Warren, Lee Publish New Bipartisan Analysis Revealing Progress on Limiting Defense Contractor Stock Buybacks, Urge Pentagon to Support Codifying Reforms in Law

Six months after Trump’s executive order (EO), the four largest defense contractors cut buybacks and dividend payouts dramatically — but some contractors refused to abide by EO, underscoring need for a bill Lawmakers introduced bipartisan Prioritizing the Warfighter in Defense Contracting Act to codify reforms into law “The Pentagon is handing companies billions – and now potentially trillions – of taxpayer dollars. Congress and the Administration must work together to ensure they fulfill their contractual obligations and enhance national security.” Text of Letter (PDF) Washington, D.C. — U.S. Senators Elizabeth Warren (D-Mass.) and Mike Lee (R-Utah) published a new bipartisan analysis revealing the success of recent efforts to restrict defense contractor stock buybacks and urged Secretary of Defense Pete Hegseth to codify this progress into law by supporting the lawmakers’ bipartisan Prioritizing the Warfighter in Defense Contracting Act. The lawmakers introduced the bill following President Donald Trump’s Prioritizing the Warfighter in Defense Contracting executive order, which restricts companies’ stock buybacks and distributions if they are not meeting the Department of Defense’s (DoD) performance needs. “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 DoD 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 DoD’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 Warren and Lee, reveals that the DoD’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 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. In March, Senator Warren and Josh Hawley (R-Mo.) introduced the bipartisan Prioritizing the Warfighter in Defense Contracting Act , new legislation that would codify President Trump’s executive order, ensuring that America’s defense needs are prioritized over contractors’ bottom lines. “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. Senator Warren has had longstanding concerns over potential conflicts of interest, revolving door abuse, and national security concerns in DoD’s acquisition process: In August 2026, Senator Elizabeth Warren (D-Mass.) wrote to the Inspector General of the Department of Defense (DoD), asking for an investigation of recent reports of $3.2 billion in government awards flowing to over a dozen companies with ties to President Trump’s sons. In July 2026, Senator Elizabeth Warren (D-Mass.) grilled Deputy Secretary of Defense Stephen Feinberg and Director of OSC David Lorch on the DoD’s new initiatives to populate a new contracting office with finance, tech, and defense industry insiders — and offering them government paychecks of up to $438,000 annually. In July 2026, Senator Elizabeth Warren (D-Mass.) pressed Deputy Secretary of Defense Stephen Feinberg about conflicts of interest in his overseeing Golden Dome contracts going to companies tied to the private equity firm he founded, Cerberus. In June 2026, Senator Elizabeth Warren (D-Mass.) pressed DoD on the potential conflicts of interest surrounding lucrative DoD loans and deals following reporting that the White House allegedly intervened to secure an OSC loan to a Trump Jr.-backed company. In June 2026, Senator Elizabeth Warren (D-Mass.) pushed for a provision in the fiscal year 2027 NDAA prohibiting OSC from making equity investments in companies where the President, Vice President, Cabinet members, other executive officers with a role in investment decisions, and their families hold a stake. In March 2026, Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) introduced the bipartisan Prioritizing the Warfighter in Defense Contracting Act of 2026 , new legislation that would limit stock buybacks and excessive executive compensation in defense contracting. This follows after President Trump issued an executive order with similar directives to promote increased investments to meet the needs of our service members. In March 2026, after DoD failed to provide answers to the vast majority of questions in her January letter, U.S. Senator Elizabeth Warren (D-Mass.) pressed DoD and OSC on the processes in place to ensure that DoD contracts and loans are being fairly awarded to companies. In January 2026, U.S. Senator Elizabeth Warren (D-Mass.) raised concerns about DoD and OSC handing out loans and contracts to companies with ties to the Trump family. In September 2023, U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to Heidi Shyu, Under Secretary of Defense for Research and Engineering at DoD, reiterating her request for increased transparency from OSC and seeking clarification on how DoD is interpreting ethics restrictions. In July 2023, U.S. Senator Elizabeth Warren (D-Mass.) raised concerns that DoD’s OSC hired private sector individuals who appeared to have direct financial conflicts of interest with defense consultants and defense contractors. In June 2023, U.S. Senator Elizabeth Warren (D-Mass.) reintroduced the Department of Defense Ethics and Anti-Corruption Act to strengthen ethics laws in DoD contracts. ###