The Defense Production Act, a brief description and history
Prior to its invocation during the COVID-19 outbreak, most people hadn’t heard of it, but the Defense Production Act (DPA) has actually been used in one situation after another since its initial crafting in 1950.
Ventilators
On March 18, 2020, in response to the outbreak, President Trump issued an executive order that defined ventilators and protective equipment as "essential to the national defense", the standard required by the DPA. He stated that he he hoped he would not have to enact it, even as certain Congressional members were advocating for same. Instantly, media picked up on this generally unfamiliar administrative emergency tool, and yet, the analysis and discussion was often incomplete and confused.
THE DPA
Created in September 1950 the DPA passed by the U.S. Congress was used during the Korean War to establish a large defense mobilization infrastructure and bureaucracy. President Harry Truman instituted wage and price controls, strictly regulated production in heavy industries such as steel and mining, prioritized and allocated industrial materials in short supply, and ordered the dispersal of wartime manufacturing plants across the nation. Originally it was considered to assure wartime products in support of the Armed Forces engaged in combat.
Since then it has been revised, expanded and used a number of times, primarily by the Department of Defense to promote and ensure the promotion and development of certain technologies deemed critical to the protection of National Security and National Health Security.
In short, the Act allows certain actions and considerations.
It states that the US Government has a priority to improve the industrial base and technological development
It allows for the diversion of certain materials and facilities from ordinary use to National Defense purposes when national defense needs cannot be otherwise satisfied in a timely fashion.
It prohibits and criminalizes hoarding, in particular, items marked for resale.
It allows for price and wage controls, though this requires congressional action.
Pursuant to revisions in 2008-9 it specifies that agencies should apply under FEMA.
It also requires establishing a Defense Production Act Fund and stipulates that the President shall identify a Fund manager whose responsibility it is to assure accountability, transparency and to report to Congress.
The Fund
The act states that the US Government is expected to expected to create and maintain a Fund to properly subsidize and support the directions of the President. It is to be maintained in a timely fashion, and to prevail for the duration of the enactment. In the language of the Act Treasury is called out, though it is not prescriptive as to who the Fund manager must be. It does specify that the amount amount existing in the Fund should not exceed $750,000,000.00 at the end of a year. This is not to indicate that the overall expenditure is limited to that amount, but that said amount should not languish in the Fund. It is meant to be used to protect the people.
There are also provisions for industrial Resourcing and Critical Technology Shortfalls if it exceeds 50 million for the committee on Banking Housing and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives in the writing of the guaranteed amounts. Additionally, any liabilities against the US are an obligation against the Fund.
This is by no means a comprehensive assessment or description of the workings of the DPA, but it does provide an overview for quick understanding of the toolbox of powers, authorities, and privileges at the executive disposal to maintain and enhance the domestic industrial base.
Matthew Minson, MD is a physician and has served as a senior health official at the local, state and federal level. He is the author of a series of books championing individual health and social advocacy published by Texas A&M University press and has been a contributor to C-Span, NPR, and PBS. His website is www.preparetodefendyourself.com
