DAILY TRIFECTA: Support The Buybacks*
*And the troops, too, if the budget allows
THE SET-UP: Today’s trio follows the money from the pockets of taxpayers through the Laundromat of war and onward into the stock buybacks issued by defense contactors. Much of the money laundered through America’s globe-spanning empire ends up as debt on the federal balance sheet. At the same time, a comparative pittance makes its way to the soldiers and veterans who earn the far less remunerative wages of empire. In fact, they’re the ones paying the price … with their physical health, their mental health or with their lives.
The post-9/11 era gave us plenty of platitudes celebrating the sacrifice of veterans, but private charities like the Wounded Warrior Project exist to fill the sizable gap between the needs of veterans who fought in Iraq and Afghanistan what we are actually willing to provide.
It was far worse for Vietnam vets, who didn’t even have the platitudes. They faced recriminations, PTSD, and little real financial support. Soldiers exposed to Agent Orange had to fight a second war against years of official denial while they suffered and died. Of course, vets who’ve survived decades of chemical warfare raging inside their bodies now face the prospect that there won’t be enough money. It’s a problem the folks at Lockheed won’t face as they extract over $2 trillion dollars out their chronically flawed F-35, which I like to call “the flying ATM machine.”
TITLE: 87,000 Vietnam Veterans May Qualify for $844 Million in Benefits. How Come Nobody Told Them?
https://thewarhorse.org/va-millions-benefits-vietnam-veterans-agent-orange/
EXCERPTS: In the span of just a few weeks, Marc McCabe traveled this summer to Puerto Rico, the Dominican Republic, California, and Texas. But the 74-year-old wasn’t on an epic retirement trip.
As a pro bono veterans advocate, he was searching for Vietnam veterans and surviving family members who may be eligible for disability compensation.
McCabe, a former combat corpsman attached to Marine Corps units during the Vietnam War, has survived two bouts of cancer himself. He has been a veteran’s advocate for two decades, but his job has gotten a lot busier thanks to a spate of new legislation that has expanded benefits for millions of veterans exposed to toxic chemicals in war.
Technically, the U.S. Department of Veterans Affairs should be the ones notifying veterans when they may be eligible for new benefits—but McCabe says they often don’t.
“They’re leaving them behind,” he says.
And the Department of Veterans Affairs’ very own Office of Inspector General agrees. In an unsparing report this summer, the watchdog estimated that VA has failed to inform up to 87,000 Vietnam war veterans and their survivors that they may now qualify for retroactive compensation benefits because of exposure to toxic herbicides such as Agent Orange.
If that sounds like a startling number, consider this: Those overlooked veterans and their families could be entitled to more than $844 million, the report said.
“There are millions of dollars at stake that Vietnam veterans and their survivors should be receiving,” says Bart Stichman, co-founder of the National Veterans Legal Services Program, which represents veterans in benefits appeals.
And while there is widespread agreement that America should compensate its veterans for their sacrifice and service, there’s a growing concern about where all this money will come from—especially as the cost continues to balloon thanks to the recently passed PACT Act, which added coverage for potentially six million more veterans exposed to toxins from burn pits and other sources during the Vietnam, Persian Gulf and post-9/11 wars.
America will soon owe veterans trillions of dollars in medical and disability compensation, said Linda Bilmes, a professor in public policy at the Harvard Kennedy School.
Despite the pledge, she said, “we don’t really understand the cost. … We don’t have a function that is keeping track of all of the accrued promised benefits the way we should.”
Facing a record budget shortfall, VA may be unable to pay benefits to millions of veterans as soon as October.
In July, VA told members of Congress that the department was facing a budget shortfall of $15 billion across the remainder of 2024 and 2025, raising the ire of House Committee on Veterans’ Affairs Chairman Mike Bost, an Illinois Republican. He blamed “horrendous, top-to-bottom mismanagement” for the massive deficit. It’s the largest budget shortfall in the department’s history, and VA is attributing it to increased costs caused by the PACT Act.
This budget shortfall means that 7 million veterans and their surviving family members are at risk of not receiving benefits payments as soon as Oct. 1. But $15 billion is only a drop in the bucket compared to the startling costs the department faces in the coming years.
“Veterans benefits always peak long, long after a war is finished,” says Bilmes.
While last year the VA paid out about $143 billion to about 6 million veterans, Bilmes estimates that the U.S. owes more than $2 trillion in medical and disability benefits to veterans just from the wars in Iraq and Afghanistan.
Suzanne Gordon, a senior policy analyst at the nonpartisan think tank Veterans Healthcare Policy Institute, says that the U.S. has the resources to fulfill its commitment to veterans.
“We’re a very rich nation,” she says. “There’s no question that we can afford it. The question is, ‘Why don’t we want to afford it?’”
