The Department of Defense is in trouble. During U.S. President Donald Trump’s second term, media attention has focused on military parades, high-profile firings, and lectures about haircuts. But since the 1980s, a less acknowledged but just as worrisome development has been progressively undermining the U.S. military: defense acquisition remains stubbornly slow and wildly over budget.

The United States is currently contending with different types of conflict and a wider range of adversaries than it has in the past. To keep up, the Defense Department needs to be as nimble as it is strong or it risks losing its ability to respond to global hot spots and to deter great-power conflict. But despite spending more than $1 trillion on defense, the U.S. military has yet to fully update its capabilities and align its acquisitions with the modern threat environment. It still lags behind China, for instance, in fielding hypersonic weapons and missile interceptors and in mass-producing autonomous technologies such as military robots and drone swarms. In fiscal year 2026, the U.S. military is spending $24.4 billion for Trump’s controversial Golden Dome missile defense system and $3.3 billion for the Sentinel intercontinental ballistic missile program—despite the fact that neither program will strengthen the U.S. ability to deter or prevail in a modern conventional conflict.

Neither the Defense Department nor Congress, which controls the department’s budget, wants to see such inefficient spending. In a rare case of bipartisan consensus, both parties recognize that the United States is paying too much for too little. Even the Trump administration’s so-called Department of Government Efficiency thought that the Defense Department needed to be more responsible with the American taxpayer’s hard-earned dollars, although it severely botched the opportunity for reform by focusing on partisan attacks on programs related to climate change and diversity, equity, and inclusion and succeeding in trimming only 0.59 percent of the Pentagon’s overall budget.

Only Congress, with its legislative authority and power of the purse, can truly improve the Defense Department’s spending habits. But the Pentagon has a role to play, too, especially in how it communicates with Congress. Indeed, in order to ensure that the U.S. military can capably meet tomorrow’s threats—and to free up money to spend on job creation at home—the Pentagon and Congress must meaningfully change how they collaborate and how each one does its job.

THE DEFENSE OLIGOPOLY

In 1993, Secretary of Defense Les Aspin and Deputy Secretary of Defense William Perry hosted leaders of the major U.S. defense contractors for a dinner that has come to be known as “the Last Supper.” At the dinner, the officials signaled to industry leaders that the government would not pursue antitrust action against defense firm mergers. The intent was to preserve key elements of the defense industry at a time of decreasing defense spending, but the messaging ended up driving sweeping consolidations, swiftly shrinking the U.S. defense industry from 51 firms to the so-called Big Five—Lockheed Martin, RTX (formerly Raytheon), Boeing, General Dynamics, and Northrop Grumman—by 1997.

This consolidation has produced a defense industry that is slower, less innovative, less accessible to new market entrants. Today, every major acquisition system, from the F-35 Joint Strike Fighter to the Ford-class aircraft carrier, is over budget or behind schedule. The United States spends approximately three times as much on its defense budget as China does and yet lags far behind China’s defense industrial base in critical categories. China’s navy, for instance, is projected to have 435 ships by 2030 compared with the U.S. Navy’s 297. China is also racing ahead in the production of unmanned autonomous systems and expects to build a staggering one million one-way attack drones this year. The Pentagon, by contrast, hopes to produce approximately 300,000 attack drones in the next several years.

The U.S. defense industry wasn’t always this slow. In 1989, nearly all U.S. defense contractors also enjoyed substantial commercial business, which allowed them to sustain a trained workforce, better integrate commercial innovation, and maintain resilient production capacity less vulnerable to swings in defense spending. Today, however, firms with little or no commercial business make up more than 60 percent of the Pentagon’s major programs by value. As a result, they are slow to incorporate the latest commercial technologies and lack surge capacity and economies of scale. The overall lack of competition has also driven up prices, delayed deliveries, and contributed to job losses, with the defense-related workforce falling from three million in 1985 to 1.1 million in 2021.

Congress’s role in........

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