Authored by Alexander Canizares, Paul Korol, Richard Oehler

On March 27, 2020, President Trump issued a third Executive Order (EO) invoking his authority under the Defense Production Act of 1950 (DPA) to respond to the coronavirus (COVID-19) crisis. In this third EO, President Trump has delegated additional powers to the Secretaries of Health and Human Services (HHS) and Department of Homeland Security (DHS) to offer direct loans and loan guarantees to businesses, to prevent hoarding of designated materials, and to incentivize domestic production of certain essential goods.

The EO supplements prior EOs issued on March 18 and 23, respectively, which gave the Secretary of HHS certain powers under the DPA to prioritize and allocate orders for, and outlaw hoarding of, health and medical resources needed to respond to COVID-19.

Among other things, the new EO does the following:

• Delegates authority to the DHS Secretary that matches the authority previously delegated to the HHS Secretary under the March 18 and 23 EOs. The new EO does not override the previous delegation of these powers to the HHS Secretary and results in the two departments having concurrent authority.
• Delegates authority to the HHS and DHS Secretaries to:
  • Offer direct loans and loan guarantees to private businesses “to reduce current or projected shortfalls of industrial resources, critical technology items, or materials essential to the national defense,” and
  • Incentivize domestic production of goods essential to the national defense, including by subsidizing such domestically produced goods, or installing government-owned equipment in privately owned plants to expand production capabilities.

In sum, the new authorities provide the Secretaries of HHS and DHS with multiple means to encourage production of items needed to combat COVID-19.