WASHINGTON -- As hospitals, health care staff and governors clamor for ventilators, intensive care beds and protective gear, President Donald Trump and the U.S. Chamber of Commerce are opposing the one thing many say would do the most good in the fight against the runaway coronavirus pandemic: activate the Defense Production Act to coordinate a warlike effort to ramp up the manufacture and distribution of critical supplies.
More than 100 former national security officials urged Trump in a letter Wednesday to use the act's authority, saying it was necessary that government coordinate the effort and assign priorities to confront the crisis. Trade groups, governors, attorneys general and Democratic senators are lodging similar calls.
While the $2 trillion package of spending and tax breaks to bolster the hobbled U.S. economy would provide about $144 billion to hospitals and other health care providers and $150 billion for state and local governments, the measure does little to address broken supply chains, require manufacturers to coordinate production of equipment and therapeutics in short supply, or ensure that masks and ventilators are distributed to where they're most needed.
A Korean War-era law, the Defense Production Act of 1950 gives the president the power to try to fix all that. Its original aim was making sure the U.S. had the materials to make weapons and fight wars, but Congress expanded it to address other contingencies, such as dangers to public health.
It requires businesses to prioritize or accept contracts to promote the national defense, fight terrorism, and provide assistance after natural disasters and other emergencies. In some circumstances, it permits the U.S. to waive antitrust laws so that competing companies can work together.
It also allows the president to incentivize expanded production through "loans, loan guarantees, direct purchases and purchase commitments, and the authority to procure and install equipment in private industrial facilities," according to a March 2 report from the nonpartisan Congressional Research Service. It's been used to address energy shortages in California in 2001 and to respond to damage caused by Hurricane Maria in Puerto Rico in 2017, the report said.
Trump on March 18 issued an executive order essentially declaring he is prepared to use the law, but has repeatedly refused to act on it. He has suggested that the government is coordinating with companies that have voluntarily offered to manufacture medical equipment and has compared using the act to "nationalizing our business" like Venezuela.
"We're seeing the greatest mobilization in the industrial base since World War II," but on a voluntary basis, Trump said Sunday at the White House. "We're getting what we need without putting the heavy hand of government down."
The White House said in a statement Thursday that the response "has been overwhelming, fulfilling government-identified needs faster than anyone thought possible."
That argument is similar to the U.S. Chamber's. Companies are voluntarily "doing everything that the government is asking for them to do," said the Chamber's chief policy officer, Neil Bradley, in an interview. He confirmed the group had lobbied the White House not to use the Defense Production Act.