Raytheon Technologies CEO Gregory Hayes told CNBC Tuesday that he does not anticipate defense spending cuts in the future, despite warnings from Republicans amid rising expectations that Democratic nominee Joe Biden could win the presidential election next week.
“Frankly, I think that’s ridiculous,” Hayes said in a “Mad Money” interview.
President Donald Trump and his 2020 challenger, Biden, are crisscrossing the country campaigning for votes days ahead of the Nov. 3 election. In his four years in office, Trump grew military spending to new records from a $700 billion Pentagon budget in 2018 to $733 billion in 2020. He has also siphoned funding from the budget to help fund the construction of a wall along the U.S.-Mexico border.
Biden has made no calls to reduce defense spending, though the progressive wing of his party has advocated for reductions, which has given Biden opposers an opening to attack his plans for the military.
The former vice president, whose son Beau Biden fought in the Iraq War, a war Biden voted for as a member of the Senate, has pledged to direct spending toward innovative technologies in cyber, space and artificial intelligence to fend off advancements made by the likes of Russia and China.
As early as June, Trump said that Biden would defund both American police and military, should he be elected commander in chief.
“Defense has always been a bipartisan issue and when Biden was vice president, and previously as senator, I think he had a pretty good approach to national defense,” Hayes said. “He understood the need to work both sides of the aisle and to provide for the national defense.”
Biden continues to lead Trump in national and most battleground state polls, but the president is looking to deliver on another upset as his campaign did in the 2016 presidential cycle.
Whoever wins, the U.S. will need to update its military capabilities, despite it being “challenging times,” Hayes said.
Hayes doesn’t expect new record defense spending levels in the near future, and the Pentagon said it expects defense spending to remain flat no matter who is in office as the country continues to face challenges from the coronavirus.
“We have lost our technological edge to the Chinese and in some cases to the Russians and we’re going to have to invest more dollars into some of these new technologies if we’re going to be able to compete with these new threats,” Hayes said.
Raytheon, a large military contractor, saw shares close down 7% at $56.63 on Tuesday after the company posted mixed third-quarter results.
While the contractor topped Wall Street’s profit estimates, revenue came up short as sales in missiles and intelligence offerings missed expectations.
The stock is down more than 62% this year.
