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Oct 11, 2012


M-L Reifschneider

There is so much government waste yet whenever cuts are suggested,they are always dismissed as being only a drop in the bucket. A lot of drops can fill this bucket of waste.


The usual industry smoke screen. Get this through your head, Ed. The US taxpayer pays 100% of the CEO of Lockheed's $25 million salary. Not $750,000 of it. ALL OF IT! What part of that do you not understand? The same goes for Northrop Grumman. Only Boeing, of all the government contractors, has any significant commercial income.

Danni Downing

Ed, thank you again for your thoughtful comment. We really do appreciate people who care deeply about what we do and that it be done correctly. It’s true that contractor compensation is capped at $763,029 taxpayer-reimbursement (the cap applies to “any contractor employee” with exceptions for scientists and engineers, not just the CEO, per Section 803 of the 2012 NDAA for those who didn’t know about the change), a point that we’ve made time and again in public comments, letters, blogs, and testimony. It’s also true that if sequestration occurs (looking more and more likely), there will be a cut in the Pentagon budget. 10 percent. Of $560 BILLION. Our point in that particular blog was that it was a bit disingenuous of the CEO—who makes many multiples more in compensation than his workers—of a company that receives 90% of its earnings from government contracts (see page 5 of http://www.northropgrumman.com/pdf/2011_noc_ar.pdf) to talk about “affordability” of the average worker. If Northrop Grumman can’t afford however many employees, how can it afford to continue the CEO’s level of compensation? And if he were going to take a pay or benefit cut, that should’ve been the first thing he said, not “hey, workers, write your member of Congress with your concerns about the sequester.”

That said, there are alternatives to across-the-board firings. There are no restrictions from Congress regarding where the DoD has to make cuts in response to sequestration. The Pentagon is profligate with its spending, and waste is rampant. POGO, along with some of its allies, made recommendations for DoD budget cuts that could be relatively painless (see http://www.pogo.org/pogo-files/reports/national-security/ns-wds-20120508-national-security-defense-savings.html). Although some of the recommended cuts may result in job loss, if the project doesn’t meet our national security needs or is a flawed weapons system, the Pentagon shouldn’t be spending money on it.


Your blog misses an important point. The CEO's salary is capped by the OFPP compensation cap and consequently, reimbursement by the government is limited to $763K. The government does not pay the $26 million you mention in the blog. Sequestration will have no impact on the CEO's salary in terms of the amount reimbursed by the government.

I am hardly a defender of defense contractors. But I am a defender of accurate reporting. Sequestration will result in a sudden cut in budget and could have a significant impact if programs are cut. This has nothing to do with the CEO's salary - it is already capped. Sequestration has to do with the government cutting programs due to a sudden reduction in funding. When programs are cut, contractors will be issued stop work orders and employees will be laid off. The CEO continues regardless. Sequestration is about lay offs of employees working on programs that are cut due to a lack of funding.

I really wish that POGO would present the pertient facts and not just the "facts" that make for a good sound bite. The days of POGO conducting in-depth investigations and presenting all the facts are gone. POGO, you really need to take a step back and ask what is your mission and vision.


It takes a Northrop Grumman employee 2 weeks (plus a little overtime) to make as much as their feckless leader makes taking a crap, because that's how much NG values their employees.

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