Not sure if the Defense Production Act is going to do much for us

The latest move out of the White House to combat the coronavirus should probably give us pause. Well… actually a number of things they’re talking about are unsettling for various reasons, but the most recent one was the announcement that President Trump is invoking the 1950 Defense Production Act (DPA) to push manufacturers of certain critical medical devices and products that we anticipate needing if the number of seriously afflicted people starts to skyrocket. In this case, he’ll probably be targeting ventilators, among other things. (NBC News)

President Donald Trump said Wednesday he is invoking the Defense Production Act to mobilize U.S. private production capacity to combat the coronavirus outbreak.

Trump also said his administration is “suspending all foreclosures and evictions until the end of April” to help those affected by the virus.

The Defense Production Act, enacted in 1950, allows the president to force American businesses to produce materials in the national defense, such as ventilators and medical supplies for health care workers. Senate Minority Leader Chuck Schumer, D-N.Y., called on Trump this morning to use those authorities to address a shortage of medical supplies.

For those not familiar with this dusty old piece of legislation, the DPA was passed at the beginning of the Korean War and it empowers the President to force private industry to sign contracts and fulfill orders for products deemed critical to our national defense. When you’re gearing up for a war and don’t have enough ammunition, body armor or anything else related to the effort, it’s a handy tool to have.

But when you’re fighting a “war” against a virus? Keep in mind that Chuck Schumer wanted the President to do this. (So you know it has to be a good idea, amirite?) I have no doubt that we could use more ventilators and probably a lot of other medical supplies as well. But there are a couple of points to make here that leave me feeling a bit nervous.

We already learned that some of the primary manufacturers of ventilators commonly used in hospitals are aware of the situation and can ramp up production if needed. Some of them are probably already doing that, but they have to receive the orders first. The point is, they didn’t need to be ordered by the federal government under the DPA to produce the goods. They just needed someone to sign a contract.

Keep in mind that we’re talking about the free market here. If there are orders coming down the pipeline for thousands of machines that sell for tens of thousands of dollars, do you really think the manufacturers would need anyone to force them to take the money? The big companies who produce this equipment have been dreaming of a day like this. They’re probably going to declare a company holiday.

On a more general level, the DPA is also problematic because it’s so open to abuse. The act hands the president a lot more power than just the ability to tell a couple of companies to produce X number of widgets as quickly as possible. Here are just a few of the other authorities granted to the White House while the act is in effect:

Requisition property
Force industry to expand production
Impose wage and price controls
Settle labor disputes
Control consumer and real estate credit
Allocate raw materials

Those are some pretty expansive powers. And we’re not even getting ready to fight a new war. This is a response to a national emergency in the form of an epidemic.

Please note that I’m not singling out Donald Trump exclusively with these concerns. He’s hardly the only president to use this authority, even in the modern era. Barack Obama invoked the DPA to deal with reticent telecommunication companies over matters of heavy encryption. Reagan invoked it any number of times over various supply issues during the cold war.

Still, this is the sort of executive power that has the potential to run amuck once the genie is out of the bottle, so it should really be used sparingly. And using it to get a bunch of ventilators rolling off the production lines of companies that would be more than happy to take the government’s money already doesn’t sound like a supply chain emergency to me.

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David Strom 2:40 PM | July 24, 2024