The Winter of Our Discontent

TONY BERTUCA: How do you define what an underperforming defense company is? And what are the restrictions that you're able to put on it? And are you going to start writing this into new contracts? And when? I think we need to see how DOD works through how they're going to implement what was in the executive order.
ROMAN SCHWEIZER: From DOD to Congress and from the White House to Wall Street, the NatSec Need to Know podcast, an unrehearsed podcast presenting insightful discussion and forecasts of the major national security and defense issues of the day. Welcome to the NatSec Need to Know. We've got our reporters roundtable to discuss top national security issues in Washington and around the world and to preview what to expect over the next several weeks.
Joining me is a murderer's row of experienced Washington editors and reporters-- Tony Bertuca from Inside Defense, Joe Gould from Politico, and Marcus Weisgerber from The Wall Street Journal. They've each covered Washington and the Pentagon for decades and are as well sourced as anyone in town. Thank you all for joining. Let's get after it.
Thanks so much for joining us. We're going to go over the latest topics out of Washington and maybe a few issues from elsewhere. We've got Tony Bertuca, Joe Gould, and Marcus Weisgerber, return of the prodigal reporter, who joins us, who is now penning good vibes at The Wall Street Journal. So, Marcus, welcome home. It's good to see you.
MARCUS WEISGERBER: Thanks for having me, Roman. Great to be with you guys.
ROMAN SCHWEIZER: All right. Well, let's start off, probably by the time you're listening to this, the US government will be open, potentially. But at the moment of recording, we are headed into a shutdown, probably a short-term one. Joe, maybe you can explain the situation and tell us how we're going to get out of it.
JOE GOULD: Yeah, thanks. So where we are at the moment is the president and Senate Democrats reached a deal to fund the federal government as of this Friday at midnight when the deadline for a partial shutdown is-- will be upon us. We did hit a snag last night. Lindsey Graham had some extraneous demands, and everybody kind of went home.
Just going on vibes, it feels like something that's going to sort itself out. But basically, the big sticking point was that there was-- the Senate was dealing with a six-bill package, which included defense and, controversially, the Department of Homeland Security funding bill. And because of the events in Minneapolis, the death of a US citizen at the hands of federal agents, Democrats are pretty dug in about taking that bill out.
And so they've appeared to work out a deal that'll take it out and then replace it with a short-term stopgap of two weeks. But the problem is we're going to have some sort of funding lapse, is what it looks like, because the Senate can pass this if they can get over their Graham problem. But the House isn't going to be in, we think, at least until Monday, or at least that's what Mike Johnson is saying.
And really, as we have this conversation right now, House Republicans are supposed to be having their own call. And so, I don't know, it's possible that, maybe under pressure from the president, Johnson brings the House back in on Sunday night and they vote this out then and avoid a government shutdown.
But I think we've seen in the past that there have been these-- you wouldn't call it a shutdown. OMB doesn't release guidance. And then over the weekend, when folks weren't really supposed to be-- federal workers weren't really showing up for their jobs anyway, the government funding lapses. And then it just picks up again on Monday or whenever they pass appropriations.
But the good news in there is that full-year spending for DOD is going to be included. It's like a $984 billion bill. And so some of the hawkish Republicans who we were talking to, Susan Collins yesterday, felt like this is a silver lining and a big reason to push through this five-bill package that they're going to be considering.
ROMAN SCHWEIZER: Looking at the larger view, I mean, it is pretty amazing that we do-- we are on the verge of getting 11, if not 12, appropriations bills passed after a couple of years of CRs. Particularly, I think appropriators wanted to maintain their relevance, given the fact that the reconciliation bill was done by authorizers. I think that was maybe perhaps a wake-up call for some of the appropriators who are usually the most powerful folks on the Hill.
Obviously, the circumstances around Homeland and ICE are going to be probably tough to negotiate in the short term, I guess, whether it's a two-week CR or whatever the potential deal is. But certainly, there's probably a path to get that done. Or Democrats may believe it's good policy to defund ICE. This is their opportunity to keep it under shutdown. But I still think there's some money under reconciliation or other areas to keep the agencies open, or keep Homeland open.
