Mission Critical: Restoring National Security as the Focus of Defense Production... (EventID=116950)

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Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinanci... Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Tuesday, March 12, 2024, at 10:00 a.m. (ET) Subcommittee on National Security, Illicit Finance, and International Financial Institutions Chair Congressman Luetkemeyer and Ranking Member Congresswoman Beatty will host a hearing entitled, “Mission Critical: Restoring National Security as the Focus of Defense Production Act Reauthorization." ___________________________________ Witnesses for this one-panel hearing will be: • Mr. Luke Nicastro, Analyst in U.S. Defense Policy, Congressional Research Service • Dr. Jeffrey (Jeb) Nadaner, Former Assistant Secretary of Defense for Industrial Policy, Senior Vice President of Government Affairs, Govini • Mr. Roger Zakheim, Washington Director, Ronald Reagan Presidential Foundation and Institute • Dr. Todd Tucker, Director for Industrial Policy and Trade, Roosevelt Institute ___________________________________ Background This hearing will review the Defense Production Act of 1950 (DPA) since its enactment, recent DPA uses, the DPA’s effect on the Defense Industrial Base, and issues to consider in anticipation of its reauthorization in 2025. The DPA provides a broad set of authorities to mobilize U.S. domestic industry to respond to national defense needs. Congress provided this authority with the understanding that, “the security of the United States is dependent on the ability of the domestic industrial base to supply materials and services for the national defense and to prepare for and respond to military conflicts, natural or man-caused disasters, or acts of terrorism within the United States.” Through the DPA, the President can, among other things, prioritize government contracts for goods and services over competing customers (Title I) and offer incentives within the domestic market to enhance the production and supply of critical materials and technologies when necessary for national defense (Title III). DPA authorities have been increasingly deployed, including $1 billion in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, $746 million of the FY2022 Additional Ukraine Supplemental Appropriations, and $500 million in the Inflation Reduction Act. Title I: Priorities and Allocations Authority A primary tool of DPA is the Defense Priorities and Allocations System (DPAS), administered by the Department of Commerce. The DPAS allows the federal government to prioritize contracts that meet the country’s national security needs. The Department of Defense (DOD) places DPAS priority ratings on approximately 300,000 rated orders annually. Other departments and agencies also use DPAS authority, though less frequently, for a variety of purposes, including pandemic response, terrorism prevention, natural disaster preparedness, and energy. Title I also contains provisions relating to domestic energy production. These provisions authorize the President to allocate and prioritize contracts that secure materials, equipment, and services that maximize domestic energy supplies. These are typically supplies that are “scarce, critical, and essential to maintain or further (i) exploration, production, refining, transportation, or (ii) the conservation of energy supplies, or (iii) for the construction and maintenance of energy facilities” and that the procurement “cannot reasonably be accomplished without exercising” the DPA authority. Title III: Financial Incentives Title III of the DPA allows the President to provide incentives including loans/loan guarantees, purchases/purchase commitments, and grants/subsidies to ensure domestic industrial base has the ability to produce, or capacity to produce, essential materials and goods necessary to secure national defense. Under Title III authorities, the President may provide financial incentives to develop, maintain, modernize, restore, and expand the production capacity of domestic sources for critical components, critical technology items, materials, and industrial resources. Title III of the DPA also establishes an account at the Department of the Treasury (Treasury), the Defense Production Act Fund, which is available to carry out all of the provisions and purposes of Title III. The DPA Fund is also used to collect the proceeds from DPA activities under Title III, such as the resale of DPA-procured commodities or products. Title VII: Clarifications and Additional Authorities Title VII of the DPA contains provisions that clarify how DPA authorities can and should be used and provides additional authorities. For example, Title VII establishes the Committee on Foreign Investment in the United States... ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=411251