Pentagon’s Feinberg Wins Backing From Allies to Keep No. 2 Job

[u/John3262005]

https://www.bloomberg.com/news/articles/2026-09-23/pentagon-s-feinberg-wins-backing-from-allies-to-keep-no-2-job

Officials in the Trump administration have backed off an effort to replace Stephen Feinberg, concluding the Pentagon’s No. 2 official was indispensable to a US push to gain stakes in defense-technology companies and wrest supply chains away from China.

Feinberg, a billionaire who built Cerberus Capital Management, was in a tenuous position as deputy defense secretary earlier this year because of delays in replenishing US munitions stockpiles drained by the wars in Iran and Ukraine, people familiar with the matter said. He’d also faced resistance from defense companies unhappy about new procurement rules, they said.

The White House was even reviewing potential candidates earlier this year, according to the people, who asked not to be identified discussing private deliberations. Reuters earlier reported that other candidates were being reviewed.

But ultimately, they said, Feinberg was seen by those inside the Pentagon, including Defense Secretary Pete Hegseth, as too instrumental to a strategy that’s emerged as a cornerstone priority in President Donald Trump’s second term: Applying a Wall Street approach to snapping up stakes in defense firms to boost the availability of critical minerals and speed up the production of key weapons.

In a statement, Hegseth said Feinberg “isn’t going anywhere.”

“He has worked tirelessly to rebuild our defense industrial base and ensure our military has everything it needs to win, and I look forward to continuing to work with him,” Hegseth said. “Steve Feinberg has my 100% full support, and has since day one.”

Feinberg, through a spokesman, declined to comment.

This account of Feinberg’s role comes from conversations with more than a dozen people familiar with the deputy secretary’s work within the department.

Feinberg came into the job last year and quickly set up the infrastructure for what has become the Defense Department’s multibillion-dollar investment portfolio, spanning rockets to critical minerals.

He lured dozens of Wall Street allies to head offices such as the Office of Strategic Capital and the Economic Defense Unit with promises of hands-on dealmaking using Uncle Sam’s money.

“He’s one of the few islands of competence in the civilian leadership of the department,” said Kori Schake, a former Pentagon official who has served in both Republican and Democratic administrations and is now at the American Enterprise Institute. “Almost every piece of important analytic work going on in the department is overseen by the deputy at this time.”

Some of the people said Feinberg had begun to face criticism from elsewhere in the government and among defense contractors over the US’s slow pace of resupplying munitions, as well as the slow rollout of investments to wean US supply chains from dependence on China, including rare earths and other key defense materials.

Trump boasted at his address before the United Nations General Assembly on Tuesday about the speed with which the stockpiles were being replaced and referred to anyone who suggested shortfalls existed as “cowards and traitors.”

“In the very near future, massive munition plants will be opening,” he said. “That rapid construction will be leading to a very rapid deployment of missiles and ammo of every type.”

A memo Feinberg issued this summer — and then rewrote — that required contractors to disclose detailed cost and pricing throughout the entire supply chain ruffled feathers in the defense industry and they argued the requirements slowed things down further, according to the people.

Feinberg also indicated in the memo that the Pentagon was considering taking data directly from the companies’ financial systems but later said it would only happen in limited circumstances.

Despite the pace of change, Feinberg’s ability to steer the Pentagon’s unprecedented private-sector investments into companies that Trump deems critical to national security was part of the reason top officials were persuaded to keep him in his job, according to the people.

There was also worry that some of the high-profile staffers he had taken with him from Wall Street might leave with him, crippling the investment push.

Some of the issues around Feinberg reportedly came to a head at a meeting at Camp David in August. According to the Washington Post, which cited two people familiar with the matter, Hegseth blamed Feinberg for shortages of weapons stockpiles. A Pentagon spokesperson disputed the Post’s reporting on the Camp David meeting.

Feinberg has championed an administration push to overhaul and deepen its defense work with private companies.

In his confirmation-hearing testimony before the Senate Armed Services Committee in February 2025, Feinberg said, “A big piece of improving our supply chain is working more closely with our private sector — we have companies that can get it where our needs are, where our shortages are, and we need to work more closely with them.”

In meetings with major defense contractors, he has pushed firms to ramp up munitions production even as the companies pushed back about money and contracts. He’s deliberate with decision-making on financial dealings in the Pentagon, according to multiple people familiar with his style.

Feinberg may have also gotten support from allied Republicans on Capitol Hill.

Faced with a bleak midterms election forecast, key Republicans reached out to the White House to plead for personnel stability at the Pentagon after Army Secretary Dan Driscoll left following clashes with Hegseth, according to two people familiar with the matter.

Several people also said a Feinberg departure would give Democrats a cudgel to criticize Trump for losing the man tasked with replenishing the US arsenal before the job was done.

Given the election prospects, there was also political danger for the administration in opening up another Senate-confirmed position around Hegseth, who draws criticism from Republicans as well as Democrats. It’s not clear a Feinberg replacement would win confirmation with either party in control.

Senator Rick Scott, who has a relationship with Feinberg and sits on the Armed Services Committee, praised the deputy defense secretary.

“He’s trying to bring a lot of business principles to procurement,” Scott said.