And so I guess that leads us to our next transition, because once '26 is in the books, we'll move on to '27. I know, Tony, you had some updated reporting, as did some others, about what Rob Whitman said this week.
TONY BERTUCA: Yeah, so Congressman Whitman, Republican from Virginia on the House Armed Services Committee, seemed to tell everybody that maybe the $1.5 trillion the president's talking about, well, maybe what will really happen is we will end up with a $1.5 trillion defense top line by FY30. Maybe that's how long it'll take to get there slowly.
He said that in an appearance at the Atlantic Council, which is very interesting because he's an authorizer. And when it comes to the $1.5 trillion, authorizers are ready to go right up to the moon. They'll authorize huge numbers all the time, the Republican majority.
Where you've really had the cold water thrown on a lot of this is appropriators because they are afraid-- and my reporting shows with good reason-- that a huge amount of that extra $500 billion will be requested in a reconciliation. And appropriators aren't happy about it. You've got Ken Calvert who said don't do it. You've got Mitch McConnell who said don't do it because it's very much the authorizers' jurisdiction and the authorizers' game.
And they don't like that the vote would be tight. It was kind of tight last time. It would be even tighter this time in the House to get a reconciliation through. So the $1.5 trillion is starting to look maybe a little bit more aspirational now that you've got an authorizer going, all right, well, maybe it'll take a while to get up there. We'll see.
And then I believe-- I think it was-- I forget which publication that had the reporting on it, but I think it was CQ actually. It was Chairman Rogers, House Armed Services Committee, was talking about, well, maybe there's something we can do in terms of counting the unspent reconciliation money toward this $1.5 trillion goal. Maybe you can add some of that in for FY27 and make it-- maybe make it look a little bit bigger.
So the word that might get bandied about is "gimmick," right? We kind of saw that last time with the administration's request when it came in flat, the regular request came in flat. But they pointed to the big boost in reconciliation that would take it over the top to a trillion.
So I think there's some skepticism right now as to whether or not the defense industrial base also can absorb that much spending. I think we just kind of have to wait and see what comes together on the Hill and whether or not the White House feels like it can really convince enough Republicans to go ahead with another large reconciliation bill that will pump money into defense.
Obviously, defense would not be the only thing involved in a really big reconciliation bill. It gets really complicated, and there's a kind of alchemy that goes on on the Hill as to whether or not stuff can be included in it. So jury's out on that.
MARCUS WEISGERBER: Just maybe to follow up a little bit on that. The budget's technically supposed to go to the Hill next week. That's not happening, I think. We heard on earnings calls this week from industry CEOs that they're planning for end of March. I know I've heard the same just in talking to folks who will have a delayed budget request yet again, meaning a shorter time to approve before the end of the fiscal year. And we're back in the vicious cycle that we tend to be in year after year.
I think one thing-- Tony actually laid it out amazingly, particularly with the angst between appropriators and authorizers. And the one other thing, the thing I'd hammer down, is the ability of the defense industry to absorb this. We have Golden Fleet. We have Golden Dome and plus-ups wanted in lots and lots of other places.
Things seem to be getting back on track for a lot of companies. They seemingly recovered a lot from the COVID supply chain issues and such. But we're still hearing, actually, about now single-source suppliers and such. And then, again, just to lean on the earnings calls that happened again this week, we heard this from-- specifically in shipbuilding, submarines. Still little, specific micro issues that end up causing bigger-picture delays.
JOE GOULD: I would just add that-- and you guys both said it-- but I think we're at the point where the conventional wisdom is that the administration is going to take another "one number, two bills" approach, whether it's $1.5 trillion or something else. So what you have is an OMB with a base budget request that matches the previous year. And then you count on reconciliation for any kind of additional funding.
