The Economic Cost of Cutting Defense Spending

Throughout the latter half of the 20th century, the U.S. invested in numerous fighter jet programs to maintain air superiority. Those investments have yielded some of the most advanced aircraft in history, but at what cost? In December 2005, the F-22 Raptor entered service, effectively designating the United States as the first nation to operate fifth-generation aircraft. A product of the Air Force’s Advanced Tactical Fighter Program, it ensured American air supremacy with advanced stealth capabilities and weapon systems. While the F-22 is known for its operational prowess, it also is one of the most expensive fighter jet programs for the American taxpayer. The Government Accountability Office estimated that the total cost of the program was roughly $67 billion, which commanded a per-unit cost of $150 million. However, when maintenance and operational expenses are considered over the lifecycle of the aircraft, per-unit costs balloon to more than an estimated $300 million. 

The F-22 Raptor is just one of several expensive fighter programs in history. The F-35, considered the most technologically advanced fighter jet in the world, is estimated to cost the Department of Defense $1.7 trillion during the program’s lifespan. A decade behind schedule, the program is expected to exceed the original cost projections by $183 billion.

With ballooning costs and mounting delays threatening F-35’s mission readiness, many have called for the program’s cancellation. However, termination of the program would also lead to the elimination of tens of thousands of jobs across the country. Consumer goods, such as clothes and personal electronics, are typically produced in a single factory shipped to the country of sale, and then sold to the consumer. However, military hardware is manufactured very differently. The final assembly plant for the F-35, Air Force Plant 4, is located at Lockheed Martin’s mile-long facility in Fort Worth, Texas. However, a majority of the plane’s components are not produced at the Fort Worth facility. The fuselage of the F-35 is produced by Northrop Grumman at their manufacturing facility in Palmdale, California. The engines are produced by Pratt & Whitney, a subsidiary of RTX (Formerly Raytheon Technologies) in Middletown, Connecticut. Internal avionics, main armaments, and cockpit technologies are all produced by dozens of other contractors across the United States. Just considering the fuselage, engine, and airframe components, it accounts for nearly tens of thousands of jobs split across three states. The budget allocation for the F-35 feeds a complex industrial base that supports tens of thousands of jobs. Slashing the budget would result in significant unemployment in counties and municipalities that depend on those jobs for tax revenue. 

At the F-35’s final assembly plant in Fort Worth, more than 18,000 employees are making Lockheed Martin the largest employer in Tarrant County. Lockheed Martin employs more people than the Dallas Fort Worth International Airport, General Motors assembly plant, Naval Air Station Joint Reserve, and the University of Texas at Arlington. Each of those employers individually employ less than 14,000 people. Out of the approximately 115,000 manufacturing jobs in Tarrant County, Lockheed Martin accounts for 16% of all total manufacturing employment. If funding were to dry up overnight for the F-35 program, there would be thousands of skilled workers who would need a job the following morning.

With a large defense contractor such as Lockheed Martin, why wouldn’t they be able to relocate those skilled workers to another project? It is all about cost. If Lockheed Martin was forced to cut every job related to the F-35 program, there will be thousands of highly specialized workers trained in very niche roles that need to be retrained. For example, an employee who is tasked with installing an Active Electronically Scanned Array (AESA) radar on an F35 would have to be relocated and retrained to work on the installation process of a targeting system on a Guided Multiple Launch Rocket System (GMLRS). Billions spent on research and development, coupled with labor costs, force Lockheed Martin to be cost-conscious. 

Defense contractors are also able to offer higher-than-average salaries to attract and retain talent. In Tarrant County, the average individual income is around $39,000. However, Lockheed Martin employees earn significantly more than that. According to Payscale, for a variety of roles, the average expected salary of a Lockheed Martin employee in Tarrant County is between $62,000 and $150,000. Tarrant County does not have the employment infrastructure to find thousands of employees’ replacement jobs overnight that pay to that extent.  

Jobs also allow defense contractors to be in an advantageous position when lobbying Congress for future military contracts. Lockheed Martin spends more than $10 million on lobbying efforts in both houses of Congress, annually. Congressional representatives whose districts have Lockheed Martin facilities in them, receive the bulk of those campaign contributions. Between 1995 and 2024, Kay Granger (R-TX 12) received more than $800,000 in campaign contributions from Lockheed Martin. Air Force Plant 4 is located in Granger’s district.

While campaign contributions are used to wield political influence in Congress, jobs act as the cosigner. No congressional representative wants to be responsible for thousands of jobs leaving a district. Jobs act as a quantifiable marker of success for any Congressperson’s career. If they vote to cut funding for a military program— in this case, the F-35—that results in large-scale layoffs, it will be a blemish on their career. Defense contractors have made themselves an integral part of the communities where they produce their products. By establishing a tax base and indirectly creating hundreds of thousands of jobs, they have forced the hands of state and federal lawmakers. Congressional lawmakers may not enjoy having a large defense contractor presence in their district but they cannot deny it is an economic driver. Defense contractors have strategically ingrained themselves in the fabric of our political economy. They understand that they are too valuable to be blocked and in turn flex that political muscle. 

The F-35 is not the only military program that follows this model. The Pentagon has hundreds of military programs that have dozens of prime and sub contractors working to fulfill them. From large military hardware platforms such as the F-35 or Ford Class supercarriers to night vision goggles and rifles, there is a complex industrial base behind it. Parts and components are sourced from all over the country, and at every stage of assembly, there are hundreds to thousands of jobs that support that piece of equipment. Contractors understand that by spreading their presence across multiple states and involving as many stakeholders as possible, they can establish themselves as integral parts of the local economy. This strategy has ensured that contractors such as Lockheed Martin remain a manufacturing powerhouse with substantial political leverage. 

Defense spending will always be a hot-button political issue. The United States spends more on defense than the next top 10 spenders. Many opponents to defense spending have cited that the billions spent on ordinance and the development of new weapons programs would be better spent on investing in education or healthcare. However, how much more needs to be spent in order to fix a chronically broken education system? Local, state and federal governments have spent more than $800 billion in public education in 2023, and there are still hundreds of badly neglected schools and children at a reading level well below their grade. The United States has spent $4.5 trillion, or approximately 17% of U.S. gross domestic product (GDP), on healthcare. How much money should be cut from the defense budget and spent on healthcare in order to reform the healthcare system in the United States? While there is fierce debate about whether the United States spends too much or not enough on defense, the reality is that it supports hundreds of thousands of jobs all across the country that make up the tax base for hundreds of counties and municipalities and indirectly employs a million people. Jobs are the hard currency that buys political goodwill in Washington. Cutting defense spending would mean cutting off a key source of income for millions of Americans.