Defense Production Act: What You Need to Know About the Laws Trump Can Use to Order More Ventilator

Defense Production Act: What You Need to Know About the Laws Trump Can Use to Order More Ventilator

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President Donald Trump has free access to laws that can speed up the production of items needed by hospitals during a coronavirus pandemic. He is dusting from the Defense Production Act, but has expressed resistance to using it.

1. What is the Defense Production Act?

This is a US law enacted under President Harrit Luhmann in 1950 to help the United States in the Korean War. Inspired by similar legislation passed during World War II, the DPA has empowered governments to intervene in the private sector by requiring manufacturers to prioritize defense production. Was. In addition to defense, it can be used for critical infrastructure, homeland security, stockpiling and space related products. Truman used DPA to limit wages and impose price controls on the steel industry. The other powers granted to him by law-the management of materials, distributed consumer goods, and consumer credit-were allowed to expire in 1953.

2. Has it been used since then?

Yes, and without headlines. For example, the Pentagon uses the law “on a daily basis” to ensure that military orders are prioritized within the US supply chain. The Federal Emergency Management Agency has used it after a natural disaster to prioritize contracts for manufactured homes, food, bottled water, and other supplies. Twenty years ago, President Bill Clinton used a law to order suppliers to sell natural gas to California-at a price that some senators said were far below the market-facing a credit crunch Supported energy utilities. Trump himself has adopted elements of the law to facilitate the production of sensors that detect rare earth elements, small drones and submarines, among other products. His administration also considered using it to help the coal and nuclear industry.

3. Are laws used in the fight against coronavirus?

Faced with a shortage of respirators and personal protective equipment used by doctors and nurses, the governor has called on the Trump administration to use this law to expand production. On March 18, Trump officially launched the law with an executive order to “prioritize the allocation of health and medical resources to respond to the epidemic of Covid-19.” However, four days later, on March 22, Trump said that under the law, “ a huge number of companies, ” including 3M Co and General Electric Co., had voluntarily made progress to make the necessary equipment. He said no action was necessary. “The federal government is ready to force cooperation when needed. I didn’t know that was the case,” he said. But he also suggested that using the law meant “nationalizing our business” as a socialist country like Venezuela. [Actually, the law does not mean that the government will take ownership of a company; it does mean nationalization.]

The Defense Production Act was fully enforced, but nobody said no, so there was no need to use it. Millions of masks are returning to the state. —Donald J. Trump [@realDonaldTrump] March 24, 2020

4. What can the government do under the law?

In addition to requiring that orders be prioritized, the government can provide incentives for manufacturers, such as providing direct loans and loan guarantees. Buy equipment for them. Waives antitrust restrictions that could hinder industry cooperation. The law allows the government to control the use of scarce resources, such as requiring businesses to book materials to meet federal mandates. Stocks and price gouging are prohibited for materials designated by the President as rare. Failure to comply with the law can result in fines or imprisonment.

5. Does the US Congress need to sign?

Congress typically needs to pass legislation to approve the legislation for certain projects that cost more than $ 50 million. However, lawmakers discussed a temporary waiver of various notification and approval requirements so that the government could act more quickly.

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