And right now, the vibes on reconciliation on the Hill are not great. I think it feels kind of like a pipe dream. I talked to one senior Republican appropriator, who explained that the reason why it's so hard to do another reconciliation bill is that you have to find offsets. And so if you can imagine, they've already put out a reconciliation bill where they had to pay for it by cutting non-defense programs. And these are programs in people's districts. And for some Republicans, it was unpopular.
And you can imagine, in a midterm year, if you're cutting services to people, and Democrats are already hammering Republicans over health care and other pocketbook issues, that it might be unpopular, or probably will be unpopular, to come back in with a reconciliation bill that's loaded up with offsets beyond what they found in the past bill heading into an election year. So it's going to be an extremely heavy lift, which, to me, is another reason why the $1.5 trillion top line is unlikely.
MARCUS WEISGERBER: And, boys, we've been doing this so long. We're going back into OCO supplemental, talking about multiple paths. I remember the-- I think we all were covering this back when it was the supplemental request back in the early aughts, or mid aughts if you will, and the desire to get rid of it. And you finally get to a point where it goes away. And now we have something--
JOE GOULD: They find it--
MARCUS WEISGERBER: Yep.
JOE GOULD: Yeah, some other mechanism. Some other gimmick.
MARCUS WEISGERBER: Mhm.
ROMAN SCHWEIZER: All right, fellas, I've got hot takes. So buckle up. Hit the Record button. You can throw this back at me later this summer. But I want you to keep a couple of things in mind.
And so as many folks have talked about-- gimmick, yes. Discretionary budget stays flat at around 850. So we're talking about 650 billion in mandatory spending. I mean, I agree with the OMB shakeout. Here's one thing I would encourage you to think about, or what I think some Republicans are thinking about.
Look at the Republican's Study Committee's plan that they released a couple of weeks ago. There was no defense money in there. But they talked about health care, housing, and energy. This reconciliation bill is how they go after the affordability issue and load it up with all kinds of sugar to help them get reelected in the midterms.
The first reconciliation bill was about taxes, and defense just rode along. This one will be about affordability. What about stroke and refund checks for all those ACA subsidies? Republicans can solve the problem that they created. They can go after the housing issue. They can lower energy costs, et cetera, et cetera. And they can deliver all of this on the 4th of July, Donald Trump's gift to the American people on our 250th birthday. Then they all go home and campaign their butts off to get reelected in November.
And just specifically on the defense piece, there's going to be no money for defense if the Democrats take the House in November. This is Trump 1.0, a redo of that. So defense is going to be flat for really three years-- fiscal '27, '28, '29.
So in a diabolical way, you could almost think of getting that down payment now so that you've got a couple hundred billion dollars to spread out over the next three years. And Republicans would say that's just what the Democrats did with the Inflation Reduction Act or the American Rescue Plan, et cetera, because, I agree, I mean, the industry is not ready to absorb all that money. They can barely absorb the 150 that was passed in the OBBA.
But the other thing to think about-- and I would just say, I mean, surely, I would submit that Lindsey Graham probably pitched to Donald Trump that Democrats are not going to fund vanity projects. They're not going to fund Golden Dome or Golden Fleet or Trump-class battleships. And so you got to get that money now while you can.
And then, just last thing, if Trump does get behind this idea-- and we'll see if he does-- Republicans are going to vote for it because they don't want to be primaried or campaigned against. So he does have leverage leading up to the midterms. And then that's it, because after the midterms, he is a lame duck. And we're into we're into the home stretch, theoretically, until there's a third-term discussion.
TONY BERTUCA: On reconciliation, though, my question is, when you think about the slim majority, it's 218 now, isn't it? So he needs absolutely every single Republican to vote yes, right? Can't lose anybody. Nobody can get sick. John Bacon's got to vote yes. Massey's got to vote yes. Or you got to bring Democrats over to vote yes on a reconciliation bill.
ROMAN SCHWEIZER: Oh, totally agree. I mean, this is a triple ending.
TONY BERTUCA: Yeah, right. It would be very impressive to get this vote.
