//  3/30/20  //  In-Depth Analysis

By Charlie Miller & Brianne Gorod | Constitutional Accountability Center

It’s been over two weeks since President Trump declared the COVID-19 pandemic a national emergency, yet he’s still refused to use one of the chief tools in the federal government’s arsenal for addressing national crises.  Passed in 1950 to ensure that the federal government can harness the productive capacities of the private sector in times of crisis, the Defense Production Act (DPA) has been used on numerous occasions in the past, including by this very Administration.  It’s way past time for the Administration to use it now.

The DPA authorizes the President to direct the “allocation of materials, services and facilities” to “promote the national defense,” which includes, among other things, homeland security issues.  Exercising his authority under the DPA, the President could require non-essential industries to turn their manufacturing prowess toward producing the supplies necessary to fight this pandemic and save lives.

Indeed, governors from around the country have called on the President to use this vital authority to prioritize contracts for medical supplies, especially surgical masks, gloves, and gowns.  Governor Andrew Cuomo of New York, the state with the most confirmed COVID-19 cases and deaths, has called for “the federal government to use the DPA so that we can get the medical supplies we desperately need.”  Right now states trying to buy supplies are, according to Illinois Governor JB Pritzker, “competing against each other, we’re competing against other countries. It’s a wild west, I would say, out there.

Yet despite mounting public pressure, dire warnings from medical experts, US unemployment claims reaching 3.3 million, and the United States surpassing all other countries in confirmed COVID-19 cases, President Trump has tweeted that he will only invoke the DPA “in a worst case scenario in the future.” 

And during a March 22 briefing at the White House, President Trump expressed concern that the DPA is tantamount to nationalization, “you know, we’re a country not based on nationalizing our business.  Call a person over in Venezuela; ask them how did nationalization of their businesses work out.  Not too well.  The concept of nationalizing our business is not a good concept.”  The President’s public statements on the DPA have mirrored those of the Chamber of Commerce, one of the loudest voices opposing invoking the DPA.

And so this critically important authority goes unexercised.  Indeed, although the President garnered headlines on Friday evening for purportedly ordering GM to produce ventilators under his DPA authority, the President’s formal memorandum did nothing more than order the Secretary of Health and Human Services to “use any and all authority available under the Act to require General Motors Company to accept, perform, and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate.”  (The emphasis here is ours.)  As one commentator put it, “today’s presidential order re: GM production doesn’t do anything new (as a legal matter).”

Importantly the President’s stated reasons for not using the DPA are inconsistent with the DPA’s history and past practice under the law.  The DPA does not “nationaliz[e] . . . businesses,” nor was it passed to be used only in a “worst case scenario” (though our current emergency could certainly be seen that way).  In July 1950, as the Korean War escalated and the nation confronted economic turmoil, President Harry Truman wrote to Congress and asked for legislative action that would ensure the country could meet its growing national defense needs without harming the economy.

As Truman explained, the country needed to “adopt such direct measures as are now necessary to assure prompt and adequate supplies of goods for military and essential civilian use.”  To that end, he sought legislation “authorizing the Government to establish priorities and allocate materials as necessary to promote the national security; to limit the use of materials for nonessential purposes; to prevent inventory hoarding; and to requisition supplies and materials needed for the national defense, particularly excessive and unnecessary inventories.”

The Defense Production Act of 1950, signed a mere two months after Truman’s request, was designed to allow the President to effectively harness American production for national defense purposes while maintaining stability in the still-post-World War II economy.  And, contrary to President Trump’s concerns about nationalization of business, the DPA was written with the express intent that the federal government act without “‘undue’ disruption of production for civilian uses and ‘within the framework, as far as practicable, of the American system of competitive enterprise.’”  The goal, in other words, was to prioritize and encourage private participation before any coercive measures would have to be taken.  “Basic to the policy so expressed is the belief that the competitive enterprise system ultimately is the best guarantee of national defense.”

Indeed, even the most aggressive powers authorized by the law—the powers to requisition materials and stabilize prices and wages, both of which were terminated in 1953—were predicated on the primacy of public-private cooperation.  The need to requisition had to be “immediate and other means exhausted before the President [could] exercise the right of requisitioning.”  And the President was “required to determine compensation promptly . . . and to return the property to the owner at a fair price, or dispose of it otherwise, when the defense need [was] ended.”

Since the law’s passage in 1950, and through its most recent re-authorization just last year, presidents have repeatedly invoked the DPA to address national and even regional crises.  For example, when in 2000 and 2001, California faced severe electricity shortages due to market manipulations that threatened the state’s population with blackouts, President Clinton invoked the DPA to prioritize contracts for natural gas to the state’s energy providers.  As the Administration explained, “shortages of energy supplies” could affect our national defense.

In a similar vein, the Obama Administration used the DPA to prioritize the production of biofuels in the name of energy security.  According to the Obama Administration, its use of the DPA “enhance[d] national security by supporting the creation and commercial viability of a defense-critical domestic biofuels industry to advance alternatives to petroleum.”

And the Trump Administration Federal Emergency Management Agency used the DPA in 2017 to respond to catastrophic storms.  Among other things it “prioritiz[ed] contracts for manufactured housing units, food and bottled water, and the restoration of electrical transmission and distribution systems in Puerto Rico.”

Indeed, this Administration has invoked the DPA under arguably far less serious circumstances than those currently confronting the country.  In 2017, President Trump determined that “radiation-hardened microelectronics, radiation test and qualification facilities, and satellite components and assemblies” are “critical to national defense” and classified them as such under the DPA. The President’s memo to the Secretary of Defense stated, “Without Presidential action under this Act, the United States space industrial base cannot reasonably be expected to adequately provide those critical technology items in a timely manner.” 

Clearly, President Trump’s present concerns have not always plagued him.

In sum, there is no good reason for the President not to use his DPA authorities to respond to the COVID-19 pandemic.  The law was passed precisely so that presidents could harness the power of the private sector when national crises demanded it.  Using DPA authorities to prioritize the manufacture of medical equipment and direct that equipment to the state and local authorities most in need would be consistent with previous administrations’ usage of the Act and should be done immediately.

When President Truman asked Congress for the authorities that became the DPA, he warned that “[w]e must be sure to take the steps that are necessary now, or we shall surely be required to take much more drastic steps later on.”  That is exactly the situation that we now face.


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