What Is The ‘Defense Production Act’ That Trump Just Invoked To Combat COVID-19?

During his press conference on Wednesday, President Trump announced that he will be invoking the “Defense Production Act” to combat COVID-19, a pandemic that has crippled the American economy and ground social interaction to a standstill.

So what is the “Defense Production Act” and what exact powers will it grant the president while combatting this disease? Enacted in 1950 in response to the Korean War, the act has been invoked as many as 50 times over the past 60 years+ since its creation. Essentially, the act will not only help streamline the production of medical supplies during the pandemic but will also require businesses to sign contracts or fulfill orders pertaining to national defense. Here are the three main sections of the Defense Production Act as outlined by Fox News:

• Companies are required to accept and prioritize contracts from the government and to prioritize “materials, services, and facilities to promote the national defense or to maximize domestic energy supplies.” While this provision has historically been used to ramp up military production, in the midst of the COVID19 pandemic the act will be used for medical supplies.

• The second provision in the act provides financial measures, such as loans, loan guarantees, purchases, and purchase commitments, to speed up the production of materials “needed to support national defense and homeland security procurement requirements.”
• The act also addresses voluntary agreements – or what the government says is “an association of private interests, approved by the Government to plan and coordinate actions in support of the national defense.” The proviso permits business competitors to work together to plan and coordinate measures to increase the supply of materials.
• Along with the three main provisions, the act also provides the government with the authority to obtain information from businesses, authorizes establishment of the National Defense Executive Reserve, and a Committee on Foreign Investment in the United States – which works on the effects on national security of certain mergers, acquisitions, and takeovers related to foreign investment in the U.S.

Though President Trump did not outline the specifics of his invocation of the act, he referred to himself as a “wartime president.” 

On top of the “Defense Production Act,” the White House has also proposed a stimulus plan to give Americans $1,000 checks during the COVID-19 crisis.

“White House officials are working with congressional Republicans on an emergency stimulus package that could send two $1,000 checks to many Americans and also devote $300 billion towards helping small businesses avoid mass layoffs, according to two senior administration officials,” The Washington Post reported Wednesday. “No final decisions have been made and talks with Republican leaders remain fluid, but the growing scale of the $1 trillion rescue plan is coming into sharper focus.” 

In a tweet on Wednesday, the president assured Americans that “money will soon be coming to you.”

“For the people that are now out of work because of the important and necessary containment policies, for instance the shutting down of hotels, bars and restaurants, money will soon be coming to you,” Trump tweeted. “The onslaught of the Chinese Virus is not your fault! Will be stronger than ever!”