ROMAN SCHWEIZER: Right. And the flip side is, but-- I mean, if you load it up with the sugar and the candy, then that's how you get this thing across. So I mean, the only thing I would say is, again-- and I would encourage you-- I've coined this as ABBA, "Another Big Beautiful Act." So feel free to use it in print.
I really want to make this happen. I'm waiting for Lindsey Graham or Trump to say ABBA because then just think about all the headline opportunities? "Waterloo," "Dancing Queen--" you can get so many ABBA puns into print on that. But yeah, look, it's going to be hard.
I think the other big question investors have is, is there going to be more money for defense, period? Is there going to be growth off that one trillion? So is 1.2 or 1.3 possible? Maybe if 1.5's too much-- and we all know Trump goes high on these numbers, right? So if he really wants 1.2, he asks for 1.5.
The one thing I would point out, to keep in mind, $1.5 trillion is 4.8% of GDP. And 1.3 trillion is 4.2% of GDP. So it's in that sweet spot of what we've been beating up our allies to spend. So on a percentage basis, it's not that much. On an absolute basis, it's a hell of a lot of money.
And just last thing about gimmicks and offsets and all that stuff, what if OMB supposes that the economy is going to grow at 5% and tariff revenue is going to be $1 billion a year? It's, again, forecasted over 10 years. I think there's a big opportunity for scoring and hijinks.
But we've talked this issue to death. We'll see. I mean, I think the biggest issue is State of the Union, February 24, maybe OMB skinny budget. I would agree, I think there's a skinny budget, then a detailed budget, like management's we're talking about. And then we'll go from there.
So, all right, we'll proceed to the next order of business. Lockheed came to the table, agreed on another big seven-year multiyear. Jim Taiclet's stepping up and getting out of the way of DOW's wrath. Marcus, you had some reporting on that, as have others. But, Marcus, you want to tell us what you think?
MARCUS WEISGERBER: Yeah, I think they're finally getting after it, it seems. We've waited for a demand signal for companies to actually have an appropriate-- or have a demand signal they were ready to react to. You could also threaten to take their CEO salaries and tell them they can't pay dividends and buy back their own stocks, as well, as the stick, if you will.
It seems like Lockheed's really on board with this. They took the unusual step, I guess, of making that first announcement right around the quiet period before their earnings, where they couldn't really give many details of it. That said, the next day was when we had the tweets, or the Truth Social, posts about the $1.5 trillion budget and the buybacks and the compensation and RTX.
I think we were kind of expecting there to be more of these coming. Mike Duffy, undersecretary for acquisitions, said there'd be more, and they were working on more of these. You got to imagine, RTX really wants to get one of these out right now because it's just-- they're in the doghouse right now, and they need to find a way out.
ROMAN SCHWEIZER: Joe, Tony, anything to add?
TONY BERTUCA: Yeah, I think one of the things to point out is it sure is interesting that we keep hearing the word "framework." So at least for Lockheed, these are frameworks. It's not binding money, no guaranteed dollars, no firm quantities. Congress still has to appropriate every year.
And I do wonder to what extent some of this is the Defense Department, one, pressuring industry, but trying to create kind of a fait accompli for defense appropriators who normally look at multi-years and go, well, you guys haven't really justified the cost savings on this. The view of appropriators in the past hasn't really been very, let's do strategic stockpiling. And I think Bill LaPlante, former Pentagon acquisition chief in the Biden administration, complained a lot about that, that appropriators were kind of shortsighted when it came to some of the multiyear procurements that were being requested.
So now what you're getting is you're getting public announcements about frameworks. These aren't really contracts. These are kind of, sort of, deals. And we still have to wait and see what Congress does.
I think the stock market obviously responded very well to news of this. And whatever indications the executive branch has given industry, Lockheed's comfortable leaning out on this. So I still think there's a lot more to explore in terms of, what is a framework, and how are you getting ahead of the money?
