Excessive Pentagon Spending is a Source of Income Inequality and Poverty

Kairos Center

April 1, 2020

Category: Policy

By Jonathan King, Maryellen Kurkelos and Savina Martin

If ever the nation needed a transfer from the Pentagon budget to civilian needs, it is now in response to the coronavirus outbreak. Hundreds of billions of dollars are needed to expand and beef up hospitals and health care facilities, recruit and train new public health workers, immediately retool industries to manufacture tests, masks, protective equipment, ventilators, and all other items needed to address this and future health crises, and provide for the tens of millions of Americans who will be out of work as we try to cut down transmission of the virus. The dollars are available, but the political will needs to be generated. 

In 2018, Marilyn Hewson, CEO of Lockheed Martin, bought her current eight bedroom, 10 1/2-bathroom home for $5.45 million dollars. Sitting on five acres of Virginia land, it features an elevator, media room and gym. She could afford the cost because she makes an annual salary of more than 20 million. That same year, Virginia had an estimated 5,783 experiencing homelessness on any given day. Of that total, 652 were family households, 447 were veterans, 258 were unaccompanied young adults (aged 18-24), and 881 were individuals experiencing chronic homelessness.
Where did Lockheed Martin get the money to pay their CEO two hundred times what they pay the majority of workers? Most of the money came to Lockheed Martin from U.S. taxpayers through the federal budget. Last fall, Congress authorized $738 billion dollars for war, war preparations, new weapons purchases and nuclear weapons upgrades out of a total $1.37 trillion discretionary budget. These funds come predominantly from federal income taxes, 90% of which are paid for by more than 150 million individuals and families. The Pentagon allocation represents more than half of the taxes US taxpayers send to the federal government; it is those dollars that allow the CEOs of major weapons manufacturers to live in mansions while veterans live on the streets.
A general outcome of these budgets is to increase overall income inequality the US, adding to the ranks of the 140 million Americans who are already poor and low-income. Any yet, only a small cut in Pentagon spending would free up enough federal dollars to house every homeless person in the U.S.
Over the past decades, we have witnessed dramatic increases in income inequality, as the average salary of CEOs has risen to three hundred times the average hourly wage of employees (Mishel and Davis). Factors contributing to this undemocratic income distribution include government and corporate efforts to weaken unions, the passage of inequitable tax laws and the gutting of regulatory control over financial institutions and large corporations.
 
Contributing to this growing inequity is the inflated authorization of defense funds to private companies. More than half of the $738 billion defense appropriation will be paid to a limited number of corporations of the military-industrial complex through weapons and military contracts. In 2018, some 150 million Americans paid income taxes, with an average bill of about $10,000. Thus, through the political process of congressional budget authorization, a quarter of the tax dollars contributed by 150 million Americans is  transferred to a small number of large military contractors. As noted recently in Truthdig, the recent threat of war with Iran will only increase their profits.
These corporations use public funds to pay for, among other expenses, outrageously high salaries to their executives. In 2019, the New York Times reported that $23 million went to Boeing’s Dennis Mullenburg; $21.5 million to Lockheed Martin’s Marilyn Hewson; $20.7 million to General Dynamics’s Phoebe Novakovic; and $18.6 million to Honeywell’s Darius Adamcyzk. All of these salaries were more than two hundred times the median salaries of US taxpayers. Though the profits of these corporations and the high incomes of their CEOs don’t all come from federal contracts, these contracts are the single largest contributor.
Income inequity is only one dimension of this war economy. The products of these corporations make very little contribution to the quality of life for most Americans. Ohio Class submarines don’t get us to work, house us, improve our health care, feed us or clean up our environment. If, for example, General Dynamics was building subway and railroad cars at its New London facility, at least those products would raise the standard of living of many Americans. Congressional hawks argue that historically high funding is needed for national defense. In fact, many of their policies and budget line items — such as the proposed $1.7 trillion nuclear weapons upgrades — will decrease national security by increasing the chances of an intentional or inadvertent nuclear exchange.
When President Trump introduced his first federal budget, it had $57 billion dollars cut from some of the nation’s most productive federal programs, such as research within the National Institutes of Health, the National Science Foundation and the Environmental Protection Agency. When asked by members of the National Governor’s Association to justify the cuts, Budget Director Mulvaney was quite clear. As the New York Times reported, “By way of defending such extensive cuts, Mr. Mulvaney said simply that the White House’s priority was military spending and that other reductions were necessary to advance that goal.”
Continuing to appropriate such a large amount of the nation’s public wealth to endless war and a new nuclear arms race is the path to bankrupting the very programs that citizens depend upon for their health, well-being and safety. Our candidates for the presidential nomination need to directly address how they will alter this profound and damaging imbalance in federal spending.
Before there is a possibility of changing these budget priorities, more Americans need to know how their tax dollars are spent. Though the Department of Treasury publishes a very substantial body of literature and information on paying federal taxes, no agency of the government reports back to the taxpayer how their tax dollars are spent. Our experience addressing diverse audiences on this subject is that even engaged and knowledgeable citizens are surprised to learn that half their income tax dollars are going to military accounts.
The Poor People’s Campaign has developed a Moral Budget, which proposes that the nation reallocate hundreds of billions from the Pentagon to programs which could lift 140 million poor and low-income people out of poverty. We need to bring these budget issues into the electoral arena and require that our candidates tell us their budget priorities. We are working to produce a Moral Budget for Massachusetts which would make clear that increases in state funding for housing, education, healthcare, veterans services, biomedical research and environmental protection is a moral requirement in this time.

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 Jonathan King is Co-Chair of Massachusetts Peace Action (MAPA); Maryellen Kurkelos is a MAPA Board member from Fall River MA; Rev. Savina Martin is Co-Coordinator of the MA Poor People’s Campaign: A National Call for Moral Revival.