Oliver McPherson-Smith, Ph.D,
January 11, 2024
Manufacturing a Crisis: The Biden Administration’s Abuse of the Defense Production Act
The Defense Production Act (DPA) is a Korean War-era law that grants the president broad powers to control the civilian economy during periods of national crisis. While previous administrations have used the DPA to protect the Nation from acute threats, such as natural disasters or pandemics, the Biden Administration is abusing these powers to advance its environmental agenda.
The DPA grants the president a broad range of powers to:
- Mandate companies to accept contracts for goods and services that would bolster national defense.
- Offer loans, guarantees, or purchase contracts to expand the industrial base.
- Forge voluntary agreements with private companies or block foreign mergers and acquisitions.
Per section 2 of the DPA, Congress explicitly recognizes that the domestic industrial base must “prepare for and respond to military conflicts, natural or man-caused disasters, or acts of terrorism.” Previous administrations have used the DPA to:
- Procure rail components in the wake of Hurricane Katrina under President Bush.
- Survey the economy for Chinese spyware under President Obama.
- Support the production of ventilators during the COVID-19 pandemic under President Trump.
Despite a bipartisan history of utilizing the DPA only in cases of emergency or immediate threats to human life, in June 2023, the Biden Administration invoked the law to subsidize the production of renewable energy components and electric alternatives, such as heat pumps.
Using the DPA, in November 2023, the Biden Administration announced it would grant $169 million in cost-sharing awards to nine heat pump manufacturing projects. It is expected that further DPA spending will be unveiled in early 2024.
The DPA provides powers to protect American national security and well-being amid a crisis. The Biden Administration’s use of these powers to advance its environmental agenda constitutes an abuse of its authority that wastes public resources and endangers American prosperity.
Instead of enhancing America’s national security, the Biden Administration’s preference for renewables and electrification has put America at risk:
- A phaseout of reliable electricity sources will put most of the U.S. at risk of blackouts.
- According to the Energy Information Administration, electric household heating bills are 76% higher than those who use natural gas.