Five Facts about the Defense Production Act
President Trump has ordered General Motors to make critical-care ventilators, after weeks of hearing calls to produce more medical equipment to combat the coronavirus. To do so, he invoked a 70-year-old law, the Defense Production Act.
- The Defense Production Act (DPA) was passed during the Korean War, and has been invoked several times since.
Enacted in 1950 to ramp up production of war supplies, the law empowers the president to direct businesses to shift gears and manufacture materials the government needs. The president can requisition property, impose wage and price controls, settle labor disputes, control consumer and real estate credit, and allocate raw materials towards the specified needs.
- Past administrations have used the law while waging military and cyber combat.
In the 1950s, the government directed mining and manufacturing resources to process aluminum and titanium, which the military needed. In 2011, while combatting Chinese cyberespionage, the Obama administration invoked the DPA to force telecommunications companies to provide information on the use of foreign-manufactured hardware and software in their networks.
- Governors and others had been imploring Trump to use the law to speed production of much-needed hospital equipment, but until late Friday, Trump said the mere threat of the law was enough to persuade companies to act.
More than 100 former national security officials wrote a letter last week asking Trump to use the law’s full powers. Several members of Congress had introduced a bill that would require him to do so. But Trump repeatedly demurred, as in this tweet on Tuesday: “The Defense Production Act is in full force, but [I] haven’t had to use it because no one has said NO!”
- After some harsh words with General Motors on Friday, Trump cited the DPA in ordering the company to start making ventilators.
Trump said the pandemic was “too urgent to allow the give-and-take of the contracting process.” GM noted it already had announced plans to build ventilators in Indiana, with Ventec Life Systems. Other U.S. companies are producing face masks, gloves, surgical gowns and other items needed to protect health providers.
- The U.S. Chamber of Commerce had urged Trump not to use the DPA’s full powers that give industries no choice but to act.
Companies are voluntarily “doing everything that the government is asking for them to do,” the Chamber’s chief policy officer, Neil Bradley, told Bloomberg News last week. He said the Chamber has lobbied the White House not to use the Defense Production Act’s full powers.
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