Podcast - Defense Dynamics: Navigating the Post-Election Landscape for the National Security Sector

Misha Lehrer: Hey everybody, welcome to Holland & Knight's Public Policy & Regulation Group's podcast. Today we're going to dive into a critical topic, the upcoming November elections and what they might mean for defense policy and defense appropriations. With the elections just around the corner, it's the perfect time to start thinking about how potential shifts in leadership could impact the defense landscape. We're going to explore how a new administration, whether it be a Trump 2.0 or Harris Administration, and changes in the balance of Congress can shape the future of defense spending, strategy and priorities. What are the big ticket items that could be at risk, and what programs might see an increase in support? What does this all mean for the defense industrial base? Whether it's research and development, procurement or readiness, any change in policy can send a ripple effects across an entire sector and the political implications of the November elections. We'll consider how the defense priorities of an administration can differ depending on party platforms and how Congress will play a role in pushing those priorities forward or potentially standing in their way. This matters for companies and individuals working in or with the defense sector, because policy shifts can mean new opportunities, but they also bring uncertainty. So what should we be doing now to prepare? How can we get ahead of these changes? And what should industry leaders be watching for as the elections draw closer? Those are the questions will be unpacking today, and I'm excited to dive into this conversation with my colleagues. Whether you're directly involved in the defense world or simply keeping an eye on U.S. national security, this episode will give you the insights you need to understand what's coming next. So we're going to tackle a lot in today's episode. But before we delve into the topics of defense and national security, what the presidential and congressional elections might mean and looking at things from both the authorizing and appropriating points of view, let's do some introductions. With that, I'll hand it over to Dan Sennott and Simon Coon, experts in their own right in defense authorization and defense appropriations, respectively, to introduce themselves. Dan?

Daniel Sennott: Thanks, Misha. I'm Dan Sennett. I co-lead the defense and national security team here in Holland & Knight. Prior to Holland & Knight, I was the staff director for the House Armed Services Committee. And then prior to that, I was in the Army for about 21 years, first as an armor officer and then as a judge advocate. Here at Holland & Knight, I primarily represent both traditional and nontraditional defense companies as they navigate the Department of Defense and Congress. And I'll turn it over to Simon to introduce himself.

Simon Coon: I’m Simon Coon, the senior policy advisor here in Holland & Knight. Prior to my time with the firm, I spent seven and a half years in the Senate working for the Senate Committee on Veterans Affairs and also as a military legislative assistant to Senator Tester. And a little bit of time enlisted in the Marine Corps before that. My practice at the firm is primarily focused on defense technology startups and traditional defense contractors as well.

Misha Lehrer: And that long-winded introduction was from me, Misha Lehrer. I'm a senior public affairs advisor here at Holland & Knight, focusing on traditional/nontraditional defense clients, helping them navigate through the defense congressional committees in the Department of Defense, and have the honor of moderating this great conversation with you guys. So with that, let's start with the top of the ticket, Dan. What would the Department of Defense priorities look like under a second Trump Administration? How might his past approaches to defense spending and military strategy shape future policy?

Daniel Sennott: I think that's a really good question. I think there are some indications based on the previous Trump Administration and what a future Trump Administration would look like. But I think also the political landscape and just the world landscape has changed markedly in the last four years. So I think there would be some potential iterations on that previous administration. I think the first one that we saw in the first Trump Administration that we probably see again is an increase in the defense budget overall. And this kind of fits with President Trump's overall view that a demonstration of strength by the United States is the best way to deter aggression. I think a lot of that comes through funding of the Department of Defense. I also think we're likely to see a withdrawal from arms control agreements. In the first administration, there was a belief that the Russians are likely cheating anyway, and so why restrict the U.S. unilaterally by adhering to arms control agreements? I think there's going to be an increase in spending and emphasis on combating China, whether that be with or without allies. I think the Biden Administration has done a good job of trying to marshal allies in order to combat China. I don't know that a Trump Administration will spend as much time on cultivating those allies, but I do think that they will continue to place an emphasis on the great power competition, particularly regarding China. Ukraine and European spending, I think that's a big question, but I wonder whether or not the rhetoric will actually meet reality. I think we will almost certainly see reduced NATO spending in a Trump Administration and an increase in emphasis on European partners stepping up and increasing their overall defense spending.

