Politics

Lawmakers are pressing the Pentagon for more details about the department increasingly acquiring equity stakes in defense companies as part of the effort to strengthen the country’s defense industrial base.

During a recent House Armed Services Committee hearing, lawmakers from both parties said they support the Defense Department’s use of new financing tools to rebuild fragile supply chains, but want “clear answers on when equity investments are the right approach.”

“How does the department determine when equity investments are necessary? And how do you deal with the possible market implications or distortion that could be caused by that?” HASC Chairman Mike Rogers (R-Ala.) said.

While not unprecedented, the federal government has historically directly intervened in the economy only during periods of extraordinary crisis. During the 2008 financial crisis, for instance, the government injected billions of dollars into the banking, auto and insurance sectors to help stabilize the economy.