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Pentagon has not shown COVID stimulus helps small businesses, says HASC chairman

Rep. Adam Smith: “We remain concerned that COVID relief money isn’t getting to the right people.”

WASHINGTON — The chairman of the House Armed Services Committee said Democratic lawmakers remain opposed to giving DoD more money to help the industrial base. The concern is that DoD has not shown that the funds are helping the companies that truly need it, said Rep. Adam Smith (D-Wash.). 

“We remain concerned that COVID relief money isn’t getting to the right people,” Smith told reporters Oct. 21. 

The Pentagon has estimated it needs an additional $10 billion to $20 billion to reimburse contractors for coronavirus-related expenses and to ensure companies can continue to carry out DoD programs. 

Smith said he is not opposed to helping financially stressed national security contractors, but he suspects a lot of DoD funding “drives up the share prices” of large contractors that don’t really need help. 

“I haven’t seen a linear argument” that directly ties stimulus funding to the rescue of small businesses affected by the pandemic, Smith said. “Large corporations will find a way to gobble it up,” he said. 

As part of a major stimulus bill passed in March, DoD received more than $10 billion, about $1 billion of which was Defense Production Act money to help stressed industries that are critical to national security. Smith said he estimated that DoD has spent $680 million of the DPA money on the industrial base. “But I haven’t seen evidence of how that’s working.”

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