$76 billlion of proposed $716 billion defense budget to be spent on classified spending

The proposed defense budget for 2020 is $716 billion an increase of about 5 percent from 2019 to 2020 or nearly 11 percent of the requested funds. This amounts to about $76 billion.

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Few details given about classified spending

Naturally military officials say they cant talk about issues such as spending on classified aircraft, space, and missile projects lest this provide an advantage to America's enemies. However some critics such Adam Smith, the Chair of the House Armed Services Committee complain that the secrecy leads to excessive but hidden spending, lack of oversight, waste, and lowering of public trust about how taxpayer money is spent.

Yet one group does talk about US government classifieds spending: "But there is one group of people talking about classified spending: the executives of America’s largest defense firms. In recent months, what defense contractors call “restricted” projects have become a hot topic on quarterly earnings calls with Wall Street analysts. Firms also tout the increase in classified contracts in annual reports and regulatory filings." While the executive and corporate reports do not disclose details of these "restricted" projects they feature in quarterly earnings calls by Wall Street analysts. Companies also tout any increases in classified contracts in their annual reports and even regulatory filings.

Firms boast about getting classified contracts

Raytheon's 2018 annual report boasts about record classified bookings of almost $7 billion a hike of 46 percent in just one year and representing a full 19 percent of company total revenues. As a recent article notes: "U.S. weapons maker Raytheon Company (RTN.N) reported better-than-expected third-quarter profit on Thursday and raised its full-year earnings and sales outlook, helped by higher demand for space programs, weapons and missile warning systems."

Northrop Grumman's 2018 annual report attributes part of a $1 billion increase in its Aerospace Systems division revenue to a higher sale of restricted manned aircraft sales. Northrop is building a new stealth bomber for the US Air Force a highly classified program.

US secrecy is increasing

A recent article notes: "Since the National Defense Strategy, the one that predicted great power competition, came out last year, there’s been more secrecy around what the Pentagon is up to, so not to clue China or Russia in on weapons projects. This seems increasingly the case when it comes to space, aircraft, and intelligence-related work."

Vice Admiral Stuart Munsch deputy chief of naval operations notes at a September news conference the response to China and Russia as strategic competitors:“As a result of that, we are restoring some behaviors that used to be second nature to us when we did have have a comprehensive adversary before. I think increasingly you’ll see that we are more guarded in talking about our capabilities and our intentions simply because any revealing of those things is exploited by potential adversary.”

President Trump is encouraging less transparency as well: "President Trump, in a nationally televised Cabinet meeting on Wednesday, instructed acting Defense Secretary Patrick Shanahan to withhold classified battlefield reports from inspectors general, a move that brought objections from transparency advocates." Given the position of Trump one cannot expect military officials to cut down on the number of classified projects but to classify more in order to avoid scrutiny by watchdogs.

However, William Hartung, who directs the Arms and Security Project of the Center for International Policy is critical of increased classification. Hartnung claims that increasing classification of defense projects makes it almost impossible to have any independent assessment of whether spending on projects makes sense or is efficient. There is a tendency to keep projects flowing with fewer controls internally than used to be common. Classification Harnung claims should be used sparingly and not become a cover for ill-conceived investments.

Previously published in the Digital Journal