Lee, Warren Urge Pentagon to Codify Trump’s Successful EO to Cut Defense Waste, Boost Efficiency

WASHINGTON - U.S. Senators Mike Lee (R-UT) and Elizabeth Warren (D-MA) published a bipartisan analysis revealing the success of President Trump's executive order to cut wasteful government spending and boost America's national security by limiting individual defense contractors' stock buybacks in response to how efficiently they deliver on their contracts with the federal government. The senators urged Secretary of War Pete Hegseth to codify this progress into law by supporting their bipartisan Prioritizing the Warfighter in Defense Contracting Act. The legislation will make permanent President Trump's plan to boost efficiency and competition within defense contracting.

"The Pentagon is handing companies billions - and now potentially trillions - of taxpayer dollars," wrote the senators. "Congress and the Administration must work together to ensure they fulfill their contractual obligations and enhance national security."

For decades, defense contractors have consistently fallen short in delivering weapons programs to DoW on time and on budget. In January, President Trump issued an executive order to address this problem, restricting executive pay packages and limiting stock buybacks and dividend payments for defense contractors that don't meet DoW's performance needs and fail to invest in expanding their production capacity.

A new review of the top 20 defense industry's latest earnings calls and financial reports, conducted by the offices of Senators Lee and Warren, reveals that the DoW's signal for accountability is already generating a positive response - and underscores the need for legislation to make the progress permanent.

In the six months since President Trump issued his executive order, each of the four largest defense contractors that engaged in stock buybacks and dividend payouts in the first quarter of 2025 cut them dramatically in the first quarter of 2026. Combined, these four companies - Lockheed Martin, RTX, Northrop Grumman, and General Dynamics - spent $4.2 billion on buybacks and dividends in Q1 2025; during the same quarter this year, they spent only $2.7 billion, a roughly 36 percent drop.

These defense contractors continued to report a strong financial outlook for their shareholders, making clear that this reduction in buybacks did not pose any harm to the companies' underlying business fundamentals.

Despite the executive order - and the success it had in restricting buybacks by the big four contractors - other contractors continued to hand out larger stock buybacks and dividends to shareholders while the companies' capital expenditures declined. For example, GE Aerospace spent $2.3 billion on stock buybacks in Q1 2026, a 21% increase from the $1.9 billion it spent on stock buybacks in Q1 2025.

"These contractors who did not respond to the President's executive order reveal the need for legislation that emboldens the Department to enforce accountability," wrote the senators.

"The latest round of financial reports from defense contractors shows that despite their concerns, defense contractors can afford to prioritize the warfighter and increase investments to improve outcomes and address schedule delays and cost overruns plaguing the Pentagon's weapons systems," wrote the senators.

"Given the findings of our review, we urge your support for codifying the President's executive order into law and ensuring that the order has lasting results," concluded the senators.

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Read the full text of the letter here.

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