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: The
Balkan Crisis
Congress approves $15 billion in military spending
War in the Balkansa bonanza for weapons industry
By Martin McLaughlin
22 May 1999
Congress approved a $15.1 billion supplementary spending bill
for the war in the Balkans and other Pentagon operations Thursday,
providing the down payment on what is now expected to be the biggest
bonanza for the US weapons industry since the boom years of the
Reagan administration.
The emergency legislation passed both houses of Congress after
the Senate voted 70-30 to suspend budget restrictions on the new
spending, against the opposition of conservative Republicans who
wanted to cut domestic spending dollar for dollar to pay for the
military expansion.
The $15.1 billion is more than double the $5.9 billion originally
requested by the Clinton administration and the Pentagon to pay
for the costs of the war and the operation of camps for the Kosovar
Albanian refugees through the end of September. Congressional
Republicans added bills for additional Pentagon spending, including
$1.8 billion to move a pay raise for US soldiers from 2000 to
1999, military aid to Jordan, and emergency use of US troops in
the recovery effort from Hurricane Mitch in Central America.
The bill passed the House Tuesday by a vote of 269-158. The
Senate approved it Thursday by 64-36, with clear majorities of
both parties, 32-23 among Republicans, 32-13 among Democrats.
The increase in Pentagon funding is to be paid for out of budget
surpluses supposedly set aside for Social Security. In addition,
the House voted to partially cover the cost of the measure by
eliminating more than $2 billion in social spending, including
$1.2 billion in unspent food stamp funds and $350 million from
the Section 8 low-income housing program.
The war in the Balkans has already proved a windfall for companies
like Boeing and Raytheon, which make cruise missiles (average
price $1.5 million) and other high-tech weapons being expended
by Air Force and Navy planes at a rapid rate. Even better are
the prospects for makers of dumb bombs, which have
not been used at all since the 1991 Persian Gulf War, but are
now being dropped by the thousands onto Yugoslavia.
In a lengthy article on the front page of its business section
May 20, the New York Times pointed to the impact of the
war on the financial fortunes of big defense contractors: Most
of the transports, weapons and ordnance now in use in Kosovo is
equipment no longer actively producedincluding the C-5 transport
plane, the B-2 bomber and the Tomahawk cruise missile. So the
need for new generations of matériel, and the money to
pay for it, represents the best business opportunity in years
for military contractors.
The most hotly contested contract will be the new Joint Strike
Fighter to replace the F-16, made by Lockheed, which is out of
production. Boeing and Lockheed Martin are the two bidders for
what could be $50 billion or more in business, depending on how
many of the NATO countries decide to buy the plane, and whether
the Pentagon authorizes its sale to such US client states as Israel
and Saudi Arabia.
In January Clinton announced the biggest increase in US military
spending since the end of the Cold War, $112 billion spread across
the next five years, bringing the total Pentagon budget to $319
billion by 2005. This does not include Energy Department spending
on the production and maintenance of nuclear warheads. Weapons
procurement will jump from $44 billion in Fiscal Year 1999 to
$53 billion and $60 billion in the next two years.
While congressional Republicans have always been rabidly committed
to the arms industry, House and Senate Democrats have shifted
in that direction as well. Kosovo has definitely changed
things here on defense spending issues, said Duncan Hunter
(R-Calif.) head of the procurement subcommittee of the House Armed
Services Committee. Folks who used to vote to cut defense
massively are now voting to deploy our military more and more.
Even before Kosovo the Clinton administration made far more
extensive use of the American military than its predecessors,
dispatching American troops into foreign operations nearly 50
times in the past six years, compared to 14 military engagements
under the Bush administration.
This has greatly increased the wear and tear on equipment,
creating a backlog in orders which is now hitting the defense
industry. Daniel Burnham, head of Raytheon, maker of the Tomahawk
cruise missile, told the Times, Kosovo underscores
what the industry has been sayingthat we need to get a sustainable
rate of spending. We need to get $60 billion in weapons
outlays. We are now on that path. And we are getting there faster
than we first thought.
See Also:
Wall Street celebrates stepped-up bombing
of Serbia
[4 May 1999]
War in Kosovo hits home
US to boost military spending, activate reservists
[29 April 1999]
War in
the Balkans
[WSWS Full Coverage]
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