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US defense spending is on track to top $1 trillion for the first time in history. The industry faces regular cost overrruns and missed deadlines. So why are American weapons so incredibly expensive?
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00:02This is the most expensive weapons system in U.S. history.
00:05Just one of these F-35 fighter jets can cost more than $100 million,
00:10and here it is falling out of the sky.
00:14This specific crash was caused by a refueling mishap,
00:17but any time one of these planes goes down,
00:20millions of taxpayer dollars are lost.
00:22U.S. defense spending will likely top $1 trillion for the first time in 2026,
00:27and for all the money the U.S. government spends on weapons,
00:30it still can't fix them without the companies that built them.
00:33Weapons often cost more than expected,
00:36and they're routinely delivered late.
00:38The goal should be get the best equipment to accomplish the mission
00:42at the lowest cost to taxpayers.
00:45The system that we have by design created does the exact opposite.
00:50But weapon spending wasn't always like this.
00:53So how did we get here?
00:54And why are U.S. weapons so incredibly expensive?
01:03The first military contracts are even older than the Constitution,
01:07and concerns over just how much the country spends on weapons aren't new.
01:12Neither are attempts to put limits on spending.
01:14Let's go back to 1903.
01:16A new in experimental technology pointed to the future.
01:20Orville and Wilbur Wright made man's first four controlled flights in a powered airplane.
01:25And for 12 seconds, the Wright brothers proved that powered flight was possible.
01:30Six years later, after flying 10 miles over Fort Myer in Virginia,
01:34the Wright brothers sold the first military plane to the U.S. government for $30,000,
01:38about $1 million today.
01:41This leap in technology, along with investments in shipbuilding,
01:44helped drive an avalanche of spending when the U.S. entered World War I.
01:49The rush to build came with canceled contracts,
01:51unfinished equipment, and spending that was difficult to track.
01:55In just the first weeks of deployment in 1917,
01:58the War Department signed more than 30,000 contracts worth $7.5 billion,
02:03or nearly $200 billion today.
02:06By the end of the war, the national debt had ballooned
02:09from about $1 billion to over $20 billion.
02:13Congress recognized the need for somebody to kind of be keeping tabs
02:18on all the increased spending that was going on, especially in defense.
02:21Congress created what is now the Government Accountability Office
02:25to scrutinize how defense dollars were being spent.
02:28Shelby Oakley is a director at the GAO.
02:31I would describe GAO as the watchdog of Congress.
02:35They'll give us a mandate to say,
02:36hey, please go take a look at how the Columbia-class submarine program
02:41is being executed and whether or not they're on budget, cost, schedule,
02:45and we're going to get the capabilities we expect.
02:52The same year the GAO started,
02:54Congress also mandated the president provide an annual budget for review.
02:58Weapons spending was getting increasingly expensive,
03:00and Congress stepped in to curb it.
03:02But that spending was about to skyrocket.
03:07Just 11 days after the bombing of Pearl Harbor on December 7, 1941,
03:12Congress passed the First War Powers Act,
03:14granting President Roosevelt the authority to make contracts
03:17without regard to the provisions of law.
03:20Within a month, Roosevelt started converting peacetime industries
03:22to manufacture weapons and military equipment.
03:25This, along with the Second War Powers Act,
03:28made weapons production in World War II incredibly efficient.
03:31In this year, 1942, we shall produce 60,000 planes.
03:40Next year, 1943, we shall produce 75,000 tanks.
03:47Quantity over quality and being able to kind of pivot
03:51and turn to an industrial base to fulfill those needs
03:54was something that we were able to do in World War II.
03:58So you would have car manufacturers building tanks for us.
04:02Even major players like Henry Ford.
04:04In 1941, Ford built a massive facility the size of about 61 football fields outside Detroit,
04:11modeled after the company's speedy assembly lines.
04:15It was called the Willow Run Bomber Plant,
04:17and it could turn out one new bomber every hour.
04:20For the first time, Ford's mass production technique is applied to making bombers.
04:25Streamlined production like Ford's also made aircraft relatively cheap.
04:28A B-17 bomber cost around $200,000 in 1944.
04:33Now, even as we talk about history, I think it'd be helpful to make comparisons to the present.
04:38That $200,000 bomber would be about $3.5 million today, adjusted for inflation.
