Follow us on social


Tax burden from the Pentagon budget authorized by the NDAA wipes out COVID stimulus payments

Despite widespread calls to modestly reduce the Pentagon's overflowing coffers to confront other priorities during a pandemic, Congress carries on with business as usual.

Analysis | Reporting | Washington Politics

Bipartisan majorities in the House and Senate this week approved a $740 billion national defense authorization bill (NDAA), setting up negotiations for a final version, which will almost certainly pose a major boon for defense contractors, passing along a tax bill that by comparison more than wipes out the average tax filer’s COVID-19 stimulus check.

The extent of the NDAA’s historical financial benefit to defense contractors is staggering, with, for example, over half of the 2019 total defense-related discretionary spending — $370 billion of $676 billion — going to contractors, according to Brown University’s Costs of War Project. 

Assuming this pace continues, the 2021 NDAA could pass along more than $370 billion to defense contractors, many of whom have contributed generously to politicians, like Rep. Rob Wittman (R-Va.), the top recipient of defense contractor campaign contributions in 2018, who authored a recent op-ed making “The Case for Robust Defense Spending.”

On the other side of the aisle, Democrats who voted against an amendment to cut the military budget by 10 percent received 3.4 times as much in campaign contributions from the defense industry than those who voted for the amendment.

The NDAA and its windfall for defense contractors is particularly troubling amid the COVID-19 pandemic which has, in addition to the public health crisis, caused economic turmoil, record unemployment levels, and federal efforts to inject liquidity into financial markets.

In March, the government sought to buoy the economy and blunt the economic impact of the pandemic with “Economic Impact Payments,” more commonly known as “coronavirus stimulus payments.” According to CNBC, the average payment was $1,809 per tax filer, which could be individuals or married couples filing jointly.

The long-term benefits of that payment to tax filers are dwarfed by the costs imposed on taxpayers by the defense budget and payments to defense contractors that Congress authorized in this year’s NDAA.

The IRS anticipates 155.1 million tax returns to be filed in 2020, meaning the cost of the upcoming NDAA will be, on average, $4,711.11 per tax filer, completely wiping out the stimulus payment and imposing an additional $2,902.11 burden per filer.

Just the portion of the NDAA destined for defense contractors, $370 billion or $2,385.55 per average tax filer, wipes out the average stimulus payment and imposes a $576.55 tax burden per filer.

Even the potential Senate Republican-led second stimulus proposal won’t fully unburden taxpayers from the NDAA’s massive discretionary spending on the military and defense contractors. The proposed legislation would include a $1,200 stimulus check to some Americans. That payment, combined with the average $1,809 payment from the March stimulus, would cover the average tax filer’s portion of the NDAA costs benefiting defense contractors but would still leave them with a $1,702.11 financial burden from overall annual defense spending.

Of course, the immediate cost per-tax filer might be deferred via deficit spending, but the national debt currently exceeding $26 trillion — over $167,000 per anticipated 2020 tax filer and over $80,000 per U.S. citizen — should raise questions about the role of the defense budget, which is the second largest category of federal spending after social security, and represents more than half of the discretionary budget. Moreover, U.S. defense expenditures exceed the annual combined defense spending of China, India, Russia, Saudi Arabia, France, Germany, the U.K., Japan, South Korea, and Brazil.

That levies a large bill on taxpayers, either in immediate taxes or assumed portion of the national debt, but Lockheed Martin President James D. Taiclet was decidedly upbeat on a July 21 earnings call, in which he beamed that “our portfolio was supported” in the NDAA. He said:

"[There are] encouraging elements for our portfolio is [sic] the Senate version confirmed that the national defense strategy remains the roadmap for the armed services. And the bill was passed with strong bipartisan support. Our portfolio was well supported in the Senate version for the recommended increase of 16 F-35 aircraft above the President's request, additional funding for missile defense priorities including an 8 THAAD battery and increased funding for the Homeland Defense Radar Hawaii program. Congress will continue with the authorization and appropriation spaces. We look forward to the finalization of the process in supporting our warfighters needs."

While the “warfighters needs” are arguably not supported from a combination of endless wars in the Middle East, a ballooning national debt burden at home, and a pandemic that’s spurring unemployment levels to rise over 10 percent, there are at least two beneficiaries from the NDAA: politicians who rely on defense contractor campaign contributions and defense contractors who see “encouraging elements” for their “portfolio” from the industry’s $2,385.55 annual burden on each tax filer.

Photo: bgrocker/
Analysis | Reporting | Washington Politics
Menendez's corruption is just the tip of the iceberg

U.S. Senator Robert Menendez (D-NJ) looks on, following his bribery trial in connection with an alleged corrupt relationship with three New Jersey businessmen, in New York City, U.S., July 16, 2024. REUTERS/Brendan McDermid

Menendez's corruption is just the tip of the iceberg


Today, Sen. Robert Menendez (D-N.J.) became the first U.S. senator ever to be convicted of acting as an unregistered foreign agent. While serving as chair of the Senate Foreign Relations Committee, Menendez ghost-wrote a letter and approved arms sales on behalf of the Egyptian regime in exchange for bribes, among other crimes on behalf of foreign powers in a sweeping corruption case. An Egyptian businessman even referred to Menendez in a text to a military official as “our man.”

In a statement, U.S. Attorney Damian Williams said Menendez was engaging in politics for profit. "Because Senator Menendez has now been found guilty, his years of selling his office to the highest bidder have finally come to an end,” he said.

keep readingShow less
What will Vance do for Trump's foreign policy?

USA TODAY NETWORK via Reuters Connect

What will Vance do for Trump's foreign policy?

Washington Politics

Donald Trump announced earlier today that he had selected Ohio Sen. J.D. Vance to be his running mate. Coming only two days after the assassination attempt on the former president in Butler, Pennsylvania, Trump’s selection elevated the young first-term senator to the Republican national ticket as the party’s national convention was getting underway in Milwaukee. In choosing Vance, Trump seems to have ignored pressure from Rupert Murdoch, who had reportedly been lobbying intensively in favor of North Dakota Gov. Doug Burgum and against Vance. Trump has chosen a loyalist who will appeal to his core supporters in the party’s populist wing.

While the selection makes sense in terms of the senator’s political alignment with Trump, it is somewhat unconventional given Vance’s limited experience in government. Vance will be the youngest vice presidential nominee since Richard Nixon in 1952. He has been in elected office for only a year and a half. Vance will likely face a lot of questions about his preparedness to serve as president if necessary.

keep readingShow less
States should let the feds handle foreign influence

The Bold Bureau /

States should let the feds handle foreign influence

Washington Politics

In April, a state bill in Georgia aimed at clamping down on foreign influence landed on the desk of Governor Brian Kemp.

Presented under the guise of common-sense legislation, the bill was more reminiscent of McCarthyism; if passed, it would have required workers of foreign-owned businesses such as Hyundai, Adidas, or Anheuser-Busch in Georgia to register as foreign agents, placing a huge burden on everyday Americans.

keep readingShow less

Israel-Gaza Crisis



Subscribe now to our weekly round-up and don't miss a beat with your favorite RS contributors and reporters, as well as staff analysis, opinion, and news promoting a positive, non-partisan vision of U.S. foreign policy.