Pentagon provided $2.4tn to private arms firms to ‘fund war and weapons', report finds

The Guardian

08-07-2025

A new study of defense department spending previewed exclusively to the Guardian shows that most of the Pentagon's discretionary spending from 2020-2024 has gone to outside military contractors, providing a $2.4tn boon in public funds to private firms in what was described as a 'continuing and massive transfer of wealth from taxpayers to fund war and weapons manufacturing'.
The report from the Quincy Institute for Responsible Statecraft and Costs of War program at Brown University said that the Trump administration's new Pentagon budget will push annual US military spending past the $1tn mark.
That will deliver a projected windfall of more than half a trillion dollars that will be shared among top arms firms like Lockheed Martin and Raytheon as well as a growing military tech sector with close allies in the administration like Vice-President JD Vance, the report said.
The report is compiled of statistics of Pentagon spending and contracts from 2020-2024, during which time the top five Pentagon contractors (Lockheed Martin, Raytheon, Boeing, General Dynamics and Northrop Grumman) received $771bn in contract awards. Overall, private firms received approximately 54% of the department's discretionary spending of $4.4tn over that period.
Taking into account supplemental funding for the Pentagon passed by Congress under Trump's One Big Beautiful Bill Act, the report said, the US military budget will have nearly doubled this century, increasing 99% since 2000.
The rapid growth in military spending that began under the Bush administration's post-9/11 and the Global War on Terror has now been continued on spending to counter China as the US's main rival in the 21st century, as well record foreign arms transfers to Israel and Ukraine.
'The US withdrawal from Afghanistan in September 2021 did not result in a peace dividend,' the authors of the report wrote. 'Instead, President Biden requested, and Congress authorized, even higher annual budgets for the Pentagon, and President Trump is continuing that same trajectory of escalating military budgets.'
That contradicts early indications from Trump in February that he could cut military spending in half, adding that he would tell China and Russia that 'there's no reason for us to be spending almost $1 trillion on the military … and I'm going to say we can spend this on other things.' Instead, the spending bill pushed by Trump through Congress included a $157bn spending boost for the Pentagon.
The growth in spending will increasingly benefit firms in the 'military tech' sector who represent tech companies like SpaceX, Palantir and Anduril, the report said, that are 'deeply embedded in the Trump administration, which should give it an upper hand in the budget battles to come'.
'High Pentagon budgets are often justified because the funds are 'for the troops,'' said William D Hartung, senior research fellow at the Quincy Institute for Responsible Statecraft and an author of the report. 'But as this paper 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. Much of this funding has been wasted on dysfunctional or overpriced weapons systems and extravagant compensation packages.'
'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.
Calculated for inflation, the military spending dwarfs an approximate $356bn that Congress had appropriated for US diplomacy, development and humanitarian aid.
The Trump administration has continued to slash money spent on aid. Last month, the Guardian revealed that a White House review of grants to the state department recommended a nearly-total cut on democracy promotion programs.
The Guardian has contacted the Pentagon for comment.