Defense industry lobbying expenditures declined last year, according to new data, but lobbyists remain bullish that a proposed military buildup will bring a new surge as companies jockey to shape policy and influence the appropriations process.
Twenty of the biggest Pentagon contractors spent $108.2 million on lobbying in 2016, or $5.5 million less than a year before, according to a POLITICO analysis of newly released lobbying disclosures.
The dip is being attributed to relatively few major defense policy fights and defense contractors opting against fighting harder to repeal defense budget caps that have been tied up in a larger battle in Congress over taxes and federal spending.
But lobby firms believe President Donald Trump's pledge to increase the size of the military and new talk on Capitol Hill of lifting spending caps could mean a huge boon as defense companies seek to secure extra defense dollars.
They already point to greater government investment last year for space launch services as an example of how more Pentagon funding translates into more rigorous efforts to influence the political process.
Defense lobbyists are making another pitch for more business: The need for companies to devise strategies to deal with any backlash against their programs that Trump may target through his Twitter account.
“I’ve already seen stronger demand than I’ve seen in many years,” said Jeff Green, a defense lobbyist whose clients include Oshkosh, Harris Corp., SpaceX and Palantir. “One path will be covering existing priorities in an increased budget environment; the other is interpreting the moves of a new administration, particularly one that’s not afraid to rattle the cages of troubled major programs.”
Trump has taken aim at the two biggest defense contractors, Lockheed Martin and Boeing, by slamming the cost of the F-35 fighter jet and next-generation Air Force One fleet.
In 2016, Boeing spent the most on lobbying with $17 million. But it also had the biggest year-over-year drop — of $4.8 million — from 2015, when it successfully lobbied Congress to reauthorize the Export-Import Bank.
Lockheed Martin spent the second most on lobbying in 2016 with $13.5 million, or $100,000 less than 2015, according to the new data. Northrop Grumman was third, with $12 million, followed by General Dynamics at $10.7 million and United Technologies at $8.9 million.
And more potential dollars for defense over the coming year are expected to translate into greater lobbying expenditures.
Trump has pledged to convince Congress to repeal the caps on the defense budget, and Senate Armed Services Chairman John McCain (R-Ariz.) has rolled out a plan to boost defense spending by $430 billion over the next five years.
“In the defense world, there’s a perception that there will be dramatic increases to defense spending, so more people will want to play,” said another defense lobbyist, who asked not be named. “And the folks who already are playing will want to fight harder to get a bigger piece of the pie.”
Loren Thompson, a defense industry consultant, predicted lobbying will also spike due to the flurry of defense-related decisions Congress is considering the first half of the year.
"Work on the 2017 budget needs to be completed, funding for overseas contingencies outside the regular budget will have to be approved, and then comes the Trump administration's proposed 2018 budget," Thompson said in an email. "There will also be a push to repeal or modify the Budget Control Act that currently caps defense and domestic discretionary spending. So President Trump's election looks like the 'Full Employment for Defense Lobbyists Act of 2017.'"
The argument that a bigger budget leads to more lobbying has already played out in one defense sector: space.
Companies vying for funding to launch military satellites and build the rocket engines that power them into space ramped up their lobbying after the Air Force last year opened up launches to competition and started developing a new rocket that doesn’t rely on the Russian-made RD-180 engine.
United Launch Alliance and SpaceX, which have battled bitterly over the Russian-made engines, both increased their lobbying spending in 2016 for the fourth straight year.
ULA spent $3.2 million, a $1.8 million increase, the biggest year-over-year growth among any defense contractor. SpaceX spent $1.9 million.
Other companies who are developing an engine to replace the RD-180 also boosted their lobbying spending. Orbital ATK spent $2.4 million on lobbying last year, an increase of $930,000 over 2015, while Aerojet Rocketdyne spent $2 million on lobbying, in increase of $200,000 from 2015.
Originally published in Politico Pro Defense