04:44And that's nowhere near the $80 to $110 million in F-35 costs,
04:49which Lockheed Martin says is the most affordable option to protect U.S. strength.
04:53We just needed a lot of planes and a lot of tanks and a lot of guns, you know, all
04:58the things.
04:59And so that kind of remained over a few decades.
05:03And then we kind of began to transition to more exquisite systems.
05:09As World War II raged on, one of the most famous weapons in U.S. history
05:12was being built at a top-secret laboratory in Los Alamos, New Mexico.
05:16The atomic bomb redefined the limits of military weapons.
05:21Science has profoundly altered the conditions of man's life.
05:25It has extended man's freedom to make significant decisions.
05:30The Manhattan Project marked a massive undertaking.
05:37The total cost was roughly $2 billion in 1945, or about $35 billion in today's dollars.
05:43And while it wasn't the biggest expenditure in the war,
05:46it ushered in a new era of complex development and manufacturing heading into the Cold War.
05:51The efficiency that we saw during World War II had already begun to shift.
05:57Gone were the days of Ford's speedy assembly line of bombers.
06:01By 1957, tensions with the Soviet Union were rising, weapons in the U.S. were getting more complex,
06:06and the USSR had successfully tested its own new weapon, the Intercontinental Ballistic Missile,
06:12capable of traveling more than 3,500 miles with a nuclear payload.
06:17John F. Kennedy even campaigned on a so-called missile gap,
06:20the fear that the Soviet Union was outpacing the U.S. in nuclear weapons.
06:25They made a breakthrough in missiles.
06:27And by 1961, 2, and 3, they will be outnumbering us in missiles.
06:31Well, we found out since then that there wasn't a missile gap at all.
06:34But when spending levels start to dip below or flirt with that 5% annual growth line,
06:42that's when we start seeing what we call threat inflation.
06:45So threat inflation is a way to consciously or unconsciously amplify danger
06:49to build support for higher military budgets.
06:52The leaders of Russia tell us their only concern is the defense of their own nation.
06:56Is this so? Or are they ambitious for world conquest?
07:02You see the reason why we are spending billions of dollars in defense production?
07:07That was just a bunch of rhetoric to goose defense spending.
07:11Wars proved pretty useful in increasing defense spending.
07:19After the collapse of the Soviet Union...
07:21Mr. Gorbachev, tear down this war.
07:27And later, the election of Bill Clinton...
07:29Today, a generation raised in the shadows of the Cold War assumes new responsibilities
07:36in a world warmed by the sunshine of freedom.
07:40It seemed like things were changing.
07:42There was a period where we thought we didn't need to spend as much on defense anymore
07:46because of the Cold War being over.
07:50Enter the Last Supper.
07:52Not this one.
07:53The Last Supper of 1993.
07:56It was essentially a secret meeting led by Defense Secretary Les Aspen
07:59and Deputy Defense Secretary William Perry
08:02with the heads of the nation's top defense contractors.
08:05It was more a message of, you know, kind of consolidate or die
08:09than, you know, go away.
08:12Officials believed that pushing contractors to consolidate
08:15could lower overhead costs and ultimately reduce the budget.
08:18By 1997, the number of major defense contractors had consolidated
08:23from 51 companies to just five.
08:26Lockheed Martin, Raytheon, Boeing, General Dynamics, and Northrop Grumman.
08:33It's essentially a near monopoly situation where you only have a few companies you can go to.
08:38The companies have more bargaining power than they ideally should.
08:42The prices go up and you get a lower quality product.
08:46All those decisions that happened in the 90s have left us now with an industrial base that is very small
08:53and very specialized.
08:56Oftentimes what results is that there's only one or two contractors that can do what we're asking them to do.
09:01With fewer players, defense contracts became less competitive.
09:05A 2022 GAO report showed that 90 percent of missiles come from just three sources
09:10and tracked combat vehicles like the Abrams tank come from just one contractor, General Dynamics.
09:16It's a similar situation with Northrop Grumman.
09:19Northrop Grumman basically has a monopoly today on nuclear weapons delivery vehicles.
09:24If they've cornered the market the way that they have, what incentive do they have to keep their costs down?
09:30Because it's not like another company can take over what they're doing.
09:33You might imagine that this leaves the government in a position of little leverage.
