The Pentagon: $1.4 Trillion and Counting

The Department of Defense commands $1.4 trillion in annual spending — making it the third-largest line item in the federal budget, behind only the Treasury (which handles debt payments) and Health and Human Services. It is, by far, the world's largest military budget, exceeding the next 10 countries combined.

And yet, the Pentagon has never passed a comprehensive audit. Not once. The department that manages $1.4 trillion cannot fully account for where the money goes.

The Budget Trajectory: Always Up

Over the past decade, DOD spending has followed a dramatic arc:

The $2.2 trillion peak in FY2022 included massive supplemental appropriations. But even the “normalized” $1.4 trillion represents significant growth from a decade ago. Adjusted for inflation, real defense spending has increased roughly 20% since 2017.

See full DOD budget data →

The Pentagon's Favorite Companies

Four companies dominate DOD contract spending. Together, they receive over $85 billion per year from the Pentagon alone:

These aren't interchangeable suppliers. Each company has built unique capabilities over decades, often as the sole source for critical weapons systems. The government can't just switch to a competitor — in many cases, there isn't one.

The F-35: A Case Study in Cost Explosion

No program better illustrates the dynamics of Pentagon spending than the F-35 Joint Strike Fighter. It was supposed to be the affordable, multi-role fighter that would serve the Air Force, Navy, and Marines.

The acquisition cost alone has nearly doubled from original estimates. But the real number is the lifetime cost — operation, maintenance, upgrades, and fuel over the program's 60+ year lifespan: an estimated $1.7 trillion. That's a single weapons program costing more than the entire annual defense budget.

“The F-35's lifetime cost of $1.7 trillion exceeds the entire annual defense budget. One program. One company. Decades of cost overruns.”

Could the program have been canceled when costs began spiraling? In theory. In practice, Lockheed strategically placed F-35 production across 45 states, creating jobs — and political constituencies — that make cancellation politically impossible. This is known as “political engineering,” and it's just as sophisticated as the aerospace engineering.

No-Bid Nation: DOD Edition

Sole-source (no-bid) contracts are supposed to be exceptions — used only when there's a single qualified supplier or an urgent need. But at the Pentagon, they're closer to the norm.

The justification is usually “only one responsible source” — meaning only one company can do the work. That's often true for follow-on contracts (maintaining systems that company built) and for classified programs. But it creates a self-reinforcing cycle: the company that wins the original contract becomes the only company that can win future contracts.

Explore our full no-bid contracts analysis →

The Audit That Never Passes

In 1990, Congress passed the Chief Financial Officers Act, requiring all federal agencies to produce auditable financial statements. Most agencies complied within a few years. The Department of Defense — the largest — still hasn't.

The Pentagon's first-ever comprehensive audit was in 2018, and it failed. It failed again in 2019, 2020, 2021, 2022, 2023, and 2024. Each year, the department acknowledges the failure and pledges improvement. Each year, the same result.

To be clear: this doesn't mean $1.4 trillion is being stolen. It means the Pentagon's financial systems are so fragmented, outdated, and poorly integrated that auditors cannot verify where all the money went. There are thousands of systems that don't talk to each other, assets that can't be tracked, and transactions that can't be reconciled.

“Every other federal agency can pass a financial audit. The Pentagon — the one that spends $1.4 trillion — cannot. It has failed every year since its first attempt in 2018.”

Accountability Is Not Partisan

Here's the uncomfortable truth: defense spending increases under both parties. Republicans campaign on a strong military and vote for larger defense budgets. Democrats occasionally push back but ultimately approve similar numbers — often adding their own priorities to the appropriations bills.

Under Obama, the base defense budget rose from $513B to $585B. Under Trump's first term, it went from $585B to $740B. Under Biden, it continued to $886B. The trajectory doesn't change with elections — it just accelerates or decelerates slightly.

Neither party has made DOD pass an audit. Neither party has seriously addressed the industrial base concentration. Neither party has reformed the acquisition process in a way that actually prevents cost overruns. The bipartisan consensus is: spend more on defense, ask fewer questions.

Demanding accountability from the Pentagon isn't anti-military. It's pro-taxpayer. A department that can't account for $1.4 trillion shouldn't be immune from the same scrutiny applied to every other agency.

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