Future of U.S. Defense Economy

Report Outline
Pressure to Put Curbs on the Military
Economic Aspects of Military Spending
Means of Adjusting to Reduced Spending
Special Focus

Pressure to Put Curbs on the Military

Defense spending has been subjected in 1969 to more searching criticism than at any time since the cold war began. Attacks on the “military-industrial complex” in Congress and the press destroyed the nearly sacrosanct status formerly enjoyed by Defense Department budget requests. Although the critics failed to make any major dents in the military budget, the challenge they mounted was strong enough to put the Pentagon and its spokesmen in Congress on the defensive—a feat that would hardly have been possible a short while ago.

The outburst against military-industrial predominance coincided with four other developments pointing toward cutbacks in production for national defense: (1) The peace talks at Paris and initial troop withdrawals from Viet Nam focused attention on the economic consequences of bringing the war to an end; (2) plans for a multi-billion-dollar anti-ballistic missile system and other high-priced weapons sharpened interest in getting U. S.-Soviet talks on strategic arms limitation under way; (3) rising pressure for domestic programs to deal with the crisis in the cities established serious competition for dollars now spent on defense; and (4) inflation impelled the Nixon administration to effect certain cuts in the military budget. This multiple threat confronted defense industries, their employees, and their communities with the prospect of major dislocations in the foreseeable, if not the immediate, future.

Revolt Against Military-Industrial Complex

When the Senate on Aug. 6 accepted development of the Safeguard A.B.M. system by a hairbreadth 51–50 vote, it was clear that the cold war tradition of congressional acquiescence in defense budgets was dead. The next day the Senate voted 47–46 to require quarterly Pentagon reports on all major weapons systems contracts and General Accounting Office audits and reports on such contracts. The military procurement authorization bill was soon subjected to a blitz of proposed reductions.