09:42So through the Cold War, weapons got more complex, moving away from the mass production efficiency of World War II.
09:49And then in the 90s, the defense contractor industry saw major consolidation.
09:53This consolidation has led to two main problems.
09:56Inefficiencies in how weapons are made and inefficiencies in how weapons are maintained.
10:02Let's start with how they're made.
10:04To understand just how inefficient and expensive weapons manufacturing in the U.S. can be, we can look to the
10:09F-35 again.
10:10The first development contracts for the fighter jet were commissioned in October 2001, right after the 9-11 terror attacks.
10:17The F-35 program began in earnest while the rubble at ground zero still smoldered.
10:24After 9-11, the main focus wasn't on cost, it was on capability.
10:27The F-35 was designed to do it all — collect and process data, share it across the battlefield, and
10:34replace multiple aircraft with a single system.
10:37That ambitious goal came with trade-offs.
10:39We'd love to have this airplane today, as you would expect.
10:43But the first delivery will be 2008.
10:48That first delivery didn't actually come until 2011, three years after initially promised, and just under 10 years after the
10:55contract was awarded.
10:56In the commercial world, if you're not getting products to market, you're not a company anymore, right?
11:03That's not the case in DOD.
11:05Delays are common across large-scale weapons programs.
11:08A 2020 GAO review of defense acquisition programs found $628 billion in cost overruns and an average delay of more
11:17than two years to deliver on initial capabilities.
11:20F-35s are no exception.
11:22In 2023, F-35s were delivered an average of 61 days past the deadline.
11:28In 2024, delivery delays jumped to an average of 238 days late.
11:36The costs don't stop once a weapons system is delivered.
11:40There's the price of repairs and maintenance, also known as sustainment, which can drag on for decades.
11:46Over time, sustainment can account for about 70% of a program's total costs.
11:50In other words, building weapons is just the beginning.
11:54Keeping them running also adds up.
11:56I'm the sustainment guy right in the middle of sustainment services and support.
12:00There's many reasons in which we got to where we are today, in my opinion.
12:03Paul Saunier is an Air Force veteran and a retired Lockheed Martin engineer who worked closely on the F-35
12:09for decades.
12:10The supply chain component of spares to keep these aircraft flying today is the biggest cost driver.
12:19But I think what you're seeing on the F-35 is just traditional life cycle damage that needs to be
12:24addressed over time.
12:25But this all comes at added cost.
12:28And these problems aren't limited to fighter jets.
12:31Take a look at this, the literal combat ship.
12:34Pretty much nothing about that program panned out the way it was expected to.
12:38The contracts to build these ships were initially awarded to Lockheed Martin and General Dynamics in 2004,
12:44and later to Austell, USA, with the first being delivered in 2008.
12:49The ship was supposed to be a speedy, light, agile new vessel designed to detect mines, sink submarines, and fight
12:56off threats above the water.
12:58But once ships like the USS Freedom started to sail, mechanical failures piled up one on top of the other.
13:04Some ships spent more time in port than at sea.
13:07The problem?
13:07You're designing a system around technologies that you're not even sure are going to pan out or that are going
13:13to work.
13:14And then we start building it before the design is even complete.
13:18So, you know, that can lead to a significant amount of rework necessary.
13:25The literal combat ship was originally meant to cost $220 million per vessel, but ended up costing around $500 million.
13:33Things got so bad that the Navy was forced to begin retiring ships, even as new ones were still being
13:38built.
13:39If you get it right early on in the development of a weapon system, that drives out cost efficiencies over
13:46time.
13:46And you can preposition a lot of spares that are actually could be a waste of money because you didn't
13:50get it right.
13:51You didn't buy the right parts.
13:53There's another challenge in lowering sustainment costs, which goes right back to those initial contracts.
13:58And once again, we can look to the F-35, this time to see how restrictive defense contracts can be.
14:05Contracts don't tend to be publicly available, but a 2025 GAO report highlights that depot level maintainers may not have
14:13data rights that allow government personnel to make repairs without support from the prime contractor.
14:19Essentially, that means the U.S. military doesn't actually own the designs of Lockheed Martin's proprietary technology.
14:25So certain repairs can only be performed by the contractor and not by the military.
