Despite the United States withdrawal from Afghanistan in 2021 and the scaling back of the “War on Terror,” Pentagon spending and contractor revenues have continued at extremely high levels, due in large part to the military’s focus on China as the new national security challenge. The U.S. arms industry has also profited enormously from the surge in foreign arms sales tied to the wars in Ukraine and Gaza. From 2020 to 2024, the last five-year period for which full statistics are available, private firms have received $2.4 trillion in contracts from the Pentagon, approximately 54% of the department’s discretionary spending of $4.4 trillion over that period. During those five years, $771 billion in Pentagon contracts went to just five firms: Lockheed Martin ($313 billion), RTX (formerly Raytheon, $145 billion), Boeing ($115 billion), General Dynamics ($116 billion), and Northrop Grumman ($81 billion). By comparison, the total diplomacy, development, and humanitarian aid budget, excluding military aid, was $356 billion. In other words, the U.S. government invested over twice as much money in five weapons companies as in diplomacy and international assistance.Record arms transfers have further boosted the bottom lines of weapons firms. These companies have benefited from tens of billions of dollars in military aid to Israel and Ukraine, paid for by U.S. taxpayers. U.S. military aid to Israel was over $18 billion in just the first year following October 2023; military aid to Ukraine totals $65 billion since the Russian invasion in 2022 through 2025.Additionally, a surge in foreign-funded arms sales to European allies, paid for by the recipient nations − over $170 billion in 2023 and 2024 alone − have provided additional revenue to arms contractors over and above the funds they receive directly from the Pentagon. This year’s military budget will continue to deliver a windfall to military contractors. Recently-enacted legislation pushes annual U.S. military spending beyond the $1 trillion mark. The trends of the past five years follow a major increase in Pentagon spending over time. Annual U.S. military spending has grown significantly this century. The Pentagon’s discretionary budget — the annual funding approved by Congress and the large majority of its overall budget — rose from $507 billion in 2000 to $843 billion in 2025 (in constant 2025 dollars), a 66% increase. Including military spending outside the Pentagon — primarily nuclear weapons programs at the Department of Energy, counterterrorism operations at the Federal Bureau of Investigation (FBI), and other military activities officially classified under “Budget Function 050” — total military spending grew from $531 billion in 2000 to $899 billion in 2025, a 69% increase. Legislation passed in early July 2025 adds $156 billion to this year’s total, pushing the 2025 military budget to $1.06 trillion. After taking into account this supplemental funding, the U.S. military budget has nearly doubled this century, increasing 99% since 2000. The shape of what President Eisenhower called the “military-industrial complex” is shifting as military technology companies are being awarded an increasing share of the Pentagon budget and gaining political power. The military-industrial complex involves the collaboration of the uniformed military and the arms industry in promoting spending that serves their bureaucratic interests and corporate bottom lines, often independently of or in contradiction to considerations of America’s actual security needs. Today, the tools of influence used by the arms industry are consistent — lobbying, millions in campaign donations, the revolving door, and others — but they are also expanding. One of the latest trends, for instance, is that Pentagon officials are now going on to work for venture capital firms investing in new military tech. What remains the most important issue is whether U.S. national defense strategy is aligned with the actual security environment the U.S. faces. The current cover-the-globe strategy, which stresses a quest for military dominance and the ability to intervene anywhere on the globe in short order — has not served the U.S. well in this century. The question is whether the U.S. can have a reasoned national debate on a new defense strategy that is not distorted by the influence of the wealthy weapons sector.