MARCUS WEISGERBER: Yeah, I think to piggyback on that, I think one of the things Taiclet said is-- I'm pretty sure I asked him this on the call-- was-- when this was the first one when the PAC-3 one was announced-- how do you know you're going to be made whole if the next Congress or the next administration says, yeah, we don't want to do that anymore? And he said there were remedy clauses in there. But again, until we see a contract on this-- it'll be easier to tell, I guess I should say, when we see a contract on this, how it'll actually work.
JOE GOULD: I guess what I would add is that it's a contrast under the Biden administration, where you were hearing frustration in the wake of Russia's invasion of Ukraine. The Pentagon was making a lot of noise about revving up industrial capacity. And industry was unwilling to do it without contracts.
And so I think the Trump administration has pulled something off here, where they've managed to get Lockheed to agree to something without-- where industry was saying for so long that it wanted the money on contracts first. I agree with Marcus that RTX likely wants to get a deal done. But it's possible that some of these other companies are still sticking to their guns on contracts. And that may be why we're not seeing something from them so far.
TONY BERTUCA: You could say this is a bold strategy from the Trump administration. It's a departure from what the Biden administration was trying to pursue congressionally. And like I said, I think it's trying to set up a fait accompli to get appropriators on board and get the money there where it wasn't before. But you could also-- on the other side, you could go, this is a handshake and a press release.
MARCUS WEISGERBER: To tie it back to the previous $1.5 trillion we talked about-- again, I said Golden Dome and Golden Fleet-- this is another area then where you're going to need a ton of money to put toward to do these plus-ups. And just one last point. This is not going to happen overnight still. I know we reported that a substantial part of the THAAD inventory was used when Iran fired its missiles at Israel.
This isn't going to solve a problem for a long time to actually produce 400 THAADs per year. It's going to take seven years to get there. So we're talking at least a few years before we start seeing the stockpiles start to come back up, assuming you don't use any.
ROMAN SCHWEIZER: All good points. I got a bunch of stuff I want to pile in on real quick. One, just notably-- just for giggles-- I did some math. Basically, a THAAD today, out the door, call it $13 million a copy. So 96 a year gets you to about 1.25 billion. Going to 400 gets you to 5.2 billion, just thinking about the numbers-- not the units, but the dollars.
PAC-3 MSE-- $4 million a copy out the door. Again, these are estimates, so please don't quibble at me. I didn't go into the budget justification books. But 600 a year, current run rate, gets you to 2.4 billion a year. 2,000 a year gets you to 8 billion. So just, I mean, that's what I think perhaps investors think about when they see potential growth.
Here's the thing, though, guys. In the appropriations bill, they did deal with this. They provided authority for 8 of 13 multi-years. And you can go in there. You can see which ones are Lockheed, which ones are RTX. You could probably guess. I could give you guesses on what the other five are. And this is Deputy Secretary of War Steve Feinberg's Munitions Acceleration Council.
And the one word that I want to say, or the reason for this, is China. DOD has talked about, one, increasing its stockpiles and, two, increasing its annual production rate. So this gets into peace through strength, deterring China, et cetera, but also, the "'no kidding, oh, [BLEEP], if something happens, we just don't have enough," and whether that's missiles out the door or the supply chain issue. So I mean, it has been supposed to me that for one particular weapon system in an INDOPACOM scenario, we've got 12 days' worth of munitions. That's just not going to work based on what we've seen with Ukraine.
So I do think this is-- again, normal multi-years are five years. These would go seven. I think they probably-- the companies wanted 10. And I think they did manage to get appropriators on board. But we'll see. If you look at the language, there are some stipulations, additional detail they want in the '27 budget request.
So DOD-- or DOW's still got some homework to do to show the receipts on that. Contracting-- I mean, I think the current crowd in DOW is probably being pretty innovative. I would think there's probably some money up front. Lockheed and Duffy have said it's cash neutral. There are probably some penalties or things like that and then profit sharing at the back end. So kind of a wash.
And look, I do think Lockheed has gone in and listened to the president in terms of talking about buybacks and dividends and how they're spending cash and saying, look, there's a very real scenario that we need to deter China and you guys need to step up. Again, I would imagine RTX is going to-- RTX weapons are on that list. So they are certainly in negotiations with the war department. I'm just curious why it's been so hard to get there, but we'll see.
