Trump is leaving DPA powers on the table
Trump is increasingly invoking the Defense Production Act of 1950 (DPA).
But he’s leaving a lot of power on the table.
Thread👇 (politico.com/news/2020/04/0…)
First, a timeline of what the administration has actually done
On January 31, Secretary of Health and Human Services Alex Azar declared a public health emergency. On March 13, the White House issued Proclamation 9994, which declared a national emergency. (govinfo.gov/content/pkg/FR…)
The declaration came two days after the World Health Organization declared the outbreak a pandemic, and after 36 Americans had died from COVID-19.
Members of Congress urged him to use DPA, as the declaration itself doesn’t change production patterns. (andylevin.house.gov/sites/andylevi…)
5 days and 90 deaths later (3/18), Trump issued Executive Order 13909, which determined that “health and medical resources needed to respond to the spread of COVID-19” were “scarce and critical material essential to the national defense”. (federalregister.gov/documents/2020…) This opened up the possibility of using DPA authorities to force private companies to prioritize government contracts (or to directly plan the economy through allocation), but did not directly compel any result. A week later (and after 675 deaths) on March 25 (after 675 deaths), Trump issued Executive Order 13910, which allowed Azar to designate materials as “scarce. (federalregister.gov/documents/2020…)
This opened up the possibility of using DPA authorities to force private actors to not hoard goods, but did not directly compel any result. As it happened, that same day Azar, pursuant to EO 13910, released the following list of designated scarce materials — including masks, gowns, respirators, and ventilators. (hhs.gov/about/news/202…) (federalregister.gov/documents/2020…)
Finally, on March 27 (after 900 deaths), Trump issued Executive Order 13911, giving HHS and Homeland Security the power to make loan guarantees, loans, purchases, and subsidies, and to directly install goods in private facilities. (federalregister.gov/documents/2020…) This last EO also allows HHS and Homeland Security to propose “voluntary agreements” between private sector actors that would otherwise violate anti-trust rules. To date, actual activity under and enforcement of these EO’s appears to have been modest. On March 27, the White House issued a memorandum ordering Azar “to require General Motors Company to accept, perform, and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate.” (whitehouse.gov/presidential-a…)
Sources told Politico that nothing has really become of this memo, and that officials aren’t doing systematic follow up with GM. (politico.com/news/2020/04/0…) On March 30, the Department of Justice arrested Baruch Feldman of Brooklyn per EO 13910 for coughing on FBI agents after they questioned him about running a hoarding scam on WhatsApp called “Virus2020!” (justice.gov/usao-nj/pr/bro…)
Yesterday, April 2 (after 4,700 deaths) we saw two more memos.
First, the WH called on Azar “to facilitate the supply of materials” to produce ventilators to the subsidiaries or affiliates of 6 companies. (whitehouse.gov/presidential-a…)
Then, the WH made a second memo instructing the Secretary of Homeland Security (through FEMA) “to acquire, from any appropriate subsidiary or affiliate of 3M Company, the number of N-95 respirators that the Administrator determines to be appropriate.” (whitehouse.gov/presidential-a…)
CNBC today reports that the three memos naming the 8 companies were largely calling for things that were redundant with what the companies were already doing. (cnbc.com/2020/04/03/cor…) This calls back to 2017, when Trump took credit for production decisions that companies were going to make anyway. (theatlantic.com/business/archi…) The response to date also leaves DPA’s nationwide planning on the table, as ex FEMA officials have called for in reporting by @AnaSwanson. This would be a good moment to showcase a fuller range of economic nationalist tactics than just tariffs.
There’s other DPA powers Trump hasn’t even floated using, like bringing in CEOs and other private actors with knowledge of the relevant supply chains to serve in government under an expedited hiring process and in a National Defense Executive Reserve.
To be fair, Trump is not alone in letting DPA powers emaciate. According to CRS, the supply chain planning /allocation authority hasn’t been used since the Cold War. DPA loans and loan guarantees haven’t been made in 30 years. And no agency currently has an active National Defense Executive Reserve program. (fas.org/sgp/crs/natsec…)
And a lot of the real juice of the original DPA (which has been reauthorized 50 times) — powers to requisition property, enact price and wage controls, settle labor disputes, and control real estate credit — were repealed in 1953. Sidenote: The House Report accompanying the DPA Amendments of 1953 noted that it was repealing this authority because of course Congress would quickly give the president that planning authority in an emergency. It’s not so clear that either chamber would go along with that today.
And the original DPA of 1950 was not beloved by FDR’s industrial planners, who thought it didn’t go far enough, calling for full control of trade flows, fearing for increases in cost of health care to everyday people, and more.
Here’s New Dealer Bernard Baruch in the 1950 hearings: “A system of priorities without price control is a foundation built on shifting sands… Throughout our economy, direction must replace drift. Purpose must replace aimlessness.”
And some pretty pointed negging of senators.
Finally, just because the president has (or could have) loads of powers, that doesn’t mean he’ll have adequate funding. Congress can appropriate more. (propublica.org/article/the-de…) If and when further DPA actions are taken, I’ll add to this thread. I hope it’ll be a long one!
Oh, a few other points. DPA Title VII incorporates Canada into the US “defense industrial base” definition. That could complicate Trump’s efforts to get companies to restrict exports to Canada.
From the 2 articles I’ve read, it seems Trump is trying to go beyond using the Defense Production Act & not only ask for its own orders to be prioritized but also for 3M to stop doing business with other countries?
Is that right @toddntucker @ChadBown? https://www.politico.com/news/2020/04/03/3m-warns-of-white-house-order-to-stop-exporting-masks-to-canada-163060 …
And, unlike normal health or environmental regulation, agencies do not have to comply with normal regulatory review under the Administrative Procedure Act.
Aaaand… the CARES Act eliminated Congress’ ability to check loan and other disbursements above a certain dollar amount.
So a lot of info we might normally have access to with regs we won’t have. Which puts a lot of stress on the stimulus-specific oversight mechanisms.
(Adapted from this thread.)