The other one that I think is interesting — and I think we'll see this throughout this discussion — is there's a lot in common, really, between the Biden Administration and the way that they've approached things within DOD, a future Harris Administration and a potential Trump Administration. And one of those commonalities, I think, is their support for the defense industrial base. I think that was something that was started under the first Trump Administration, but the Biden Administration has furthered that. And I think we would see even more of that in the second Trump Administration. And then on the domestic front, a part of the GOP platform is an Iron Dome for the U.S., and that is establishing comprehensive missile defense systems for the United States. That's currently — as we know, Iron Dome is currently manufactured by a partnership between Raytheon and Rafael. So we may see literally an Iron Dome, or we may see more of a policy and an emphasis on how we defend the homeland. Those are the overall general contours of what I think the Trump Administration will be emphasizing in, in terms of defense.

Misha Lehrer: I think that insight is going to be really helpful for people to start thinking about, with the elections coming up. Simon, I know Harris' policies are sort of still coming together. Dan sort of touched on some of the commonalities, but how might a Harris Administration differ with their approach to DOD priorities under, under her administration? Will it sort of be a continuation of the Biden Administration, or what might she be looking to do specifically that are different? And what other priorities do you expect her to focus on if she were to take the reins, especially considering her background and past positions on defense?

Simon Coon: So I'm going to have to agree with my colleague Dan to a large extent here. And I think the sort of instructive place to look when you're trying to parse out what a Trump or a Harris Administration would look like is the national defense strategies of the first Trump Administration into the Biden Administration, which have more similarities than differences. I think great power competition is going to continue to be the primary focus of either oncoming administration, with China as the pacing threat, and that is necessarily going to lend itself to this focus on the defense industrial base and making sure that America is in a competitive place on that global stage. When you get a little bit more into the appropriator lens on what that looks like, I agree with Dan again that you saw slightly larger budget requests for DOD under the Trump Admin. And under the Biden Admin, you saw largely flat, or just keeping pace, with the rate of inflation. I think you would likely see that again with a Harris Administration. However, you know as we all know well, Congress has the final say on the size of those budgets. And I think you would likely see some increases above the presidential budget requests if an incoming administration toed that line along with the rate of inflation. I think the main differences that you would see from a Harris Administration versus a Trump Administration on defense are probably going to be more on the personnel side of the House, issues like DEI and how the fourth estate, so to speak, that manages DOD is run. But I think the big focus, as you can even see this reflected in both party platforms right now; focus on troop pay, the defense industrial base, modernizing the nuclear deterrent. These are these are themes that are represented in both potentially incoming administrations. So, more similarities than not.

Misha Lehrer: And of course, the sort of flat or keeping pace defense budgets that you mentioned is both because of a policy that President Biden sort of agrees with, but also because of the contours of the Fiscal Responsibility Act that sort of set those defense priorities and budget moving forward for a few fiscal years. So I guess your sort of prognostication there is really helpful. I would love to hear your thoughts on sort of what programs or policies you both think are most vulnerable to change under either administration and what might remain stable.

Daniel Sennott: From my perspective, I think it's interesting about the homeland defense. If you look at some of the documents that so far have been published, both GOP platform and then also, Project 2025 — which, whether or not the President Trump is aligned with that or not aligned with it is discussion — the defense section was actually authored by Chris Miller, who was the acting Secretary of Defense in the waning days of the previous administration. And I think in the documents that I've seen a huge emphasis on homeland security. And one of the things in the previous administration, of course, was building a border wall, right? And a lot of folks took his comments and continued to take his comments seriously, but not literally, right. That's been the expression from, from some sectors. And if we were to then translate, what does Iron Dome mean? Does that mean literally employing Iron Dome like they do in Israel? Well, some say in the United States geographically is too large to be able to do that the way they do in Israel. But it could mean that there is going to be an increased emphasis on how do we better protect the homeland against threats like missiles, but then also other threats. And so I think there has been and will continue to be a level of comfort in using active duty service members in as border security and helping the Department of Homeland Security in securing the border.

