National Security

Defense Industry, Analysts Expect Major Spending Increase Under Trump

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Thomas Phippen Associate Editor
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Defense industry analysts and weapons makers expect an increase in defense spending one day after President-elect Donald Trump’s victory in Tuesday’s election.

The defense industry also seems to expect an increase in defense spending under Trump. Stocks of the largest defense companies jumped Wednesday after Trump’s win, with several companies gaining more than five points on the New York Stock Exchange.

One analyst predicted defense spending could increase by $136 billion over the next four years, assuming the Republican Congress can remove the mandatory Budget Control Act spending caps.

“Fiscal conservatives will demand deficit/debt reduction, so how this all comes together will depend heavily on other major elements of a reconciliation package and on President-elect Trump’s pledge to improve non-defense infrastructure,” Roman Schweizer, analyst at the Cowen Washington Research Group, said Wednesday. “This will be the key watch issue in the coming months.”

Trump, who promised to end sequestration — the process the Pentagon uses to meet Congress’s budget caps — for the Department of Defense, would have to build 78 ships, including three aircraft carriers, to meet his goal of building a 350-ship Navy fleet with 13 carriers.

Budget caps and spending increases aren’t the only concerns. To build that many ships, Trump’s administration will need to expedite contracting and acquisition within the Department of Defense.

“He is going to need a modern day John Lehman to help him speed up acquisition and show results quickly,” Mackenzie Eaglen of the American Enterprise Institute told the Washington Examiner. John Lehman was former President Ronald Reagan’s secretary of the Navy, and he’s credited with spearheading the monumental effort to build a 600-ship Navy during the Cold War.

Trump’s national defense plan also includes expanding the U.S. Army to 540,000 active duty soldiers, the U.S. Marines to 36 battalions, and providing the U.S. Air Force with 1,200 fighter aircraft.

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