“This has been called for and it means we continue with companies to ensure that we accelerate the production of materials to ensure that we can get 100 million shots into the arms of Americans,” White House press secretary Jen Psaki said last week. said.
The 1950 Act gives the government more control during emergencies to regulate direct industrial production.
The Federal Emergency Management Agency describes the act as “the primary source of presidential authority to expedite and expand the supply of resources from the U.S. industrial base to support military, energy, space and homeland security programs.”
“The authorities can be used across the federal government to shape the domestic industrial base so that it is able to provide essential materials and goods needed for national defense,” the report said.
The law is divided into three main sections:
- Priorities and awards, which allows the president to require companies to accept and prioritize contracts for services and materials deemed necessary to assist U.S. national defense.
- Expansion of productive capacity and supply, which gives the president the authority to create incentives for the industry to produce critical materials.
- General provisions, which generally establishes the government to conclude agreements with the private industry, to stop foreign corporate mergers that threaten national security and to create a voluntary bloc of industry managers who can be called to government service.
Has the DPA been used before?
The DPA’s priority piece is frequently used by the Department of Defense to obtain ‘critical military capabilities’ and by the Department of Homeland Security for disaster response and preparedness. What has not been used since the Cold War is the allocation clause.
What can Biden do with the law?
The authorities that the president has under the DPA are large and diverse.
- Bidding may require companies to ‘prioritize and accept government contracts’. The president can also control the distribution of the way the products get among people who need them. This means that if a company that manufactures syringes was about to send 100 to Italy, the supply chain could be disrupted, for example if Biden decides that the stock should remain in the US. According to the Congressional Research Service, this allocation authority has not been invoked since the 1970s when it was used to promote energy development during the Cold War. But more generally, the Department of Defense and sometimes FEMA use the DPA’s provision for prioritization to ensure that government contracts are prioritized when it comes to protecting national defenses or ensuring the country can respond to natural disasters.
- Another division of the DPA will enable Biden to “provide economic incentives” to ensure the U.S. has the capabilities it needs and the products it needs to handle Covid-19. This could include things like ensuring the US buys excess bottles in the next six months. It can also include giving business loans or loan guarantees.
- The president could also draw up ‘voluntary agreements’ with industries, similar to the agreements between some vaccine makers and manufacturers around the world. The president can also enter into those agreements. And Biden can ‘block proposed or pending foreign corporate mergers or acquisitions’ if it threatens the national security or the production of goods we currently need.
We just do not know which of these Biden would use now. These authorities are used in the context of national security, but it is important to note that although the PTA authorities apply to public health emergencies, before the outbreak of the coronavirus, the DPA does not address a public health crisis. has not been used.
Does Congress have oversight?
Congress does oversee. If the president wants to invoke wage and price control, it must be accompanied by a joint decision of Congress, according to the Congressional Research Service.
Congress must also authorize loans and loan guarantees that cost more than $ 50 million. The Congressional Research Service is clear that Biden needs to let the relevant committees, such as Banking and Finance, know what their plan is and deliver a 30-day period. It is unclear if there are exceptions to an emergency.
It is also unclear – and perhaps untested – if there would be oversight of Congress during a national emergency. But Congress can still play a role here.
Priscilla Alvarez, Sara Murray and Lauren Fox of CNN contributed to this report.