federal government spent $579 billion on defense in the states and Washington, D.C., or $1,772 per capita in 2018. Military spending in Connecticut was $4,560 per person, among the highest in the U.S., behind Alaska, Hawaii, Maryland, Virginia and Washington, D.C.
Per capita defense spending ranged from $565 in Oregon to $7,455 in Virginia, with Washington, D.C., receiving the most, $10,779 per person. The disparities are due to the presence of military bases, the number of personnel and industrial activity.
Connecticut is home to Pratt & Whitney, a subsidiary of Waltham, Mass.-based Raytheon Technologies Corp. that makes engines for the F-35 fighter jet; Sikorsky Aircraft, the Lockheed Martin Corp. helicopter manufacturer; and General Dynamics Electric Boat, which makes nuclear submarines in Groton and Quonset Point, R.I.
In addition, hundreds of manufacturers across Connecticut are part of the critical supply chain that makes parts and components for defense contractors, including the Evendale, Ohio-based commercial and military aviation manufacturer of General Electric Co.
Connecticut “kind of has the trifecta of military development programs,” said Loren Thompson, chief operating officer of the Lexington Institute, an Arlington, Va., think tank.
The significant spending increases followed the 2016 election of President Donald Trump who pledged to boost the U.S. military. In addition, U.S. strategists are watching warily as Russia dispatches submarines into the North Atlantic and China extends its reach across the South China Sea.
“Russia has sent more subs into the North Sea than any time since the Cold War ended,” Thompson said.
And China is the “centerpiece of U.S. strategy,” prodding Congress and the Pentagon to invest in new aircraft, missiles and the B-21, a new Air Force bomber, he said. Pratt & Whitney is making the engine and Raytheon Technologies is making the electronics, Thompson said.
Also, due partly to an increase in spending caps allowed by the Bipartisan Budget Act of 2018, federal spending on national defense rose by $63 billion, a 12% rise, from fiscal 2017 to 2018, Pew said.
Congress is on course to continue massive military spending that would deliver billions to Connecticut. It’s a particularly welcome boost to the state’s economy, which contracted by 4.6% in the first three months of the year as businesses closed to slow the spread of the coronavirus.
The House of Representatives voted Tuesday to approve a $740 billion authorization measure for the 2021 budget year. The Senate voted Thursday on its version, sending the two bills to a committee that must come up with one piece of legislation for both houses of Congress to pass and Trump to sign.
The House bill authorizes $6.8 billion for the Virginia class submarine program, $4 billion to begin construction of the Columbia class submarine, $2.8 billion for the B-21 bomber and $2.2 billion for 12 KC-46A tanker aircraft powered by Pratt & Whitney engines, said Rep. Joe Courtney, D-Conn., a member of the House Armed Services Committee.
Lockheed Martin posted second-quarter financial results Tuesday that reflected increased military spending. Its rotary and mission systems business posted net sales of $271 million, or 7% higher than in the same three months last year.
Net sales were up about $240 million for Sikorsky helicopter programs due to higher volume, primarily in Seahawk production and the Marine One presidential helicopter.
And Chief Financial Officer Kenneth Possenriede told industry analysts on a conference call Tuesday that Lockheed Martin is expecting double-digit growth this year for the F-35. Orders are driving strong sales growth year-over-year and is expected into the second half of 2020, he said.
F-35 production is “higher than what we thought,” Possenriede said.
Click here to view this article as it originally appeared on the Hartford Courant website.