Trump’s Small Change

Why U.S. Defense Spending Will Continue to Muddle Through

An F-18 fighter jet lands on the USS Carl Vinson aircraft carrier in South Korea's East Sea, March 2017. Kim Hong-ji / Reuters

The aerospace and defense industries are optimistic that President Donald Trump will follow through on his campaign promises to rebuild the U.S. military—the first sign of which was a modest defense spending increase in Trump’s first budget request. A sampling of recent industry headlines captures the mood: “Trump Victory Puts Rocket Under Global Defense Stocks”; “The Trump Effect: Tweets Aside, U.S. Defense Stocks Are Booming”; “Defense Stocks Soar Despite Tough Talk from Trump.” Combined with Trump’s unprecedented personal involvement in specific Pentagon acquisition programs, defense watchers are surely in for a wild four years. Yet peeling back the surface layer of tweets and canned speech lines reveals a more sobering outlook for the defense industry. Although Trump is new to Washington, the larger federal budget dynamics are still the same.

The current outlook for the U.S. defense budget is middling with a chance of

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