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Biden Just Invoked the Defense Production Act of 1950. What Does That Really Mean?

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  • President Joe Biden hosted the inaugural meeting of the Council on Supply Chain Resilience on Monday.
  • Biden announced a new series of actions to strengthen U.S. supply chains.
  • The Biden administration is invoking the Defense Production Act as a means to ease drug shortages and lower drug prices.

 

defense production act - Biden Just Invoked the Defense Production Act of 1950. What Does That Really Mean?

On Monday, President Joe Biden invoked the Defense Production Act of 1950 (DPA) to boost investment in U.S. medical manufacturing. Indeed, Biden’s turn to the Cold War-era legislation is intended to strengthen supply chains that he considers crucial for national security. The move is also targeting lower prices across a number of product classes.

According to a White House statement, Biden will use the Defense Production Act as a means to lower domestic medicine costs. The statement also points to several potential courses of action discussed at the inaugural meeting of the newly formed Council on Supply Chain Resilience, which met yesterday.

“As part of his Bidenomics agenda to lower costs for American families, President Biden is announcing nearly 30 new actions to strengthen supply chains critical to America’s economic and national security,” said the White House.

The White House also highlighted the administration’s success so far in lowering inflation and smoothing out supply chains disrupted during the Covid-19 pandemic.

“From October 2021 to October 2023, supply chain pressures as measured by the New York Fed declined from near-record highs to a record low, helping lower inflation, which has fallen by 65% from its peak.”

Biden Attacks Drug Shortages Via Defense Production Act

As part of yesterday’s missive, the White House highlighted a number of potential actions and goals of Biden’s new agenda.

This includes the issuance of a Presidential Determination intended to expand the authorities of the Department of Health and Human Services’ (HHS) under Title III of the DPA. The change will apparently result in advancements in the scope and funding of domestic medicine production and supply chains.

The DPA was last invoked in 2021 as a means to expand access to Covid-19 protective equipment, like ventilators and masks.

Additionally, in its statement, the White House highlighted the creation of a number of “cross-government partnerships” intended to improve supply-chain data-sharing. This includes the creation of a “first-of-its-kind” Supply Chain Center as part of the Department of Commerce.

As a whole, it’s clear that Biden is attempting to enhance the price-reduction efforts of the Federal Reserve. Reasonably so, despite the strength of the economy on paper, many polled voters are still dissatisfied with the state of the economy — namely, the elevated price of goods.

“When supply chains are smooth, prices fall for goods, food, and equipment, putting more money in the pockets of American families, workers, farmers, and entrepreneurs,” the White House stated.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/biden-just-invoked-the-defense-production-act-of-1950-what-does-that-really-mean/.

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