All right, I guess I talked that one to death myself. We're coming out of the first week of earnings season. Companies reported. As you all know, I'm not an equity analyst. So I don't talk about companies specifically. The two of the things that I thought were notable-- one, unfortunately Boeing took another charge on the KC-46A tanker program-- 565 million. I think that's well over 7 billion in total charges for the program so far.
It might go down as the worst contract in all of DOD acquisition history for a company, not necessarily for the government. I mean, you think about what the government's gotten in return. And who says these companies don't invest?
But on the plus side, and as management did talk about, the Air Force has decided to go with sole source on a future tanker buy. And so there's at least 75 tankers. The company will have an opportunity to negotiate another block-buy multi-year, probably five years at 15 aircraft a year or something like that. And that should be profitable.
And then the second one-- surprising-- Textron announced a potential pull-forward loss of anywhere between $60 to $110 million on the MV-75 program for the Army because that contract was negotiated in 2021 and probably-- or may not have appropriately factored in for inflation and other things. So again, you have these pre-COVID or COVID-era contracts that continue to trip up execution or the economics of some of these contracts.
I think certainly everything post '22, post the inflation environment is-- you get more protection written into these contracts. But those were a couple of the things that I noticed. And then I guess the one thing that I would say is, in terms of the executive order on buybacks and dividends and executive compensation, I think, by and large, managements talked down or were very subdued in talking about any buyback activity, either current or in the future.
They did, I think, defend the idea of maintaining their dividend. And that is a whole separate issue in terms of why certain kinds of investors invest in these companies. And it would have a major tectonic effect on these companies if they were to halt their dividend or cut their dividend.
And then, third, I actually-- in all the calls I listened to, I didn't hear anything come up about executive comp. Curiously, that was not a subject-- and no one asked CEOs, I think, that question. So I think that's the lay of the land.
And I think, the one thing-- there has been no official statements about buybacks and dividends. But I get the sense that the administration may have evolving its view that dividends are OK and a way to reward long-term investors, whereas buybacks are financial engineering, and there's better uses of cash, particularly, again, as talking about whether it's increased missile production or shipbuilding or other areas where there's an urgent need to increase production and have the companies step up and do some burden sharing with the government. So, guys, any of you want to take a shot at any of that? I know I threw a lot out there.
MARCUS WEISGERBER: I'd just point out that every single one of them talked about how much CapEx they were doing. I mean, it was like project after project that were being listed by CEOs and billions and billions of dollars being touted.
TONY BERTUCA: And then the thing I'm looking for is how DOD wants to implement the president's executive order, which was, we're going to, based on performance with an allegedly underperforming company, say that you can't do stock buybacks. You can't do dividends. And your executive can't make more than $5 million.
DOD's got-- I think they had 30 days from the president's signing. So I think we're thinking early next month, they've got to come up with an implementation strategy to figure out how to do all this. So I'll be interested to see, how do you define what an underperforming defense company is? And what are the restrictions that you're able to put on it? And are you going to start writing this into new contracts? And when? I think we need to see how DOD works through how they're going to implement what was in the executive order.
JOE GOULD: Yeah, I'd just say something that we didn't hear was any sort of pushback on this. I think in some of the reporting out there, there are some questions about the legality of this. Maybe that's a question that kind of shakes out in this next stage that you were talking about, Tony. Maybe the implementation plan, if anything, triggers some kind of pushback. I wonder, how are they working through the implementation plan? How much feedback are they getting from industry, if at all? Is it something that they're just doing in-house? Or is there any sort of collaboration?
TONY BERTUCA: Yeah, and I mentioned the 30 days. That's 30 days for, let's get back and say what you're going to do. But then within 60 days, according to the executive order, DOD's got to ensure all new or renewed defense contracts include provisions that prohibit stock buybacks and corporate distributions during periods of, quote, "underperformance." So we've really got to have a definition from DOD on what underperformance is.
