FIRST ON FOX: Progressive Sen. Elizabeth Warren, D-Mass., issued extremely rare credit to President Donald Trump for pressuring defense companies to put more money back into building weapons and expanding production rather than returning it to investors and lining stakeholders' pockets.
Warren and Sen. Mike Lee, R-Utah, are urging War Secretary Pete Hegseth to make Trump's restrictions on stock buybacks for defense contractors permanent, according to a letter obtained by Fox News Digital.
The bipartisan duo argue the policy is already changing how major defense companies spend their money and bolstering national security and military readiness.
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"The Pentagon is handing companies billions – and now potentially trillions – of taxpayer dollars," the senators wrote in their letter. "Congress and the Administration must work together to ensure they fulfill their contractual obligations and enhance national security."
They are asking Hegseth to support their Prioritizing the Warfighter in Defense Contracting Act, which would codify central provisions included in Trump's January executive order, like executive incentives being tied to on-time delivery and production improvements rather than short-term financial metrics.
A keystone of the executive action also allows the Pentagon, where law permits, to cap the base salaries of executives at underperforming contractors.
Staff for Warren and Lee reviewed recent earnings calls and financial reports from the top 20 publicly traded U.S. defense contractors.
The offices found that the companies cut buybacks and dividends by $2 billion in the first quarter of 2026, compared with the same period a year earlier, while capital spending rose by $1.2 billion. Capital spending is money companies put into long-term needs such as factories, equipment and new production lines.
Trump’s order directs the Pentagon to identify contractors falling behind on performance, investment or production and, in future contracts, restrict stock buybacks and corporate distributions during periods of underperformance.
The senators’ analysis does not prove that every dollar withheld from shareholders went into those investments, but Warren and Lee argue the trend shows Trump’s policy is pushing defense firms to focus more on building weapons and expanding capacity.
The push comes after years of cost overruns and delays across major Pentagon weapons programs, even as defense contractors reported strong profits and returned billions of dollars to shareholders.
Among four top defense contractors — Lockheed Martin, RTX, Northrop Grumman and General Dynamics — the firms combined buybacks and dividends fell from about $4.2 billion in the first quarter of 2025 to about $2.7 billion in the first quarter of 2026, according to the letter. The reductions were not uniform: RTX’s reported payouts rose slightly year over year, while Lockheed, Northrop and General Dynamics reported declines. This means stakeholders at the top of these firms saw $1.5 billion less, and instead those funds were freed up for ramping up weapon production.
Warren and Lee also pointed to GE Aerospace, which increased its stock buybacks, as evidence that an executive order alone is not enough to stop companies from directing more money to shareholders.
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The senators said key elements of their legislation were included in the Senate’s version of the fiscal year 2027 National Defense Authorization Act.
Fox News Digital reached out to the War Department, Lockheed Martin, RTX, General Dynamics and GE Aerospace for comment, but did not hear back at time of publication.
