Luetkemeyer Delivers Remarks at Hearing to Restore National Security as the Focus of Defense Production Act Reauthorization
Washington,
March 12, 2024 -
Today, the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions, led by Chairman Blaine Luetkemeyer (MO-03), is holding a hearing entitled “Mission Critical: Restoring National Security as the Focus of Defense Production Act Reauthorization.”
Watch Chairman Luetkemeyer’s opening remarks here.
Read Chairman Luetkemeyer’s opening remarks as prepared for delivery:
“In response to the outbreak of the Korean War in 1950, my fellow Missourian President Harry Truman signed a law intended to ensure that our nation would have sufficient industrial resources to meet our national security needs.
“Among the key authorities that the Defense Production Act, or DPA, gave the President was the authority to prioritize the production and delivery of items critical to our national security.
“It also provided a series of financial tools to incentivize the creation or growth of our domestic capacity to manufacture those items, particularly those that otherwise might not be made in the United States.
“And it now forms the basis for the Committee on Foreign Investment in the United States, CFIUS, to ensure that foreign adversaries aren’t able to use the fruits of our free market innovation against the United States.
“For almost three quarters of a century, the DPA smoothly and quietly functioned, with annual appropriations for industrial incentives generally in the range of $50 million—modest by DOD standards.
“This Committee checked in on DPA from time to time—in recent years, mostly focused on CFIUS.
“The last time this Committee held a general hearing on DPA was more than a decade ago, in May 2013.
“However, I decided to call today’s hearing because over the last few years the federal government has rapidly increased its use of DPA’s financial tools to address a variety of challenges.
“For example, in March 2020, Congress appropriated $1 billion to the DPA account through the Coronavirus Aid, Relief, and Economic Security (CARES) Act ‘to prevent, prepare for, and respond to coronavirus.’
“Then in 2022, Congress appropriated another roughly $1.25 billion to DPA—around $750 million in the Ukraine Supplemental for weapons production, and another $500 million in the Inflation Reduction Act, half for domestic mining and mineral processing and half for clean energy programs.
“Over the last six plus years, the White House also referenced DPA in a series of Executive Orders and other actions, beginning with former President Trump’s prescient 2017 order for the Defense Department to analyze our defense and manufacturing industrial base and assess supply chains for their resilience to potential shocks.
“DOD’s recommendation in its subsequent report to rely on DPA Title III arguably kicked off a DPA revival.
“A few short years later, in 2020, COVID delivered a dramatic shock to our supply chains and then-President Trump, in addition to deploying funds through Title III, invoked DPA Title I so the Department of Health and Human Services could prioritize contracts for health and medical resources such as personal protective equipment.
“HHS also used DPA to prioritize the production of ventilators, which were badly needed and in short supply.
“Upon taking office, President Biden also embraced DPA, beginning with one of his earliest Executive Orders—to strengthen U.S. supply chains’ resilience.
“In May of 2022, President Biden invoked the DPA to require suppliers to provide key inputs to infant formula manufacturers before any other customers.
“A month later, he again leaned on DPA, this time to accelerate domestic production of energy technologies including solar panel parts, insulation, heat pumps, biofuels, and power grid infrastructure.
“Finally, last fall, the Biden Administration deployed DPA twice more, first to foster investment in domestic manufacturing of essential medicines, and, second and more controversially, to compel private companies to provide information to the government about their work in AI.
“The level of support for these various applications of DPA has varied across party lines, and we welcome that debate.
“But I hope we can all agree as a starting point that the United States must have a strong defense industrial base, if only to ensure success in our global competition with China.
“This is the fundamental rationale for the DPA today.
“The DPA has generally been reauthorized in five-year increments, and the current authorization expires at the end of the next fiscal year, in September 2025—about eighteen months from now.
“In previous renewals, Congress stripped out provisions that were no longer relevant and added new provisions to address contemporary challenges.
“In my view, our current situation requires a DPA that, as Job One, deploys its limited resources to ensure that the United States has the industrial capacity to defend our nation against the generational challenge posed by China.
“Today, our panel of witnesses will help the Committee identify appropriate solutions that Congress could implement in the next reauthorization by discussing the history and mechanics of the DPA, how it has been deployed, and how it could be focused, modernized, and improved.”
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