What You Need to Know About the Defense Manufacturing Act – The Biden Act of 1950 Used by Biden to Try to End Baby Formula Shortage

US President Joe Biden on May 18, 2022 announced that he was referring The Defense Proceedings Act to help end the baby formula deficiency stressing parents across the country.

He said he would direct suppliers of baby formula ingredients to prioritize deliveries to formula makers and control their distribution if necessary.

You may be wondering what babies without formula have to do with defense industry, which is reminiscent of large warships and weapons systems. While using Defense Proceedings Act forcing companies to produce infant formula would certainly be a new use of the law, hardly the first time the post-war law has been used outside its original purpose of supporting national defense.

In fact, the law is used much more often than you think. But as a business professor who studies strategies for maximizing the efficient allocation of resources, I believe that when presidents refer to the act, it is often more about political theater – showing the public that you are doing something – than dealing with the problem in the most effective way.

Extensive authority

The Defense Proceedings Act was passed in 1950 and is based on the laws on military powers of 1941 and 1942.

The actions of War Powers gave the president broad power to control local production. For example, this helped the United States increase the production of fighter jets from 2,500 a year to over 300,000 by the end of the war.

In the 1950s, America faced a war in Korea, and Congress feared that growing postwar demand for consumer goods would push back the defense production needed to bring China and the Soviet Union, which backed North Korea into the conflict. There were also concerns on inflation during this post-war period.

IN A law on defense production gave the president – who later delegated this power to cabinet officials such as the Minister of Defense – broad powers to force producers to produce goods and provide services in support of national defense, as well as to set wages and prices and even ration consumer goods.

“We can’t get all the military supplies we need now, just expanded production,” said President Harry Truman. told Americans in a radio address after signing the act in law. “This enlargement cannot happen fast enough. Therefore, as far as necessary, workers and factories will have to stop producing some civilian goods and start producing military equipment.

IN the original law focused on “Shaping US military readiness and capabilities”, which limits the scope of the president’s powers.

It is called routinely

Although the Defense Manufacturing Act only makes news when the president dramatically refers to it, the government uses the law – or simply the threat to use it – routinely to force private companies to prioritize public procurement. The Ministry of Defense, e.g. use it to do about 300,000 contracts with private companies annually.

Congress should be re-authorized the law every few years and frequently amends it to extend or limit its scope. over time, this has significantly expanded the definition of national defense should include support for “preparedness, response and recovery from threats, terrorist attacks and other national emergencies”.

The Department of Homeland Security used it about 400 times in 2019, mostly to help prepare for and respond to hurricanes and other natural disasters, such as by providing resources to house and feed survivors. And Presidents Bill Clinton and George W. Bush, for example, they both used it to divert electricity and natural gas for California during the 2000-2001 energy crisis

The law was also widely used during the COVID-19 pandemic. President Donald Trump used it give priority to the allocation of medical resourcesprevent the accumulation of personal protective equipment and require General Motors to build fans. He also ordered facilities for processing beef, pork and poultry to remain open during the blockade to ensure a supply of protein for the American population.

Biden, for his part, has also used the act several times, mainly to fight the pandemic. For example, in March 2021 he called to him to speed up the production of vaccines, ensuring that additional facilities are ready, and to speed up the production of critical materials, equipment, machinery and consumables. In March 2022 he betrayed a directive to increase the supply of high-capacity battery materials, which are mainly used in civilian electric vehicles.

Biden’s use of the Defense Manufacturing Act to address the problem of infant formula illustrates its limitation. It can be used to prioritize ingredients and production capacity, but it is not a magic wand. The president cannot immediately decree a capacity that does not exist. And it is not clear how much it will do to quickly end the shortage of formula – given the main problem is production problems this closed production in a key plant, not just a shortage of ingredients.

The law is widely used and widely useful, but it is not a substitute for advance planning and preparedness.

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