Arlington, Va. – In case you missed it, Aerospace Industries Association (AIA) President and CEO Eric Fanning submitted full testimony for the record for the December 5 House Select Committee on the Chinese Communist Party’s hearing “Rebuilding the Arsenal of Democracy: The Imperative to Strengthen America’s Defense Industrial Base.”
The hearing centered around the competition between the United States and the Chinese Communist Party (CCP) as tensions between the two nations rise and logistics in the Indo-Pacific grow increasingly contested. In his written testimony, Fanning highlighted the importance of the defense industrial base to maintaining the United States’ competitive advantage over China and offered policy solutions to strengthen the resiliency of this strategic asset.
“Well-meaning but burdensome statutes and government policies drive up the cost and complexities of doing business with the federal government. As a result, some companies within the DIB are choosing to no longer do business with the DOD in favor of other commercial industries, reducing the competition needed for the DIB to thrive and for DOD to consider the broadest range of technological solutions,” Fanning warned.
To help alleviate some of the burden, Fanning urged Congress to focus on right-sizing the regulatory regime, encouraging new entrants, and sustaining companies up and down the supply chain.
As the CCP makes aggressive investment into its military and defense innovation, Fanning encouraged the Select Committee to promote U.S. competitiveness by restoring competitive R&D tax amortization rules to strengthen our global R&D posture relative to China.
Further, U.S. foreign and trade policy can also bolster the health of the defense industrial base. “It is important the U.S. ease regulatory burdens that both inhibit closer cooperation with allies and trusted partners and strengthen domestic manufacturing and supply chains. Easing technology transfer requirements and promoting the seamless integration of U.S. and allied industrial bases and establishing resilient domestic supply chains are key to a U.S. posture that effectively deters and out-innovates our adversaries. We’ve seen great progress so far in this domain from the U.S. and our partner governments, but more can be done,” Fanning stated.
In the face of the CCP’s unprecedented investments into their defense industrial base, Fanning urged Congress to return to regular order and send clear demand signals through the annual government funding process. “As our military faces a growing, geographically diverse, and evolving mission set, the DIB, which is an essential element of troop readiness, is confronted with these tests as well. Effectively addressing these threats will require focused changes in federal policy and investment, which continues to be unpredictable and inconsistent,” Fanning said. “Even as China continues its unprecedented investment in its military, the U.S. Congress continues to debate cutting federal investment in defense, budget caps, supply chain disruptions and related material shortages.”
You can read Fanning’s full testimony here.
