'War and weapons' over welfare? Report exposes Pentagon's $2.4 trillion 'wealth transfer' to private contractors

A new report has painted a stark picture of US military spending: over the past five years, more than half of the Pentagon's discretionary budget has gone to private contractors — a staggering $2.4 trillion — in what is being described as a "continuing and massive transfer of wealth from taxpayers to fund war and weapons manufacturing". The study by the Quincy Institute for Responsible Statecraft and Brown University's Costs of War project, first reported by The Guardian, details how the lion's share of the Pentagon's $4.4 trillion discretionary budget between 2020 and 2024 ended up in the hands of arms makers and defence tech firms.

What did the report find?

As per the report, between 2020 and 2024, the five largest Pentagon defence contractors — Lockheed Martin, Raytheon, Boeing, General Dynamics, and Northrop Grumman — alone secured $771 billion in contracts. Overall, private firms received as much as 54 per cent of the department's discretionary spending.

"High Pentagon budgets are often justified because the funds are ‘for the troops'," said William D. Hartung, one of the report’s authors. However, he explained that as the report shows "the majority of the department's budget goes to corporations, money that has as much to do with special interest lobbying as it does with any rational defense planning." He added that "Much of this funding has been wasted on dysfunctional or overpriced weapons systems and extravagant compensation packages."

The report also projects that the Trump administration's latest Pentagon budget will push overall US military spending past $1 trillion a year. This, despite Trump's early claims that he might slash defence spending, a $157 billion increase was pushed through Congress under his "One Big Beautiful Bill Act," effectively continuing — and even expanding — former president Joe Biden's administration's high defence budget. As per the report, since 2000, the US military budget has nearly doubled – an increase of 99 per cent.

"These figures represent a continuing and massive transfer of wealth from taxpayers to fund war and weapons manufacturing," said Stephanie Savell, director of the Costs of War project.
The report authors say that the US withdrawal from Afghanistan, contrary to the projections, "did not result in a peace dividend". Instead, "President Biden requested, and Congress authorised, even higher annual budgets for the Pentagon, and President Trump is continuing that same trajectory of escalating military budgets.

The report also highlights the sharp difference between what the US' Congress spent on development vs what it spent on defence. When calculated for inflation, the military spending clearly dwarfs the approximate $356 billion spent on diplomacy, development and humanitarian aid.