The Defense Production Act, or DPA, is a law passed in 1950 by Congress and signed into law that grants the President the power to influence domestic industry in the interest of national defense.
During WW2, prior to the DPA’s passing, the War Powers Acts were used to compel private sector factories to aid in producing supplies that were needed during the war. Since these responses were successful, Congress eventually came to pass the DPA which extended the language of “national defense” to include preparedness and recovery from domestic issues, such as,“natural hazards, terrorist attacks, and other national emergencies.”(1)
In an effort to fight the COVID-19 Pandemic, President Trump is invoking the DPA, “in case we need it,” which would put scarce medical supplies, such as masks and ventilators, on the front lines of production.
If put to use, private industry production would have to prioritize orders from the federal government, specifically from the Department of Defense (DOD). All other private orders would be delayed until all orders from the federal government are completed.
Additionally, through Article 3 of the DPA, the federal government is able to give out guaranteed loans (with or without interest) to the private companies they are appealing to, which may not be able to otherwise complete these orders due to a lack of credit.
In a trying economic time when production is down, a move like this could create some stimulus in the manufacturing sector. Additionally, this type of action is seen as critical to ensuring the United States HealthCare system doesn’t run out of supplies.
We can expect a follow through within the next few days or weeks.
Copy Edited by Megan Lachman