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Jayne Lyn Stahl

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The 'Entitlements' Folks

Posted: 08/01/11 07:07 PM ET

Now that it appears that Congress is getting ready to pass a compromise bill that will allow for raising the debt ceiling, it's time to take a look at the fine print. The only problem is, the fine print seems to have been written in invisible ink.

The last piece of legislation that was passed in the kind of last-minute frenzy we face right now was the USA PATRIOT Act, a bill that many members of Congress admit to never having read, and one that created the infrastructure for "homeland security," thereby increasing the federal deficit exponentially with a costly and abstract war on terror.

How many of those war-on-terror hawks back in 2001 would have denied then-president George W. Bush the constitutional right to raise the debt ceiling? These same folks don't refer to Bush's wars and frenetic military spending as "entitlements"; they reserve this term for Grannie's prescription for reading glasses.

OK, don't shoot until you see the whites of their eyes, as the saying goes. Well, we have seen the whites of their eyes, and we now have a good idea who's going to feel the gravest impact of any deficit reduction plan that Congress pushes through at the last minute.

C-SPAN presented former Speaker of the House Nancy Pelosi's riveting speech to the House last night, in which she inveighed against Republicans and the proposed plan to cut $2 trillion from the deficit by, among other things, taking $1 trillion from spending programs. As Pelosi suggested, these cuts will result in the loss of Pell grants, and fewer opportunities for college for millions of young people. She's right. Education must not be on the table. That the House or the Senate should consider anything other than a clean bill requiring only that Congress raise the debt ceiling is in itself outrageous.

Congressional deficit hawks who, with religious zeal, have managed to confuse the need to raise the debt ceiling with a debate about deficit reduction are the ones who today are calling for spending cuts. Though Democrats in the House insist that Social Security and Medicare aren't going to be touched, what other programs will be? Some say there will be more cuts to Defense, but how much, and starting when?

Even a cursory look at military contracts for 2010, as well as projected revenue from government contracts so far this year, shows not just gluttony but the overreach of Defense.

One has only to look at the profit margins and source of revenue for the 10 top companies that have made billions of dollars from U.S. government contracts over the past year alone to understand why there are still so many troops left both in both Afghanistan and Iraq.

CNBC's website lists the those 10 companies. Northrop Gunman, which comes in at third place, had more than $16 billion in government contracts last year alone, and so far in 2011 more than $4 billion.

And, on finding out that the 2012 USAF budget includes cuts, Northrop Gunman increased the price of unmanned drones by more than 25 percent, according to Bloomberg. There are now 77 aircraft costing $102 million each.

At the bottom of the top-10 list, BAE, a British multinational defense contractor, was awarded $6.6 billion in defense contracts in 2010, which represents one sixth of its total 2010 revenue of nearly $37 billion. BAE has received more than $1.3 billion in defense contracts so far this year.

CNBC notes, too, that General Dynamics, a company squarely in the middle, in fifth place, was awarded nearly $15 billion in govenment contracts last year, which accounts for nearly 50 percent of its total revenue for 2010. GD manufactures arms and tanks. This is one entitlement program that no one on the Hill wants to talk about seriously addressing, only Social Security, education and Medicare.

Even more of our taxpayer dollars were funneled to Raython (RIN), headquartered in Waltham, Mass. While they received roughly the same amount in 2010 defense contracts as General Dynamics, $15 billion, RIN has been awarded $4.3 billion so far in 2011, an increase of nearly 200 percent over the amount handed to Raython. Both Raython and General Dynamics get to boast that roughly half of their income for 2010 came from the Defense Department, and the U.S. taxpayer. Let's hope, for their sake, that their lobbyists in Washington aren't members of the choir calling for smaller government, or they'll be out of work.

The contractors that made it to first and second place on CNBC's list of the 10 companies that made billions off the U.S. government are Boeing, which is mainly known for manufacturing aircraft, of course. In 2010, Boeing was awarded nearly $20 billion from Defense, and $6 billion so far this year, putting them in second place. In 2010, Boeing's total earnings came to $63.3 billion, with their Defense, Space, and Security Segment accounting for $63 billion.

Last but not least on the list, and in first place, is Lockheed Martin, a company that was given nearly $40 billion from Defense last year, which accounts for more than 90 percent of its total 2010 revenue of a little less than $46 billion. This year so far, Lockheed Martin has received nearly $16 billion in contracts from the the U.S. government (that's four times the amount Raython has gotten from Uncle Sam). Lockheed Martin, in Bethesda, Md., manufactures satellites, space vehicles and combat aircraft.

Crunching numbers: revenue strictly from government contracts in 2010 for the top 10 companies combined totals $143.3 billion in 2010, and $42 billion in the first part of 2011. Total revenue for these companies combined is nearly $360 billion. Yes, that's about a billion dollars a day for a year. Once again, in some instances, your tax dollars accounted for approximately half of all revenue these companies earned.

Yet where is the public outrage over an entitlement program that lines the pockets of military contractors? Where are the deficit hawks, and why aren't they demanding an immediate withdrawal from Afghanistan, Iraq, Pakistan, Yemen and any other country we're currently occupying or in the process of occupying?

Oh, and yes, let's not forget Blackwater, now XE, and their mercenaries, whose numbers are about equal to those of our troops. As Washington Technology reported back in 2007, XE was one of five companies to whom the Department of Defense's counter-narcotics program awarded up to $15 billion in government contracts. The DoD gave XE a $92-million contract just for air transport. Not surprisingly, some of the other companies included were Lockheed Martin, Raytheon and Northrop Gunman.

In one year alone, 2011, the U.S. government reportedly will spend close to $160 billion on wars in Afghanistan and Iraq, a whopping $107 billion on Afghanistan alone. And, as Nobel Laureate Joseph Stiglitz has suggested, the ultimate pricetag for our combat campaigns may be somewhere around $3 trillion, but don't expect to see "austerity" measures to stop the hemorrhaging of taxpayer funds to this entitlement program.

But where are the calls in Congress to take some serious and long-term measures to reduce Defense spending? Savor the irony that some of those Democrats who now serve in both the House and Senate were likely college protestors against the war in Vietnam, but how many of them are standing up now and demanding that the $1 trillion in spending cuts come from the Defense? How many are speaking out about balancing our priorities instead of the budget, and eliminating the Department of Homeland Security and the NSA electronic surveillance marketeers, as well as investigating just who profits most from the military-industrial complex we've now become?

Those who want to gut the safety net for the elderly, infirm and poor are the same folks who put in place the safety net programs. It is they who pose the gravest risk to our national security, those who wish for the wealthiest 2 percent to continue to prosper at the expense of 98 percent of the rest of us, those who call anything that does not belong to them an "entitlement."

We all know that any trimming of Defense in this bill will be largely cosmetic, and that it would be ludicrous to expect anything else, given our perpetual state of combat-readiness. Nevertheless, anything other than a clean bill to raise the debt ceiling without any strings attached is a capitulation, and it is unacceptable.

 
 
 

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