In five years, from 2020 to 2024, private firms received $2.4 trillion in contracts from the Pentagon, approximately 54% of the department’s discretionary spending of $4.4 trillion over that period.
During these five years, the U.S. government invested over twice as much money in five weapons companies as in diplomacy and international assistance. Between 2020 and 2024, $771 billion in Pentagon contracts went to just five firms: Lockheed Martin ($313 billion), RTX (formerly Raytheon, $145 billion), Boeing ($115 billion), General Dynamics ($116 billion), and Northrop Grumman ($81 billion). By comparison, the total diplomacy, development, and humanitarian aid budget, excluding military aid, was $356 billion.
Annual U.S. military spending has grown significantly this century, as has the portion of the budget that goes to contractors: While 54% of the Pentagon’s average annual spending has gone to military contractors since 2020, during the 1990s, only 41% went to contractors.
U.S. military spending, including funding for the Pentagon and military activities funded by other agencies, had risen from $531 billion in 2000 to $899 billion in 2025, in constant 2025 dollars. However, legislation approved in July 2025 adds $156 billion to this total, pushing annual U.S. military spending to $1.06 trillion. Taking these supplemental funds into account, the U.S. military budget has nearly doubled this century, increasing 99% since 2000.
The report also analyzes the tools of influence used by the arms industry — lobbying, millions in campaign donations, the revolving door, and others — that are expanding. As of 2024, there were 950 lobbyists hired by the arms industry — 220 more than in 2020 – helping to shape policy and increase military spending.
Thomas J. Watson Jr. School of International and Public Affairs
8 July 2025
Source: watson.brown.edu