(December 23) US President Donald Trump signed a huge defense bill on Friday that authorizes $738 billion for fiscal year 2020. The National Defense Authorization Act (NDAA) grants a based budget of $658.4 billion plus $71.5 billion for overseas contingency operations.
As well as granting a 3.1 percent pay increase for troops this year offers the first even paid family leave for all federal workers. The new Space Force is also created but with existing members of the military. However this is the first addition to sister services in 72 years. There has been a $21 billion increase to spending compared to last year.
Lockheed Martin's pricey F-35 jets
A recent article notes: "The Pentagon on Tuesday announced a $34 billion F-35 contract with Lockheed Martin, the largest contract yet for the defense company’s costly fighter program.The deal is for the delivery of 478 of the aircraft."
In April the Pentagon has asked for $57.7 billion to invest in the air section of the military. Then the Defense Dept. had asked for $11.2 billion to purchase 78 F-35 jets. The US Congress added on additional oversight measures but at the same time raised funding in the NDAA to $12.2 billion to purchase a total of 90 F-35 Joint Strike Fighters.
The new defense policy bars delivery of F-35 jets to Turkey after Turkey struck a deal with Russia for defensive missiles as reported by CNN earlier this year: "Two years ago, Turkey declared it would buy Russia's S-400 missile defense system because the United States had dragged its feet in selling an American alternative.But the deal, worth about $2 billion and consummated this week, has consequences far beyond the cost to Ankara's defense budget."
Other aircraft programs
The NDAA budget supports full funding of the requested $1 billion for 48 AH-64E attack helicopters. $2 billion will be spent on 24 Boeing F/A-18E/F Super Hornet fighters and alsol $1.1 billion for 8 Boeing F-15EX jets. The US Congress has also authorized $3 billion towards the long-range stealth B-21 bomber for the US air force. The next US heavy bomber called the Raider will be manufactured by Northrop Grumman.
Navy programs
The Pentagon had requested $34.7 billion for shipbuilding the biggest request in more than 20 years to enlarge and modernize the US Navy fleet. The NDAA supported the construction of three DDG-51 Arleigh Burke-class destroyers, two amphibious ships, a frigate, and three unmanned vessels.
The NDAA maintained that the US had to maintain a minimum of 11 aircraft carriers to protect US interests around the world. The NDAA also supported a plant to purchase 10 Virginia-class attack submarines.
Expenditures for ground combat
There will be $0.6 billion for 131 armored multipurpose vehicles and also $2.2 billion for 165 Abrams tanks. There are also funds to modernize 152 Stryker combat vehicles made by General Dynamics. There is also $249.2 million for Stryker's medium-caliber weapons system.
Spending likely to boost defense stocks
A recent article reports: "Geopolitical uncertainty coupled with a colossal uptick in U.S. military spending could make defense stocks a winning trade once again in 2020. Under the Trump administration, the space has left the broader stock market in the dust. The iShares U.S. Aerospace & Defense exchange-traded fund (ITA) has rallied more than 70% since Nov. 8, 2016. The S&P 500, meanwhile, is up around 50% in that time. This year has been no different. The ITA ETF has surged more than 30% in 2019 while the S&P 500 has gained around 27%."
Previously published in the Digital Journal
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