14:30Lockheed Martin owns the intellectual property right for the F-35, which means that the government can only go to
14:38Lockheed Martin for very lucrative sustainment contracts to support the F-35.
14:45We can't operate the F-35 without Lockheed Martin.
14:48From 2018 to 2023, the GAO reported that the sustainment estimates for the F-35 increased from about $1.1
14:56trillion to roughly $1.58 trillion.
15:00The overall lifetime cost of the program is estimated to be $2.1 trillion.
15:05And 75% of that is sustainment costs.
15:08The U.S. military plans to buy over 2,400 F-35 aircraft.
15:13There are more expensive U.S. aircraft, but nothing this expensive at this high volume.
15:21So is anything being done to curb military spending today?
15:25There are efforts in Congress to shift the power from contractors to the military itself to make complex repairs on
15:31weapons systems.
15:32This would, in theory, be cheaper and more efficient.
15:35In July 2025, Republicans and Democrats introduced the Warrior Right to Repair Act, which would guarantee the military access to
15:43weapons systems, data and intellectual property.
15:46The last thing our troops should be doing is waiting around for contractors who charge more for slower repairs.
15:54It's giving control back to the military, ultimately back to the American people and taxpayers, that if we buy something,
16:01we should be able to fix it.
16:03U.S. Army veteran and Congressman Pat Ryan serves on the House Armed Services Committee, which oversees the country's annual
16:09defense budget.
16:10When I was serving, I was an intelligence officer.
16:14I deeply believe if we had had better software and hardware, we would have kept alive some of my brothers
16:21and sisters in arms.
16:22Fixing the system could mean getting better equipment to troops, faster and at a lower cost.
16:27But progress has been slow.
16:29Critics of Right to Repair legislation say it could stifle innovation and create safety risks.
16:34In December 2025, members of Congress voted to strip the right to repair provisions from the 2026 National Defense Authorization
16:42Act.
16:43And reform efforts often run into a system that's difficult to change.
16:47Our program office, our United States Department of Defense, we always want to deliver the absolute best for the warfighters
16:54and the peacekeepers. Period.
16:56And because of that, it does drive up costs.
16:59So part of the problem is also intent.
17:01The push from contractors and the DOD to build the most advanced systems possible can make them more expensive, more
17:09complex and harder to maintain.
17:11If they don't deliver rather than giving them more money, let's charge them penalties, for example.
17:17I introduced legislation to do that in the last defense bill and it got blocked by the same sort of
17:23status quo forces.
17:24But we need to continue to push that forward.
17:26The White House is also pushing for reform.
17:29In April 2025, President Donald Trump signed an executive order directing the Pentagon to buy more commercial goods instead of
17:36designing custom products.
17:38And Secretary of War Pete Hexeth announced changes aimed at improving weapons procurement.
17:43The adversary I'm talking about is much closer to home.
17:49It's the Pentagon bureaucracy.
17:52At the same time, Trump has called for raising the U.S. defense budget to $1.5 trillion in 2027.
17:59We're at a really key inflection point where you have newer, younger members of Congress pushing back and really pushing
18:09for finally some systemic change here.
18:16This is my tank crew from 2007.
18:19I keep it here mostly to remind people when, you know, when policymakers in Washington decide to send young Americans
18:27overseas to fight, like, this is who they send.
18:30You know, we were basically kids.
18:32There's very few people in Washington that advocate for the 18-year-old with a rifle.
18:38There's a lot of advocates for the F-35 and for the F-47, the Columbia-class ballistic missile submarine.
18:47As Trump expands military operations around the globe, new wars could burn through resources while adding billions in supplemental defense
18:54spending.
18:55In the first two days of the 2026 strikes in Iran, Pentagon officials estimate U.S. forces used up $5
19:02.6 billion in ammunition.
19:04And as the Pentagon already prepares to spend more than a trillion dollars on defense in 2026, the debate isn't
19:11just about costs.
19:12It's also about how that money is used and whether the system is delivering what it promises to soldiers and
19:19taxpayers.
19:21I think the debate has been set up as a binary choice.
19:24Like, if you love our military and you support our troops, you've got to back this budget.
19:30And if you don't back this budget, you're not a patriot, you don't support our troops.
19:34That is ridiculous.
19:36That should be a bipartisan thing.
19:40And I think we're starting to get there.
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