Magazine article National Defense

Trump Plans Could Harm Service Contractors

Magazine article National Defense

Trump Plans Could Harm Service Contractors

Article excerpt

* Spending on defense contractor services could fall victim to other priorities after President-elect Donald Trump takes office, according to industry insiders.

Trump called for massive national infrastructure upgrades that have been estimated to cost as much as $ 1 trillion.

"It really sets the context for being able to afford" other programs, said Rich McFarland, head of one of the research teams that helped put together the Professional Services Council's latest "Vision Federal Market Forecast."

On the campaign trial, Trump vowed to cut taxes and not reduce entitlement spending, which continues to grow.

Meanwhile, many economists expect modest economic growth in the coming years, which will limit tax revenues, noted Lou Crenshaw, who led PSC's macroeconomic/DoD topline forecast research team.

Budget constraints could force difficult choices even if Pentagon spending caps are eased or lifted, he said. "The economy is going to have to improve before we're really going to be able to have a significant number of dollars to do the things that the president-elect would like to do with the Defense Department."

The businessman's defense spending blueprint would cost approximately $640 billion per year, about $80 billion more than President Barack Obama called for in the coming years, according to projections by the Center for Strategic and International Studies.

To make room in the budget for high-priority spending, the new administration might view contractor services as an area where cuts could be made, Crenshaw said. …

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