Sen. Elizabeth Warren gave President Trump a rare bipartisan nod by joining a Republican colleague to urge the Pentagon to make his restrictions on defense contractor stock buybacks permanent.
Warren, a Massachusetts progressive not known for finding common ground with the White House, co-signed a letter to War Secretary Pete Hegseth with Sen. Mike Lee, a Utah Republican, pressing him to codify the buyback limits Trump imposed by executive order in January. The letter, obtained by Fox News Digital, argues that the policy is already shifting how the country's largest weapons makers spend their money, and that legislation is needed to lock those gains in place.
The numbers back them up. Among the top 20 publicly traded U.S. defense contractors, buybacks and dividends dropped by $2 billion in the first quarter of 2026 compared with the same period a year earlier. Capital spending, money plowed back into factories, production lines, and equipment, rose by $1.2 billion over the same stretch.
For taxpayers who have watched the Pentagon hand contractors hundreds of billions of dollars while weapons programs ran years late and billions over budget, the shift is overdue. And the fact that it took a Trump executive order to start moving the needle tells you something about how entrenched the problem was.
Warren and Lee's staff dug into earnings calls and financial reports from the 20 biggest publicly traded defense firms. The results, laid out in the letter, show a clear trend among the industry's heavyweights. Lockheed Martin, RTX, Northrop Grumman, and General Dynamics, four companies that collectively dominate Pentagon contracting, saw their combined buybacks and dividends fall from roughly $4.2 billion in the first quarter of 2025 to about $2.7 billion in the first quarter of 2026. That is a decline of approximately $1.5 billion.
Not every firm moved in the same direction. RTX's reported payouts ticked up slightly year over year. And GE Aerospace actually increased its stock buybacks, a fact the senators pointed to as evidence that an executive order alone cannot finish the job.
Trump's January executive order directed the Pentagon to flag contractors falling behind on performance, investment, or production. For those companies, future contracts would restrict stock buybacks and corporate distributions during periods of underperformance. The order also gave the Pentagon authority, where existing law allows, to cap base salaries of executives at underperforming firms and to tie executive incentives to on-time delivery rather than short-term financial metrics.
That approach, linking executive pay to whether the military actually gets what it ordered, on time, represents a sharp break from years of Pentagon contracting culture. For decades, defense CEOs collected enormous compensation packages even as their companies missed deadlines and blew through budgets. Trump's order put them on notice. The bipartisan Senate letter now asks Hegseth to make sure the notice sticks.
The senators are not content to leave the policy tethered to one president's pen. Their Prioritizing the Warfighter in Defense Contracting Act would codify the central provisions of Trump's executive order, ensuring that future administrations cannot simply undo the restrictions. Key elements of the bill have already been folded into the Senate's version of the fiscal year 2027 National Defense Authorization Act, the annual defense policy bill that Congress uses to set Pentagon priorities.
In their letter, Warren and Lee framed the stakes in blunt terms:
"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."
The "trillions" reference is not hyperbole for its own sake. Defense budgets have climbed steadily, and the recent strain on U.S. munitions stockpiles has only intensified pressure on contractors to deliver more weapons faster. When the country's ammunition reserves are running thin, every dollar a defense contractor diverts from production to Wall Street is a dollar that does not become a missile, a shell, or a spare part.
Warren's willingness to credit Trump on this issue stands out precisely because it is so unusual. She has spent years positioning herself as one of his sharpest critics. But the defense buyback fight touches a nerve that runs across ideological lines: the sense that giant corporations are pocketing taxpayer money meant for national defense while the troops wait for equipment that never arrives on schedule.
Fox News Digital reached out to the War Department, Lockheed Martin, RTX, General Dynamics, and GE Aerospace for comment. None responded before publication. The silence is notable. When companies are proud of their track record, they tend to say so. When they are not, they tend to lawyer up and wait.
The pattern of cost overruns and delays that prompted this push is not new. For years, major Pentagon weapons programs have come in late and over budget while the contractors running them reported strong profits and returned billions to shareholders. Trump's executive order was the first serious attempt by any administration to use contracting leverage to change that equation. The early data suggests it is working, at least partially.
GE Aerospace's decision to increase buybacks despite the executive order illustrates the limits of presidential action alone. An executive order applies only to the extent the Pentagon enforces it, and it can be reversed by the next president. Legislation would remove both vulnerabilities. That is why Warren and Lee are pressing Hegseth not just to enforce the current policy but to publicly back the bill that would make it permanent.
Trump has shown a willingness to use leverage to extract results from reluctant partners, a pattern visible in his recent standoff over the housing bill, where he withheld his signature until Congress moved on voter ID legislation. The defense contractor push follows a similar logic: set the terms, apply pressure, and wait for the other side to adjust.
Lee's involvement gives the effort credibility on the right. He is one of the Senate's most consistent fiscal conservatives, a lawmaker who has made his career demanding that the federal government spend taxpayer money responsibly. His presence on the letter signals that this is not a progressive hobby horse but a straightforward accountability measure. When Elizabeth Warren and Mike Lee agree on something, the underlying problem is usually real.
Whether Hegseth will endorse the legislation publicly remains an open question. The War Department's silence so far leaves room for interpretation. But the data in the senators' letter gives the administration a strong talking point: Trump's policy moved the needle before any law was passed. Codifying it would only strengthen the hand the Pentagon already holds.
Meanwhile, the broader political landscape continues to shift around defense spending. Democrats have been pushing aggressive institutional changes on multiple fronts, but on this issue, at least one prominent progressive found it easier to back the president than to fight him.
The question now is whether Congress will follow through, or whether the defense lobby will quietly smother the bill in committee, the way it has buried reform efforts before. Trump's executive order proved the concept. His track record suggests he does not let leverage go to waste.
When a progressive senator and a Tea Party conservative both tell the Pentagon the same thing, Washington ought to listen. The troops waiting on late equipment certainly are.
