Congress Must Stop Trump from Exploiting Emergency Powers on Polluters’ Behalf

By Cameron Walkup, Legislative Representative, Earthjustice Action

The Trump administration is using a little known, Cold War-era law to prop up extractive industries, sidestep environmental protections, and seemingly enrich its political allies. The Defense Production Act (also known as the DPA) was first passed in 1950 to provide President Truman with the authority to marshal domestic industrial resources in response to the Korean War. President Trump has blatantly and repeatedly exploited the law to enact some of his most far-fetched economic and energy policy goals, while special places and communities suffer the consequences.  

Congress has a clear opportunity to reign in those abuses. With the DPA currently set to expire this year, Congress must attach real guardrails to any comprehensive reauthorization package so that no President can ever again weaponize its authorities to prop up polluting industries and give handouts to its supporters. 

The History and Powers of the DPA  

The DPA President Truman originally signed into law in 1950 has evolved significantly in the years since. In fact, the DPA has been reauthorized more than 50 times since it was first enacted. Three major authorities remain today: Title I, Title III, and Title VII. 

Title I gives the President the ability to control the distribution of materials in the market and require private companies to prioritize government contracts for goods and services above other contracts. Title III authorizes the President to use grants, loans, purchases, and other financial tools to incentivize production of certain resources. Finally, Title VII provides the President with a host of other authorities including the ability to enter into voluntary agreements with the private sector and to prevent company mergers that could threaten national security. Over time, the President has delegated the authority to use the DPA in specific circumstances to many parts of the executive branch, including the Department of Defense, Federal Emergency Management Administration, and Department of Energy. 

To this day, the law is used hundreds of thousands of times per year to meet legitimate military, emergency response, and public health needs. For example, in 2020, the DPA was invoked in response to the need to acquire more personal protective equipment for health care professionals during the coronavirus pandemic. In 2022, the Biden administration utilized the DPA to increase domestic production of clean energy technologies critical for responding to the rapidly unfolding climate crisis. But this administration has taken the use of the DPA to unprecedented heights.   

Trump’s Radical Expansion of the DPA  

Since taking office, the Trump administration has invoked the DPA multiple times to prop up fossil fuel companies, enrich administration officials and other allies, and supersede state law. Some of the more blatant exploitations of the law have included: 

Taking Equity Stakes in Mining Companies: The Trump administration has used the DPA and other statutes to announce no fewer than ten deals to invest in companies that mine, process, or otherwise produce minerals in exchange for the federal government taking an ownership stake in those companies. The text of the DPA does not explicitly authorize such deals, but that has not stopped this administration from entering into them. More importantly, these agreements could compromise the federal government’s obligations to carefully review permit applications, regulate company activities, and enforce environmental laws, when the federal government has a financial stake in the success of said companies. They also have at least the appearance of corruption and self-dealing, with key political allies and family members, such as Stephen Miller, Karen Budd-Falen, and Donald Trump Jr., all having financial ties to companies that this administration has reached equity stakes deals with. 

Attempting to Undermine State Environmental Protections: In March of this year, DOE issued an order under the DPA directing an oil pipeline on the California coast to resume operations despite previously causing one of the largest oil spills in that state’s history and despite the pipeline not having received all necessary approvals from the state. The DOE order was buffeted by a recent Department of Justice opinion arguing that a DPA order can preempt – or override – state law that would otherwise govern a project. The same reasoning could seemingly be applied to a host of other DPA projects, rendering environmental and community protections enacted by states across the country essentially meaningless with the stroke of a pen. 

Handing out Taxpayer Dollars to Coal Companies: Most recently, President Trump directed DOE to use the DPA to promote coal mining, export, and electricity generation. In response, Secretary Wright announced $500 million in giveaways to 13 coal-fired power plants and a new proposed coal storage and handling facility. These investments won’t lower people’s electric bills or make energy more reliable and abundant, but they will prolong our dependence on an unaffordable, dirty energy source. 

Congress has the Authority to Reign in Abuses of the DPA 

Thankfully, Congress has an opportunity to stand up to the White House and enact real guardrails around this authority. The DPA is currently set to expire at the end of this September, and negotiations are currently underway around what provisions should be included in a reauthorization package. 

Unfortunately, the only publicly released proposal to reauthorize the DPA (the “DPA Modernization Act”) severely misses the mark. While it includes some small sideboards that begin to address this administration’s use of the DPA and rampant corruption, it would also: 

• Authorize the use of the DPA to purchase equity stakes in private companies; 

• Create a new authority for the President to single-handedly waive “relevant regulations” – which could include the Clean Air Act, Clean Water Act, and other laws – that he claims are standing in the way of permitting for projects like mines; and 

• Limit already insufficient oversight mechanisms, such as requirements that the administration inform Congress before making large investments using the DPA. 

As Congress continues to debate reauthorization of this expansive authority, it must consider how this administration has misused the DPA to prop up the fossil fuel and mining industries, undermine critical state policies, and steer financial benefits to its allies. 

Congress should reject any reauthorization bill that would codify this President’s attempts to warp the statutory language of the DPA to authorize equity stake purchases and preempt state law. And it should go further by imposing real, substantive sideboards on future uses of the DPA, including: 

• Directing the administration to engage and consult with Tribes before investing in any projects that impact Tribal Nations, such as mines that would destroy sacred sites; 

• Prohibiting DPA investments in companies in which high-ranking administration officials and their family members are connected to; and 

• Restricting DPA investments only to companies that meet high standards for environmental and social impact. 

The DPA has been one of the Trump administration’s go-to tools for enacting some of their worst policies, and our communities and environment have paid the price. Congress must seize on this moment to reign in this administration’s interpretation of the DPA. With strong guardrails, Congress can ensure that no administration can abuse the DPA again, while ensuring it remains a tool to respond to true emergencies.