American defense contractors can expect to rake in roughly $20 billion from the omnibus government funding bill expected to soon hit President Joe Biden’s desk, according to an analysis by Stephen Semler of the Security Policy Reform Institute.
The bill includes the Additional Ukraine Supplemental Appropriations Act, 2023, which allocates an additional $47.3 billion in aid for Ukraine as it fights off the ongoing Russian invasion. $28.5 billion is set aside for military-related spending, of which at least $20 billion will likely go to defense contractors, according to Semler.
The $47 billion Ukraine aid package will produce an estimated $20 billion in revenue for US military contractors, based on my analysis of the bill text and DoD acquisition trends: https://t.co/5RWNejbYqf pic.twitter.com/CIV7WTDSwE
— Stephen Semler (@stephensemler) December 22, 2022
Nearly $14 billion is allocated for weapons R&D (research and development) and procurement, $9.56 billion for bilateral training and equipment programs and $4.88 billion for U.S. military personnel and operations. Virtually all of the funds from weapons R&D and procurement will go to to defense contractors, along with $4 billion of the bilateral training and equipment funds and more than $2 billion of the U.S. personnel and operations money, according to Semler’s analysis.
The estimated payouts were based on the average amount of annual funding from those categories that goes to contractors.
Defense contractors such as Raytheon and Lockheed Martin have already cashed in big on the Russian invasion of Ukraine. Raytheon produces the Javelin anti-tank missile that has been wildly effective for defense against Russian armor, as well as the Patriot missile defense system, which Secretary of State Antony Blinken announced the U.S. would provide to Ukraine on Wednesday. That system costs approximately $1.1 billion.
Lockheed Martin, on the other hand, was recently awarded a $500 million contract to send more HIMARS to Ukraine. (RELATED: ‘Your Money Is Not Charity’: Zelenskyy Thanks Biden For Billions In New Aid During Congressional Address)
The State Department announced $1.85 billion in new defense aid for Ukraine on Wednesday, which includes the Patriot defense systems. There appears to be continued bipartisan support for supplying military aid to Ukraine into 2023, even as Republicans take control of the House of Representatives in January.