I think the other piece that we'll see is, obviously the NATO relationship is one that everyone is watching, and anticipating that there would be potential changes in the U.S.’, his attitude towards NATO under a second Trump Administration. I will say that what we have seen both during the Trump Administration and the Biden Administration is NATO countries increasing their defense spending. Germany, for instance, they recently announced that their new goal is going to be around 3.5 percent of GDP, which well exceeds the 2 percent goal. And so I think a emphasis on making sure that NATO countries are both ready to be able to commit troops and defense material to any fight, and being able to defend their countries and interests. And I think we'll probably see that same thing in Korea. South Korea taking the lead in in defense against North Korea, and there were some changes during the previous Trump Administration in that relationship. And I would expect that to continue.

And then the final thing I'll just mention is expanding and modernizing the U.S. nuclear force. I think that will be a major emphasis for a Trump Administration, because I think they see the main contribution to NATO being the U.S.'s nuclear capability and being able to provide that sort of protection to NATO and NATO countries.

Simon Coon: Interesting, I think from a funding perspective, the broad strokes are largely identical. I don't see specific line items that have been discussed with either national defense strategies or party platforms that would indicate big ticket defense programs that either administration wants or want to target. I think Dan's comment about nuclear modernization is going to ring relatively true with a Harris Administration as well. I think the major difference that you would see, particularly, again, as it relates to that deterrence, is how arms control treaties play into the way we approach nuclear modernization. So I think that the contours of the modernization of nuclear arsenal might look a little different based off of compliance rules that we have set upon ourselves or withdrawn from. But otherwise, there will be a similar desire to continue the ongoing triad modernization efforts. I don't see any big changes happening in that space. I think, again, the differences between the two administrations are more in this personnel, civil military relations space and less in this big ticket weapons space where I think that the previous Trump Administration and the Biden Administration have continued to be pretty deferential to the DOD on what they need or what they have stated in their budget request the need to be successful in a great power competition with China as a pacing threat, and then seeking to resource those needs through the traditional president budget cycle. So I don't see any large program sort of on the chopping block from either administration.

Daniel Sennott: We have seen, you know, a huge challenge with regard to recruitment and retention of service members within DOD. And that's sort of across the board. And I think what we may see is de-emphasis on strength and an additional emphasis — and I think this is true of whether it is a Harris Administration or a Trump Administration — an emphasis on technology and an emphasis on nuclear modernization and less of an emphasis on how many service members we actually have on active duty at any given time. And a part of that is, I think the future Trump Administration would probably be isolationist, largely, not looking to get into foreign conflicts and therefore not needing to commit troops overseas as much as we have in the past.

Misha Lehrer: That’s very fair. Appreciate both of your outlooks. I think we could do a whole episode just on looking at the top of the ticket and what this might mean for the Department of Defense and U.S. national and homeland security. But sort of want to move on. You both sort of touched on the budgets and the budget requests of what either administration should look like. We've seen in the past couple of years the operation and maintenance and budgets increase mainly reflective of troop increased pay. And as a result, research development test and evaluation funding already has sort of not kept pace, which is where a lot of the innovation within the DOD ecosystem lives. That, of course, will be reflective on what Congress decides to authorize and appropriate. So moving on to the impact of Congress on defense policy and funding, I would love to dive into this a little deeper. The projections seem to change nearly every day as to which chamber will take a majority after the November elections. Some folks are saying the conventional thinking is that Republicans will regain the majority in the Senate and Democrats will retake the majority in the House. Either way, there will likely be some type of split government. So I'd love to ask you both, how do you see Congress playing a role in either advancing or pushing back against the defense priorities of either a Trump or a Harris Administration?

Daniel Sennott: I would suspect if the House flips and you have a Trump Administration with a House that is controlled by the Democrats, I would immediately focus on oversight investigations and hearings. And I think that would be, that would be nearly instantaneous, because I think there are, there's a lot of understanding of views on what Trump Administration policies would be. And so I think there would immediately be that oversight role, which is typical of any divided government. But I do think that there would be an appetite for increased oversight, investigations, hearings and scrutiny on how Department of Defense money is being spent, particularly if there is an emphasis on border security and other things like that, and using DOD funding for that. We saw that in the first Trump Administration. And then with regard to the Senate, I think they'll likely be occupied. And if it is a Trump Administration and a Republican-controlled Senate, the Senate will be occupied with presidential nominations for quite some time. And I would anticipate some vacancies for quite a bit of time as well, because depending on the nominee, it may be very difficult for those folks to be confirmed. We see this in, in both Republican and Dem administrations. But there is the increased scrutiny on public statements that have been made by these nominees in the past. And I think we will definitely see that in a future Trump Administration.