Bilmes says that previous U.S. wars were paid for by increasing taxes and government budget cuts to nonwar spending. But since 9/11, she says, “we’ve paid for all our wars entirely through borrowing,” which has been one of the factors driving up the national debt.
TITLE: The Consequences of Expanding the Pentagon Budget
https://inkstickmedia.com/the-consequences-of-expanding-the-pentagon-budget/
EXCERPTS: Walter Lippmann famously wrote that foreign policy “consists in bringing into balance, with a comfortable surplus of power in reserve, the nation’s commitments and the nation’s power.” When our objectives abroad greatly exceed our ability to achieve them, our nation’s foreign policy becomes “insolvent.” One sign of foreign policy insolvency might be a series of discretionary wars and military interventions that either fail altogether or cannot be successfully terminated. Another might be perpetual budget deficits and massive national debt.
In the case of post-Cold War American foreign policy, we have experienced both. Our national debt has ballooned to more than $35 trillion, and discretionary defense spending has played no small part in this. We have notched few clear successes and many clear failures among our numerous military interventions in the Balkans, Middle East, Asia, Africa, and Latin America over the past three decades. Yet, since the fall of the Berlin Wall, Washington has doubled the number of NATO allies it has a treaty obligation to defend, and the alliance’s expansion and forays into out-of-area operations have fueled, not reduced, threats posed by Russia and China.
What is clear is that the United States cannot afford to maintain global dominance forever. US defense spending has already grown astronomically in recent decades – 48% since 2000. The military services are now pursuing a slew of new weapon acquisition and modernization programs, the costs of which will likely far exceed their initial estimates. Generations Z, Alpha, and those that follow will bear the burden of unsustainable growth in defense spending, paying for today’s weapon acquisition programs through the 2030s and beyond. Despite this, some new acquisition programs will have negligible, if any, positive impacts on national security.
In fact, the continued pursuit of overly ambitious acquisition plans will hamper US force readiness, national security, and economic resiliency. Already the Pentagon struggles to keep acquisition programs on schedule and within budget, and the development of unnecessary weapons will only exacerbate those issues, slowing delivery to the warfighter while digging into taxpayers’ pockets.
TITLE: Top defence contractors set to rake in record cash after orders soar
https://www.ft.com/content/5e368d70-b6e2-4433-a747-cdcfab061f27
EXCERPTS: The world’s largest aerospace and defence companies are set to rake in record levels of cash over the next three years as they benefit from a surge in government orders for new weapons amid rising geopolitical tensions.
The leading 15 defence contractors are forecast to log free cash flow of $52bn in 2026, according to analysis by Vertical Research Partners for the Financial Times — almost double their combined cash flow at the end of 2021.
Five top US defence contractors are forecast to generate cash flow of $26bn by the end of 2026, more than double the amount in 2021. The figures exclude Boeing, given its recent problems and heavy weighting towards civil aerospace.
In Europe, national champions BAE Systems, Rheinmetall and Sweden’s Saab, which have benefited from new contracts for ammunition and missiles, are expected to see combined cash flow jump by more than 40 per cent.
The industry is benefiting from a sharp increase in military spending as governments increase their budgets in response to Russia’s full-scale invasion of Ukraine and escalating tensions in the Middle East and Asia.
In the US, recent aid bills for Ukraine, Taiwan and Israel allocated nearly $13bn for weapons production at America’s five biggest defence groups — Lockheed Martin, RTX, Northrop Grumman, Boeing and General Dynamics — and their suppliers. In the UK, the Ministry of Defence has committed £7.6bn for military aid to Ukraine over the past three years, including for stockpile replenishment.
The government spending surge has already propelled order books to near record highs. It typically takes several years for new contracts to translate into higher sales — defence companies book the majority of their sales once weapons are delivered — but the growing cash flows are already prompting debate about how the industry will spend the money.
“It’s the billion-dollar question for the industry: companies typically don’t like holding large amounts of cash on their balance sheets, so what do they do with all that money if acquisitions are not that straightforward? Share buybacks and dividends are one way,” said Robert Stallard, analyst at Vertical Research.
Companies had already directed billions of dollars into share buybacks before the recent flood of new orders; some took on extra leverage to do so. Last year was the strongest for buybacks by aerospace and defence companies in both the US and Europe for the past five years, according to data from the Bank of America, although levels remain far below those of other sectors.
Lockheed Martin and RTX bought back close to $19bn in stock between them last year. In Europe, BAE Systems this summer concluded a three-year £1.5bn buyback programme and immediately started a further £1.5bn buyback.
The large repurchases effectively using taxpayers’ money by US contractors, have prompted criticism among some lawmakers who have questioned whether companies are investing enough in new facilities and production. Executives have insisted they are boosting capital spending even as they return money to investors.