If Democrats Rise, Will The Defense Sector Fall?

Issue Brief

Here’s a portent. With midterm elections barely a week away, there isn’t a single state in the union where a Republican challenger seeking a seat in the House of Representatives is leading a Democratic incumbent in the polls. On the other hand, about 50 seats currently held by Republicans seem to be in play. It looks like the Democrats will win the House, and maybe the Senate too.

That could be a good thing not just for Democrats, but also for Republicans and the whole political system. The Republican Party needs to get reacquainted with the political mainstream before 2008 presidential elections, and voters need to get reacquainted with the Democratic Party. The Republicans will discover a country where people care more about rising healthcare costs than tax cuts and traditional values. The voters will discover a Democratic Party still dominated by liberals who don’t understand economics.

But since the outcome of midterm elections seems likely to turn on matters of war and peace, perhaps it is of more immediate importance to ask what a Democratic Congress might mean for the defense sector. If Nancy Pelosi’s apparent determination to deny Jane Harman the chairmanship of the House intelligence committee to appease the Black Caucus is any indication, Democratic control is not going to be good news for those who believe in competent oversight of the national-security apparatus. Republicans trying to build a case that Democrats aren’t serious about security will use any bypassing of the uniquely qualified Harman as “Exhibit A” in their argument that for Democrats, it’s all about politics rather than protecting the nation.

That argument gets a further boost from research on defense spending trends released by Merrill Lynch in September. Although Democratic presidents oversaw the biggest military spending surges of the last century, analysts Ron Epstein and Stephanie Hwang found that since 1976 Democratic control of the government has been a powerful predictor of declines in defense outlays. According to their research, 76% of the rise and fall in defense spending is traceable to which party controls the Senate and the White House (control of the House didn’t make much difference).

Since they were doing equity research, Epstein and Hwang defined defense spending only as money going to military research and procurement — so it is conceivable Democratic control could still bring a rise in outlays for personnel. However, in past defense downturns, weapons outlays have tended to be a leading indicator of broader defense spending trends, and the Merrill Lynch analysts predict that the highest level of weapons outlays likely in a Democratic administration would fall below the lowest levels seen in a Republican administration.

Besides, as research released earlier this year by the Center for American Progress and Lexington Institute revealed, the U.S. military arsenal has grown so decrepit with age that any broad cut in weapons outlays will be likely to reduce readiness. Some Air Force tankers are nearly twice the age of the pilots flying them, and many Army vehicles are too worn out to repair. If Merrill Lynch is right, though, a Democratic Congress is no panacea for these problems.