What Does the Defense Production Act Actually Do?

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Governors and health experts, desperate for more ventilators and Personal Protective Equipment, are imploring Trump to start using the Defense Production Act. What it is and how does it work?

What is the Defense Production Act?

A very brief history: The Defense Production Act passed in 1950 as a response to the Korean War. The country needed a way to quickly mobilize resources for the war effort, and this Act was the answer.

The Act does three things: 1) It allows the President to force businesses to fulfill orders from the federal government necessary for national defense. 2) It allows the President to create regulations or orders to “allocate materials, services, and facilities” for national defense. 3) It allows the President to control the economy so that scarce resources are available for defense needs first.

What this means for our current situation is that the federal government can invoke the Act to force private businesses and manufacturers to fill federal orders for medical equipment before any one else gets those items. One thing that the law does NOT do is have a mechanism to increase the overall production of the needed items.

Has Trump invoked the Defense Production Act?

Yes. He has signed an executive order that technically invokes it. He has designated that ventilators and personal protective equipment (PPE) are considered essential under the law.

HOWEVER, even though he has invoked the Act, he has not yet used the power he now has to force businesses to produce these items.

Two days ago, FEMA said they were going to use the Act to get 60,000 tests but reversed their position hours later saying that they had secured the tests in another way. It is not yet clear what FEMA did to secure the tests (or really, if they actually have.)

Trump has come under increasing criticism for not ordering businesses to start providing these critical items.

How the Act could be used

Trump could use the Act to do the following: 1) If there are companies making ventilators that are slated to go to say, Europe, Trump could order that those ventilators stay in the U.S. instead to be distributed to hospitals. 2) Trump could provide an economic incentive to manufacturers to make ventilators by guaranteeing that the federal government would buy any extra ventilators the hospitals don’t end up buying over the next 6 months. 3) Trump could establish “voluntary agreements” where manufacturers retool their factories to make necessary equipment like ventilators. (Source)

Why hasn’t Trump used it yet?

That’s the question of the hour, isn’t it? Why hasn’t Trump used this power? He has made noises that just invoking the Act is essentially a “threat” and that’s why some businesses are voluntarily helping the government. He also throws in some dumb analogies about Venezuela and “nationalizing” businesses.

What’s weird about all this dithering is this fun fact: Trump has already used the Defense Production Act. He used it in 2017 to provide technology in the space industrial base. (Source)

The reason why Trump should use it right away is because what is needed right now is a nationwide coordinated effort to secure equipment that every hospital will need. Private companies making their own individual decisions about how and when to help won’t get the equipment where it is needed. Only centralized leadership can do that. Otherwise what you get is what we currently have: chaos.

New York Governor Andrew Cuomo illustrates the problem of having each state fend for themselves: “I’ll contract with a company for 1,000 masks. They’ll call back 20 minutes later and say the price just went up because they had a better offer. And I understand that: Other states who are desperate for these goods, literally, offer more money than we were paying.” (Source)

Trump’s inaction is forcing each state to fend for themselves, and in actuality, compete with every other state for the same equipment. Not to mention that all of this is far more expensive than if the federal government controlled the buying of the equipment.

What we can do

Here is the excellent suggestion from Rogan’s List as I couldn’t say it any better:

Let’s tell our Congresspeople to demand that Trump employ the power he has so blithely relegated to himself.  This is not a moment to depend on industrial voluntarism; it’s a moment to force the production of life-saving medical supplies.

Thank you for considering this action!

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Categories: Explainers

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3 replies

  1. I see contradictory statement re: whether Trump can force more production. “One thing that the law does NOT do is have a mechanism to increase the overall production of the needed items.” vs the last quoted section, “it’s a moment to force the production of life-saving medical supplies.”.
    Could you clarify?

    Liked by 1 person

    • I admit it’s a bit unclear. What I understand is that the president does not have the power to force businesses with, for example, manufacturing equipment to stop making coffee machines and instead make ventilators. That said, he could incentivize a company to do just that by promising to buy a certain number of these items to offset the loss the business would otherwise have.

      Like

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