ROMAN SCHWEIZER: Yeah. Well, and I would just say, from the legal implementation aspect of it, we just talked about a bunch of contracts that DOD is looking to put into place. And that's these munitions contracts. There's a big submarine contract out there for 10 Virginias and 5 Columbias. There's a potential expanded B-21 production contract. There's all kinds of stuff. So I think that that may be the case of where they write that in.
I'm curious. I wonder if there's some stipulation again-- I'm just kicking this back to the CHIPS Act. From CHIPS Act, money or grants could not be used for buybacks or dividends. So I'm wondering if there does wind up being a stipulation for, if a contract is signed, profit from that specific contract cannot be used for buybacks or dividends.
Maybe there's a way that they break that out so that if you sign a contract to produce whatever system it is-- I don't even want to mention anything because I don't want any company to get angry-- but if you underperform on a particular contract, any money you earn on that contract cannot be used for those purposes. So maybe that's one way they wind up breaking it out.
MARCUS WEISGERBER: Yeah. And that's the other interesting thing, is, how do you deal with these Raytheon, Boeing, companies that have a substantial commercial business, and other money is certainly not coming from DOD and taxpayers?
ROMAN SCHWEIZER: Right. So again, maybe that would lead you to-- you just bucket those contracts that are applicable to that. And you can segregate those funds. And that's the money that can't be used however the board or management sees fit. But we shall see. All good points. And yeah, there's some milestones coming up that we maybe get some clarity.
All right, we've been going for a bit. Let's bring it home with-- and it's amazing because, as you guys know, when I was writing out the show notes for this, I forgot, but we've got a national defense strategy. Like, hey. And that includes to go along with a national defense strategy-- excuse me, a national security strategy released in November.
And I would note for folks who may have missed it-- and certainly everyone probably has-- the State Department released a-- I think they call it a strategic plan or something like that. It's got a really nice graphic, though, up front that I would encourage people to take a look at.
So the one thing I would note, all of these documents, traditionally, boilerplate, everyone ignores them. It's just kind of a rehash of buzzwords and gobbledygook. But I think all three of these documents are pretty pointed explanations or crystallization of the Trump administration's worldview on foreign policy and defense policy.
Particularly, I've encouraged clients and investors in Europe and elsewhere to read these things, to actually get a worldview, get a distillation of what the Trump-- how the Trump view sees the Western hemisphere, Europe, Asia, the Middle East, et cetera. So it's pretty plain language. It is pretty shocking or surprising language in some cases. I've never seen these documents, in the time that I've been doing this, written this explicitly.
And I think the NDS-- I mean, I think a lot of folks have honed in on the focus on the homeland or the Western hemisphere, and then the idea of deterring China, China is the number one threat, et cetera. I think there's some nuance in there. But again, I think it does hopefully-- or I think that the administration is trying to create some breathing room to work with China in the short term on some trade and economic deals, while still fully acknowledging China's got a very capable military.
I mean, look, the one thing I would just say is, a couple of weeks ago, the administration cleared an $11 billion arms package to Taiwan. So, I mean, that certainly didn't-- the Chinese weren't certainly happy about that either. So, gentlemen, just any thoughts about the National Defense Strategy or things we've seen lately?
TONY BERTUCA: I actually wanted to talk for just a second about what the State Department released because we had some coverage of that, the strategic plan. That was interesting for our readers because it spent a lot of time talking about integration with US allies, as the-- integrating the defense industrial base of the US and its allies. And it had this great term. They will support, quote, "reliable defense companies," end quote, and support the defense industry interoperability and collaboration between not just the United States and Indo-Pacific allies, but also with reliable European partners.
So, yeah, I think one of the things you're seeing that's really central to what the Trump administration wants to do is for military sales, co-production, stuff that people in the last administration were really interested in doing-- Bill LaPlante was going to the Pacific to start PIPIR. There's a continuation of a lot of that and expansion of a lot of that.
And then when you look at what the National Defense Strategy said, it talked about a supercharged defense industrial base. This is one of the pillars of the new national defense strategy. So it's definitely a way to understand a certain aspect of the Trump administration's foreign policy.
