President Trump invoked his authority under the Defense Production Act of 1950 last weekend to compel General Motors to work faster on its contract to make ventilators. His action wasn’t a moment too soon.
The president wasted precious time because of his administration’s caution regarding DPA powers. Passed at the start of the Korean War, the statute allows the federal government to reshape American industry for national defense. The president can expand the supply of critical goods, services and technologies by offering companies direct loans, loan guarantees, direct purchases and purchase commitments. He can also require companies to prioritize government contracts over those with other customers. Today that can help produce medical equipment, medicines and vaccines.
The administration first discussed using the law in late February but hesitated to invoke its authority, instead leaving private actors like GM to plan their production processes independently. This preference for private action makes sense, but it’s crucial to note that invoking DPA authority doesn’t risk a long-term slide toward central planning. For example, the Pentagon used it during the Iraq war to speed up the production of mine-resistant vehicles and counter-explosive equipment. DPA contracts are standard when buying major weapons systems such as tanks, aircraft and missiles. Civilian agencies have relied on DPA authority, such as when FEMA ordered equipment to help restore rail service in the region damaged by Hurricane Katrina. For emergency projects of limited time and scope, the contractors involved cooperate with government.
In response to Covid-19, these tools are critical to help companies supply medical equipment in accordance with the necessary timeline, scale and destinations. Ford, General Electric, 3M and others are already adjusting their production lines, but the president can use the DPA to ensure the production of supplies and personal protective equipment is coordinated among competing companies and matched with shifting public need.
Ideally, the federal government would have initiated DPA industrial measures when the coronavirus first surfaced in Wuhan to hedge against the possibility of the medical emergency we now face. The Department of Health and Human Services could have identified bottlenecks to smooth the production ramp-up for test kits, ventilators and respirators. Then, advance contracts and purchase agreements might have minimized the scarcities we’re now seeing. These should become standard steps in any future national preparedness plan for serious outbreaks of respiratory viruses.
As the government catches up, it should prepare to use the DPA for the next phase of the effort: aiding the development and production of antivirals and vaccines. The administration can speed the process with advance purchase agreements and volume guarantees. It can also secure many of the necessary components to maintain access for American research labs. Finally, the government can enlist Silicon Valley to develop tools to track and predict the spread of the virus.
There’s no doubt that Congress and the media ought to pay close attention to how the DPA is being used, watching out for needless orders and assessing the administration’s sense of public need. But if, as the president says, this is a war, then he should act like it. He must use all the tools available to him decisively.
Ms. Eaglen is a resident fellow at the American Enterprise Institute. Mr. Greenwalt was deputy undersecretary of defense for industrial policy, 2006-09.
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