What is the Defense Production Act?

Can auto makers shift gears and make emergency equipment?
Can auto makers shift gears and make emergency equipment?
A 70-year-old law could help the country navigate a global pandemic of the COVID-19 virus. It is called the Defense Production Act of 1950.

     On March 27, President Donald Trump signed a presidential memorandum directing the Secretary of Health and Human Services to use authority under the Defense Production Act to require General Motors Co. to accept, perform and prioritize federal contracts for ventilators. That decision came at the end of a week in which administration officials had sent mixed signals about how or whether they wanted to use the act. Here is the rundown, along with links and sources for further study:

The history: The act was inspired by "the First and Second War Powers Acts of 1941 and 1942, which gave the executive branch broad authority to regulate industry during World War II," notes the Congressional Research Service's publication, The Defense Production Act of 1950. "The beginning of the Cold War with the Soviet Union in the late 1940s and the North Korean invasion of South Korea in June of 1950 caused the Truman Administration to reconsider the need for stronger executive authority in the interest of national defense."

First signed: President Harry Truman signed the act Sept. 9, 1950, and afterward, made a radio and television address.
     He began by talking about the situation in Korea and then built the case for the nation's military needs. "This defense program cannot be achieved on the basis of business as usual. All of us -- whether we are farmers, or wage earners, or businessmen -- must give up some of the things we would ordinarily expect to have for ourselves and our families. The danger the free world faces is so great that we cannot be satisfied with less than an all-out effort by everyone."

An extension: Soon, Truman wanted more. In April 1951, he sent a message asking Congress to extend the law. "Since June 1950, the government has placed orders for planes, tanks, guns and other military equipment, facilities and supplies in the amount of over 26 billion dollars. As yet, only a small part of these orders have been filled and the goods delivered."

What it does: The law's stated objective is to provide for national security. This may call for "the diversion of certain materials and facilities from ordinary use to national defense purposes, when national defense needs cannot otherwise be satisfied in a timely fashion."   As such, the law grants the president "an array of authorities to shape national defense preparedness programs and to take appropriate steps to maintain and enhance the domestic industrial base." (Find the complete law on the website of Congress.gov.)

The current need: Just as in wartime, the country is facing a dramatic need -- but not for tanks, planes and guns. This time, we need lifesaving medical equipment. But it is one thing to ask automakers to start churning out tanks -- it's not that far out of their wheelhouse. It's another thing to ask them to build ventilators. Even so, U.S. automakers have taken steps to convert plants to manufacture the equipment.



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