ROMAN SCHWEIZER: Yeah, and I think just, as many would submit recently, based on Trump's remarks at Davos, the Greenland, Denmark, NATO thing, the question is, what's written is often different than what's spoken. So we'll have to see how that kind of plays out over the next-- well, I guess next couple of years, but certainly-- maybe, certainly next few months.
So, gentlemen, we've covered a lot of ground. I will just throw it open. Any last shots, any prognostications on the Super Bowl or anything else that we might need to think about before we get together again?
TONY BERTUCA: I'm so glad Meta's not here.
MARCUS WEISGERBER: I was going to say the same exact thing. I think Joe would agree with us, as well.
TONY BERTUCA: But let the record show the Bears went further than others thought.
JOE GOULD: Yeah.
MARCUS WEISGERBER: Exactly.
JOE GOULD: I'm in a Bears family by marriage.
TONY BERTUCA: Oh, there you go.
MARCUS WEISGERBER: As am I.
TONY BERTUCA: You ended up on board, both of you guys. You both ended up on board at the end.
MARCUS WEISGERBER: We were ready.
TONY BERTUCA: [LAUGHING]
MARCUS WEISGERBER: Ugh. Hey, but it would be very ironic if Sam Darnold-- mock me all you want; everyone knows I'm a Jets fan; I make no secret of that-- but if Sam Darnold beat the Patriots. I want a meme of him wearing a Ghostbusters uniform after he-- like, Drake Maye has six sacks and five interceptions, or I don't know what. The Patriots will blow them out now, I guarantee it.
[LAUGHTER]
JOE GOULD: I would just say maybe next year for the Bears. I think they were so fluky. That's the thing about luck, is sometimes it runs out.
MARCUS WEISGERBER: There you go.
ROMAN SCHWEIZER: Well, now, the thing that I would say both for the Bears and Sam Darnold, USC Trojan quarterbacks? Right? Is that-- I'm pretty sure that's correct.
MARCUS WEISGERBER: I think you're confusing Darnold with Mark Sanchez.
ROMAN SCHWEIZER: Am I?
JOE GOULD: Williams was a--
ROMAN SCHWEIZER: I know Williams-- wasn't Williams--
MARCUS WEISGERBER: No, you're right. You're right-- USC.
ROMAN SCHWEIZER: All right. I happened to attend the University of Southern California when Rodney Peete was the quarterback. So we'll just throw that out there because Rodney was a great quarterback. But that was a long time ago for anybody doing any-- I see you Google searching, Tony. So--
[LAUGHTER]
TONY BERTUCA: I got Rodney Peete right here. Here he is. I know Rodney Peete.
ROMAN SCHWEIZER: I would just say about Williams is anybody in DC can be a Bears fan because Caleb Williams is a Gonzaga graduate. By the way, I think if Meta was on the call, I think there'd be a fair amount of steam coming out of his ears that I know anything about sports whatsoever because typically--
[LAUGHTER]
--because typically I do not.
TONY BERTUCA: You married well, like the rest of us.
JOE GOULD: Yeah.
ROMAN SCHWEIZER: All right. I think we've added a little value to this in terms of some-- but we still didn't get to final picks. But-- not that we need to.
MARCUS WEISGERBER: I'm going with the Seahawks. Going with the Seahawks.
JOE GOULD: Same.
ROMAN SCHWEIZER: Oh, well, that's just the anti-Meta vote at that point.
TONY BERTUCA: Correct.
MARCUS WEISGERBER: Are you going to be the lone wolf like NFL Network? Are you going to howl, put the hat on?
ROMAN SCHWEIZER: Yeah. [CHUCKLES] No, I'm an NFC guy, so I gotta do that. If you have listened this long--
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--thank you so much for joining us because you really, really must enjoy this. So, gentlemen, thanks so much. Oh, yeah, and happy New Year. We'll see how things turn out. Again, grateful for your time. And talk to you soon.