Misha Lehrer: Simon, would you care to respond?

Simon Coon: The shape of the divided government is really going to decide the speed of the Congress. And I think if you see an executive in a Senate that's divided, you're going to see a very slow nomination process no matter who's on what side of that divide. If it's, if it's Trump or a Democrats or if it's Harris or Republicans, it's going to be a very challenging nomination environment. And similar to what Dan said, if there's a House that is the opposing party of the presidency, you'll see an increased level of oversight. That being said, I think the Congress has largely, for both Trump and Biden and I would expect to see this in the Trump 2.0 or Harris Administration as it pertains to defense, has looked at these presidencies and said, "Hey, there needs to be more funding." I don't think there's been a single presidential budget request that has come over in the last two admins that didn't end up receiving more money from the Congress than what it actually requested. That doesn't typically look like, "Hey, we really broadly disagree with how you're spending your money. We think that these programs need more money to stay on time and execute in a way to, again, keep pace with the pacing threat of China." So I imagine that will continue. I don't see anything from a potential Dem or Republican led Senate or House that would make them want to restrict the funding going to DOD, because I see a congressional environment that is very concerned about competition with China and is very concerned about our security posture in the world. And I think that's going to continue to be the case.

Beyond that, I think there's going to be a continued interesting conversation around what DOD modernization look like, looks like. And Misha, you know, you pointed out that O&M continues to take a large proportion of the budget. Part of that is focus on troop welfare and personnel issues. Part of that's just the way inflation chews into the DOD's budget. So while it also looks like RD&T is not keeping pace, there is this undercurrent of conversation around the procurement needs of modernizing the military. And you saw this in a pretty significant way under Chairman Calvert in the House in this past appropriation cycle where, you know, $1 billion of new DIU spending in addition to the replicator initiative is procurement dollars. It is a significant increase. OK, we've done a lot of great RD&T, and we have a wonderful tradition at DOD, but we need to make sure that these capabilities are translating into the warfighter and not just staying on the shelf, so to speak, with the research labs. So I imagine Congress is going to continue to push in that direction. Adam Smith recently made some comments about the potential of an incoming Harris Administration and how he would like to see a continued focus on modernization in keeping with the traditions of Ash Carter in his time in DOD. So I think there's a very bipartisan desire to see DOD not only innovating, but really procuring these capabilities that have been developed and spending more money in that arena, besides in the RD&T where we traditionally see this innovation happening.

Daniel Sennott: I think particularly with regard to the defense acquisition system, I think that is an area that has been ripe for reform for several years and has been reformed over the course of the last several years. And that will continue to be an emphasis, whether or not it is a Trump or a Harris Administration.

Misha Lehrer: And one of the roles that Congress can play is through defense policymaking, of course, via the annual National Defense Authorization Act, the NDAA. It has passed now for the past 63 consecutive years. Congress is now making a concerted effort to ensure that it passes for a 64th consecutive year. The House of Representatives passed its fiscal year 2025 NDAA on a bipartisan basis, and Senate Armed Services Committee Chairman Jack Reed and ranking member Roger Wicker announced an agreement of, bipartisan agreed upon amendments to the Senate's version of the FY25 NDAA to be conferenced in the coming months, which will be announced either before or after — and likely after — the election. So then could a split Congress create more gridlock, or where there be areas where bipartisan support might emerge for the NDAA? Should we expect sort of the same in a split Congress and administration dynamic, or will we see sort of the same bipartisanship when it comes to passing the NDAA? And I'll just sort of touch on what, what Simon mentioned briefly, and you did before, is that sort of the commonalities are for the defense industrial base, for reforming the acquisition and procurement systems, China being a pacing threat. So sort of curious as to your thoughts on what the NDAA might bring in the next four years given dynamics that we don't know yet on the results of the November elections.

