Warren, Deluzio Pressure Bessent to Limit Stock Buybacks By Defense Contractors

Warren, Deluzio Pressure Bessent to Limit Stock Buybacks By Defense Contractors

"Americans deserve a defense industry that prioritizes innovation and competition to help the U.S. military protect Americans, rather than one focused on shoveling more money out the door for shareholders and executives."

Text of Letter (PDF)

Washington, D.C. - Today, U.S. Senator Elizabeth Warren (D-Mass.) and Representative Chris Deluzio (D-Pa.) pressured Secretary of the Treasury Scott Bessent to follow through on his public statements by pushing defense companies to limit stock buybacks and increase research and development spending.

Earlier this fall, Secretary Bessent spoke at CNBC's "Invest in America Forum" about his plans for American industrial policy amid China's dominance over the production of technology and minerals, stating, "I do think our defense companies are woefully behind in terms of deliveries. So, we may have to -- as their biggest customer may have to prod them to do a little more research, do a little few [sic] stock buybacks."

"We agree with your views that defense companies should spend less on stock buybacks and I look forward to a potential partnership in working together with you and the Trump Administration on these issues," wrote the lawmakers.

In recent years, stock buybacks in the defense industry have increased while research and development expenditures have declined. Despite raking in billions of dollars in profit and cash flow from 2021 to 2024, the top four defense contractors, Lockheed Martin, RTX Corporation, General Dynamics, and Northrop Grumman, spent a combined total of $89 billion on stock buybacks.

"DoD pays an exorbitant amount of money to defense contractors each year. Contractors should be prioritizing investments in research, development, and their workforce to help strengthen America's innovation," continued the lawmakers.

During the first Trump Administration, the Department of Defense (DoD) committed to prohibiting progress payments to contractors during the COVID-19 pandemic from going towards buybacks or dividends. The lawmakers note that this helped protect national security and prevented billions of taxpayer dollars from being used on stock buybacks.

"Americans deserve a defense industry that prioritizes innovation and competition to help the U.S. military protect Americans, rather than one focused on shoveling more money out the door for shareholders and executives," the lawmakers concluded.

Senator Warren has fought to limit stock buybacks by giant companies that received taxpayer money:

• In June 2025, Senator Elizabeth Warren sent a letter to defense contractors criticizing lobbying for tax breaks and asked for information on how funds would impact stock buybacks.
• In July 2024, Senator Warren urged Commerce to use its full statutory authority to prevent CHIPS funding from going to stock buybacks.
• In February 2024, Senator Warren and Representative Casten (D-Ill) sent a letter to the President and CEO of BAE Systems, the first CHIPS Act award recipient, expressing concerns over BAE Systems' history of engaging in massive stock buyback schemes and urging BAE to refrain from engaging in stock buybacks for the duration of its CHIPS Act grant.
• In July 2023, Senator Warren and Representative Deluzio sent a letter to defense contractors on how retroactive tax breaks would impact their stock buyback plans.
• In February 2023, Senators Warren, Tammy Baldwin (D-Wisc.), Bernie Sanders (I-Vt.), Ed Markey (D-Mass.) and Representatives Sean Casten (D-Ill.), Bill Foster (D-Ill.), Jayapal, and Jamaal Bowman (D-N.Y.) sent a letter to Michael Schmidt, Director of the CHIPS Program Office, calling on Commerce to use its full authority to prevent funds from CHIPS and Science Act from being used to directly or indirectly subsidize corporate stock buybacks.
• In October 2022, Senators Warren, Baldwin, Chris Van Hollen (D-Md.), and Representatives Casten, Bowman, Jayapal, and Foster sent a letter to Secretary Raimondo, urging the Commerce Department to strengthen and enforce critical protections against the abuse of funds provided CHIPS Act for stock buybacks and promising continued Congressional oversight over the Department's implementation of its commitments.
• In September 2022, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren raised concerns about the need to protect CHIPS Act funds from being used by semiconductor companies to line the pockets of corporate executives instead of investing in strengthening supply chains, creating good union jobs, and bringing down prices for consumers.
• In June 2022, Senators Warren and Sanders and Representative Casten sent a letter to congressional conferees stressing the importance of strong guardrails to ensure that funding for the CHIPS Act is invested in workers and communities as intended, instead of enriching corporate executives.
• In May 2020, Senator Warren warned DoD about the profiteering risks of pandemic policies to benefit defense contractors.

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