The sector has benefited from increased military spending in the past five years, but several lobbyists and industry insiders argue that long-term profits depend on steady defense budgets and predictable investment in next-generation weaponry. 

And some within the industry believe that Murtha could be the man with whom to hedge their bets. 

He is a longtime supporter of the industry and a hawk, but has emerged in the past year as his party’s most vocal critic of the Iraq war — urging withdrawal of U.S. troops. 

And despite heightened focus on curbing congressional pork-barrel spending, Murtha has opposed earmark reform.

He finds himself in an interesting position — a vehement critic of a war that has boosted defense contractors’ coffers, but also a staunch supporter of a military and defense industry fed on big-ticket programs and well-placed earmarks. 

“We are mortgaging our future on this war,” said one lobbyist, who represents several major defense companies. “Most people want to see the war over to go to the next-generation weapons.”

Military contractors benefited when Congress approved the $448 billion 2007 defense appropriations bill, which included $70 billion in emergency spending for Iraq and Afghanistan. 

The Bush administration has spent about $507 billion on Iraq, Afghanistan and the rest of the war on terror since 2001.

Much of the emergency money is spent on troops and supplies, but lawmakers also made allocations for weapons programs.

“A lot of the money is spent replenishing systems,” said the lobbyist.  “War is not good for business. The industry wants to produce the new stuff rather than see the money go to the war.” 

Big-ticket defense items, such as the F-22 fighter, the multi-national Joint Strike Fighter, the Army Future Combat Systems and the Navy’s next generation DD (X) destroyer and Littoral Combat ship, have nothing to do with the current war, said Steve Ellis, vice president for programs at watchdog organization Taxpayers for Common Sense.

Lucrative war business comes to those who produce counter-improvised explosive devices, armored vehicles, bullets and other personnel protection systems, said Ellis and other defense industry insiders. 

“Part of the reason the defense industry has not rebelled as much is that the defense budget has grown and there’s a lot of money to go around,” said Ellis. “The money we spend on the defense industry is enormous and they have not felt the pressure.”

But if tension builds between traditional defense spending and war spending, “then we would start hearing some mumbling in the defense industry.” 

Analysts expect the purse strings to tighten on defense in the coming years. For the first time since Sept. 11, 2001, President Bush did not receive his full budget defense request.

Murtha knows how to spread the wealth. “The defense industry wants someone who supports a healthy defense budget and who supports bringing new technology,” said a defense lobbyist. “Most of the defense industry would want to see the war end tomorrow.”

Murtha’s support of a well-fed defense industry is paying off for him and his party.  He is again the top recipient of defense industry money in Congress.  The defense industry contributed $371,700 to Murtha’s campaign.

In 2004, he ranked third only to presidential candidates Sen. John Kerry (D-Mass.) and George Bush, but in 2002 he was No. 1.

By comparison, Rep. Bill Young (R-Fla.), chairman of the defense appropriations panel, ranks as No. 18 with $99,000 in his coffers from the defense industry.

Young consistently has ranked towards the bottom of the top 20 recipients of defense money.  But unlike Murtha, Young, a stalwart supporter of the military and the defense industry, is not an avid fundraiser and when he holds an event he is known not even to print a ticket price.

Not so Murtha, a leading Democratic fundraiser who has doled out money to the party.

Because he has been a hawk and a supporter of the military, Murtha’s criticism of the Iraq war and his call for troop “redeployment” gave Democrats political cover.

If the Democrats win back the House this year, Murtha is throwing his hat in for the Majority Leader position, banking on his close relationship with Minority Leader Nancy Pelosi (D-Calif.). Murtha faces staunch competition from Minority Whip Steny Hoyer (D-Md.).

Some in the defense industry hope Murtha becomes majority leader, while others say he would be better suited at the helm of the defense appropriations committee.

As a majority leader, Murtha would bring defense to the forefront and stave off cuts that the Democrats have traditionally made, some industry insiders say.

In such a position, Murtha would determine how the budget is put together and the amendments that would come to the floor, but he would lose the day-to-day touch on the appropriations committee, which to the defense industry is more important, said an industry source.

Hoyer would not be a bad bet for the defense industry as majority leader, because he has also been a strong supporter of the sector and is in close contact with the Pentagon and the military branches, said the source.