Defense in 2017: Disruption Is the Operative Word

Defense in 2017: Disruption Is the Operative Word
AP Photo/Andrew Harnik, File

The defense industry is buckling up for the roller-coaster ride that is likely to be the Trump administration.

The sector has been stumped by President-elect Donald Trump's morsels of policy stances revealed in tweets over the past month. Shots fired against the F-35 and defense contractors in general — suggesting a broader campaign may be waged against big-ticket military procurements and Pentagon contracting practices — are hard to square with his rhetoric in favor of a bigger Navy, a modernized nuclear arsenal and a stronger military overall. The guessing continues on whether he will be a Reaganesque hawk, a slash-and-burn reformer, or if he will back off from past rhetoric once he is in the Oval Office and must deal with Congress and the world at large. Or all of the above.

An apparent lack of consistency in the incoming president's defense and foreign policy positions so far is creating both anticipation and dread.

The prospect of a president diving into the weeds of defense contracts can be both unsettling and encouraging, depending on who is asked. In the defense industry, many observers have been waiting for Trump to shed light on larger issues that will decide the future of defense spending, such as how he will unclog the fiscal jam that has kept federal budgets under tight caps. They have waited for clues from the president-elect on how he will balance his desire to boost defense against other priorities, and how his advertised tax cuts might drain government resources and possibly derail plans to build up the military.

“I have a positive feeling about things,” says Charles (Chuck) Wald, a retired Air Force general and vice chairman of Deloitte Services. He believes additional scrutiny on defense programs “is probably good.” Wasteful spending by the Pentagon is not “new news,” Wald says. “There are areas that need to be looked at. There is room for improvement on the business side of the Pentagon.”

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