Daniel Sennott: Many people say that the Armed Services Committees and Defense Appropriations Committees are sort of the last bastion of bipartisan cooperation in Congress. And I think that's true. That's, that's how you got a record like that of 63 consecutive years of being able to pass a National Defense Authorization Act. I don't anticipate that changing. We have had split Congresses in the past, and we currently do and are still able to, to, to get that bill across the finish line. But I would say the commonalities that you've highlighted, policy on China, that has sort of come into the mainstream where it initially became a Republican cause, and then it has morphed over the last several years to be really bipartisan. Both Republicans and Democrats very concerned about competition with China and Chinese trade practices in particular. I think the other area of commonality is — you touched on defense acquisition and innovation. I think regardless of whether or not it's Republicans or Democrats, innovation continues to be an important component of this. And part and parcel of that, I think, is the defense industrial base that you talked about. Being able to broaden the defense industrial base, particularly leveraging a lot of the innovation that's coming out of Silicon Valley and leveraging dual use technology for use in the Department of Defense. I think that is a bipartisan cause. And you saw there is a House Armed Services Committee hearing, a field hearing in Silicon Valley last, last week. And then in June, Chairman Calvert had a similar hearing in the Silicon Valley area. So I anticipate that will continue to be an area of emphasis. And then I think the final one, which kind of nests with all of these issues, which is the onshoring and reshoring of production capability writ large and how that enhances the national security in the United States, both with regard to the defense industrial base, but also just in general. Semiconductors is a prime example. I think there's bipartisan agreement that we need to have those production capabilities in the United States or at least not in unfriendly shores in order to ensure our national security.

Misha Lehrer: Dan, Simon, this has been really great. I really appreciate taking the time to talk about what the November elections can come to the defense and national security, what it will look like for funding from both the authorizing and appropriating points of view. I just sort of want to wrap it up quickly and sort of ask one final question on why is it important for both industry policymakers to begin thinking about how the outcome of the November elections will affect defense policy and funding moving forward, and any other closing remarks you both might want to provide.

Simon Coon: Yeah, absolutely. Thanks, Misha. So what I think folks looking at this election and how it's going to affect their participation in the defense industrial base. There's a large foreign policy component to it that everyone should keep their eye on, because the way that these incoming administrations interact with our partners is really going to drive a lot of funding. It's going to drive the way foreign aid funding is spent. It's going to drive the way military funding is spent and the level of oversight and scrutiny that funding receives. But a commonality that I think folks should stay on their toes as they observe, is that any oncoming administration, in keeping with this focus on innovation and modernization that we see broadly across portfolios, there's going to be a strong desire to see increased competition. I think part and parcel with this modernization conversation is one that more agile and innovative companies have an opportunity to compete in a larger way than they have in the past on these big ticket antibody weapons acquisition programs. Not so much in the realm where you're going to see traditional primes kicked off of programs already running, but rather that new capabilities are going to have more robust competitions. And I think you're going to see that with both administrations. So regardless of who comes into the White House, businesses should be focusing, as they look to participate in the defense industrial base, is an environment where competition is sharper than it has been in the past, not due to budget constraints, but due to policy desires from either oncoming administration.

Daniel Sennott: Yeah, I completely agree. I think the only other thing I would add is, obviously, there are a lot of commonalities, as Simon said, and I think innovation in either a Trump or Harris Administration will be a major emphasis point for the Department of Defense and modernization. I do think that right now many folks are interested to know whether or not and how some of the alternative energy programs that have been launched by the Department of Defense under the Biden Administration will survive going into either a Harris or a Trump Administration. That would be one area I would imagine will probably see some change under a Trump Administration. So I think there just, should be an emphasis right now, if you are working with the Department of Defense on, on one of those programs, is to make sure that you have finalized your plans and then are awarded that contract as we go into the November election. Besides that, I think a lot of the general contours will continue to remain the same, whether it's a Trump or a Harris Administration.

Misha Lehrer: So definitely seems like innovation, modernization, power competition, especially with China, some of the foreign policies that we should be looking for that impact the way the U.S. and U.S. industry does business both with the Department of Defense and other agencies within the national security realm is going to be really important to look at. With that, I really appreciate both Dan and Simon for being here chatting about what the November elections might bring to defense and national security. I appreciate you tuning in and making it this long into our podcast. If you have any further questions, we're always happy to, to have a conversation. We also publish a monthly newsletter on defense and national security issues that look at both what's going on in Congress and from the administration. So if you'd like to receive that in your inboxes monthly, please feel free to reach out as well. And with that, thanks again.