For the second year in a row, and just as the fiscal 2024 National Defense Authorization Act process peaks in Congress, the Biden administration’s Defense Department seeks executive branch authority to spend U.S. taxpayer Defense Production Act money with foreign suppliers, in addition to American ones.
Last year, Congress rejected the proposal, and it would be wise to do so again.
For medical equipment, automotive chips and everything in between, the COVID-19 pandemic and resultant national emergency exposed U.S. reliance on weak or nonexistent supply chain policies. These prioritized globalization and eliminating the cost of maintaining critical national stockpiles. Common sense now dictates a different national security supply chain approach.
Reliance on foreign suppliers, friend or not, creates unacceptable risk in national emergencies. The DoD should not seek to expose the nation to foreign threats, and should seek to adhere to the national security intents spelled out in the Defense Production Act.
The DPA, now 73 years old, gives the president broad powers to command the U.S. industrial base and supply chains during times of war, during a domestic crisis and in any emergency environment. The DPA has pulled our feet from the fire many times during modern history, most notably during wartime and the recent pandemic. DPA authorities provided millions of vaccines, ventilators and masks to combat the spread of disease. The DPA is currently enabling the expansion of domestic capacity for materiel in support of Ukraine.
Simply put, the DPA is the most powerful tool available to the DoD and the president for the development of any and all needed domestic industrial capabilities. At its core, the intent of the DPA is about American dollars being spent with American companies to strengthen American supply chains. It is as simple as that.
The Biden administration’s Defense Department has proposed, again, to spend DPA money on projects in foreign countries, the U.K. and Australia in particular. This proposal weakens U.S. supply chains, encourages the use of DPA money in pursuit of other foreign policy aims, and discourages the reshoring of critically needed capabilities after decades of reliance on free markets, globalization and our misguided emphasis on the bottom line.
You’d have thought we had learned our lesson by now. Apparently not.
Why is this proposal a miss? Because it encourages foreign workarounds of U.S. supply problems that, in the end, do little or nothing to solve our underlying industrial gaps. Take, for example, the supply chain issue surrounding rare Earth elements — materials needed in most of our heavy industries and electronics. The Biden “fix” to the DPA would have us spend American taxpayer dollars to have foreign allies mine and process critical materials that could be mined and processed here but for our own unwieldly bureaucracy.
That approach completely buries our underlying domestic problem without providing a solution. Support for our overseas partners is better addressed through other authorities and offices within the federal government, leaving DPA to remain focused on allocating resources strengthening our domestic industry only.
Even alternate authorities for foreign spending should be used cautiously and toward a view of ensuring that our friends and allies maintain a joint and reciprocal approach to funding. Any U.S. government funding spent abroad should be accompanied by requirements for foreign governments to match funds, benefiting all interests. Uncle Sam is not an ATM for foreign industries.
To be sure, workarounds partnering with critical foreign sources need to exist but must come with commonsense business restrictions and oversight. Strings should include mandating Committee on Foreign Investment in the United States approval of shifts in U.S. ownership or control, especially when involving countries of concern and, perhaps, requiring their participation in the Defense Priorities and Allocations System
Permitting blank-check approval of foreign supply chain spending under the DPA is just a bad, lazy and ill-conceived legislative proposal. It will result in neither a secure critical U.S. supply chain, nor desperately needed new and renewed domestic capabilities. Congress should decisively reject the proposal, as it has in the past.
Dean Popps is a lawyer who served as the acting assistant secretary of the U.S. Army for acquisition, logistics and technology, and as the service’s acquisition executive.