Warren and Lee commend Trump, urge permanent limits on defense contractor buybacks

Progressive Senator Elizabeth Warren and Republican Senator Mike Lee sent a bipartisan letter to Defense Secretary Pete Hegseth, commending President Donald Trump for his executive order that limits stock buybacks by defense contractors during periods of underperformance. They urged the secretary to codify the measure through the Prioritizing the Warfighter in Defense Contracting Act, which would tie executive compensation to on-time delivery and permit the Pentagon to cap salaries at under-performing firms.

Their analysis of the top 20 publicly traded U.S. defense companies found a $2 billion reduction in buybacks and dividends in Q1 2026 compared with the same period a year earlier, while capital spending rose by $1.2 billion. The senators highlighted that combined payouts from Lockheed Martin, RTX, Northrop Grumman and General Dynamics fell from about $4.2 billion to $2.7 billion, freeing funds for production capacity. They noted an exception at GE Aerospace, where buybacks increased, suggesting the order alone may not be sufficient. Elements of the legislation are already included in the Senate version of the FY 2027 National Defense Authorization Act.