By Jonathan Wren
In case you haven’t heard, Donald Trump considers himself a master of the deal. This goes beyond just image and speeches – he appears determined to apply his management style in ways previous administrations, and fiscal conservatives, could have never fathomed.
Already, Trump has taken credit for saving hundreds of jobs in the Carrier deal, after negotiating directly with company representatives. And while this deal did not really affect the nation’s finances at large, Trump is reportedly pursuing a better deal for all taxpayers in regard to the F-35 fighter jet after sitting down with the CEO of Lockheed Martin, who later told Politico that they were, “close to a deal” on cutting costs.
President Trump is hardly the first person to notice problems with the F-35. Senate Armed Forces Chairman John McCain has called the program, “both a scandal and a tragedy in respect to cost.” While cost should always be considered when evaluating a government program, perhaps even more worrying is the question of its combat capabilities. In 2008, after two analysts at the RAND corporation underwent a simulation, they declared the new plane, “Can’t turn, can’t climb, can’t run.”
What is different this time is how the new President is approaching the issue – and maybe achieving what others could not. Trump originally took aim at the program back in December, and to prove he is serious about the situation, Trump announced with a Tweet that he was in contact with Boeing to price out a comparable F-18 Super Hornet.
F-35’s unit costs vary from $112.7 to $241.1 million, while the F-18 would cost $70 million a piece. If the Pentagon were to shift their order of 2,443 F-35’s to the F-18, even while using the low-end estimates, taxpayers could save billions.
Lockheed Martin seems to have gotten the message. The chairman of BAE systems, a defense contractor responsible for 10 percent of the F-35’s supply chain, announced Thursday, “We’ve been told through Lockheed that the president has an ambition to reduce the cost of that aircraft by a material amount of money … into double digits.”
This sort of Tweet-driven deal making is not new. Possibly in an effort to dispel the notion that the new Dealmaker in Chief was picking favorites, Trump has also taken fire at Boeing, again through Twitter, regarding the price tag of $4 billion, for the Air Force One program, by exclaiming that the “ridiculous” costs could be avoided if he were to, “Cancel the order!”
Those concerned with government waste might be excited by Trump’s new approach to contract negotiations, but for real changes to be made, Trump’s willingness to take aim at wasteful programs cannot stop at the F-35 and Air Force One. If the president is looking to reassess deals, he should review the rotten deal the American taxpayer have found themselves in with the Pentagon budget at large.
In 2015, the Pentagon received some eye-opening news from their internal waste investigation. The plan found $125 billion in possible savings, but some high-ranking officials chose to bury it out of concerns that the money would be allocated away from the Pentagon in the future.
This plan would have provided a “clear path” for savings, without cuts to military personnel (and, in fact, Trump has called for troop increases on the campaign trail) or to bureaucratic civil servants in the defense department.
While this exact plan may not be the ideal one to implement, it will be hard to target and cut waste as long as opportunities for savings are buried – or never even discovered to begin with. After all, the Pentagon still has not been audited, and “persistent problems” with its accounting have led to the Government Accountability Office recently reporting it cannot even evaluate the federal government’s annual financial report.
What we do know proves that keeping America safe and supporting a bloated bureaucracy are two very different things. The Pentagon employs almost as many desk jobs as active duty troops, and pays the average administrative employee $200,000.
In other words, President Trump is right to take on waste, but he cannot just stop at the waste everyone knows about. Trump has called repeatedly to increase the military budget, but doing so will quickly crowd out his other goals if he does not first find opportunities for savings elsewhere.
President Trump has recently come out in favor of Rep. Thomas Massie and Sen. Rand Paul’s calls to audit the Federal Reserve. Those concerned with government waste and our nation’s security can only hope Trump encourages a similar level of transparency by supporting an audit of the country’s largest bureaucracy.
As Donald Trump said in the Art of the Deal, “The worst of times often create the best opportunities to make good deals.” Staring down $20 trillion in debt, fiscal conservatives should share President Trump’s optimism and hope some good deals result.
Jonathan Wren is the Outreach Manager for the Coalition to Reduce Spending.