Asserting breathtaking presidential powers over key sectors of the economy, including during peacetime.
The Obama administration issued a new executive order last Friday entitled "National Defense Resources Preparedness." The Executive Order cited the powers granted to the president by the Defense Production Act of 1950, as amended, and the president's constitutional authority as commander-in-chief as the basis for asserting more breathtaking presidential powers over key sectors of the U.S. economy, not only during wars and national emergencies, but also during peacetime.
The new executive order gives the president and his executive branch agency heads far more power than was contemplated by Congress in the Defense Production Act ("Act").
At least, the definition of "national defense" in both the Act and executive order are the same:
programs for military and energy production or construction, military or critical infrastructure assistance to any foreign nation, homeland security, stockpiling, space, and any directly related activity. Such term includes emergency preparedness activities conducted pursuant to title VI of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5195 et seq., and critical infrastructure protection and restoration.
The difference lies in how much discretion the president has to intervene in and control major portions of the economy if he or his delegated agency heads believe it is appropriate to do so to promote the national defense.
The Act authorizes the president to prioritize contract performance and to "allocate materials, services, and facilities in such manner, upon such conditions, and to such extent as he shall deem necessary or appropriate to promote the national defense." The executive order follows this statutory grant as far as it goes, but then goes much further, particularly with respect to the energy industry.
Part II of Obama's executive order ("Priorities and Allocations") delegates to a broad array of executive agency heads the president's authority over contract prioritization and allocation of materials, services and facilities across all major segments of the private sector economy, including agriculture, "all forms of energy," "health resources," "all forms of civil transportation," "water resources," and a catch-all for "all other materials, services, and facilities, including construction materials."
The executive order delegates to the agency heads, with policy and oversight responsibilities affecting all these different industries, the authority to "issue regulations to prioritize and allocate resources and establish standards and procedures by which the authority shall be used to promote the national defense, under both emergency and non-emergency conditions." Their authority is be exercised to support programs deemed by the secretary of defense, secretary of energy or secretary of homeland security to be necessary or appropriate to promote the national defense.
The Defense Production Act does not purport to affect so many industries. For example, nowhere are "health resources" even mentioned, much less defined, in the Act, as it is in the executive order.
The executive order is particularly over-reaching concerning the energy industry sector. When setting forth the president's powers with respect to "the allocation of, or the priority performance under contracts or orders...relating to, materials, equipment, and services in order to maximize domestic energy supplies," the Defense Production Act places strict conditions on the exercise of such powers.
Specifically, the Act states that the statutory authority to exercise such presidential powers:
may not be used to require priority performance of contracts or orders, or to control the distribution of any supplies of materials, services, and facilities in the marketplace, unless the President finds that—
(A) such materials, services, and facilities are scarce, critical, and essential—
(i) to maintain or expand exploration, production, refining, transportation;
(ii) to conserve energy supplies; or
(iii) to construct or maintain energy facilities; and
(B) maintenance or expansion of exploration, production, refining, transportation, or conservation of energy supplies or the construction and maintenance of energy facilities cannot reasonably be accomplished without exercising the authority specified in paragraph (1) of this subsection.
The Obama administration's executive order skips right over the special statutory limitations on its executive authority to intervene in the energy industry sector. Instead, the Obama administration gives itself the direct authority to centrally manage the entire energy industry, encompassing fossil fuels and all forms of alternative energy, whenever and however it deems "necessary" or "appropriate" to promote the national defense.
In short, with its executive order in hand, the anti-fossil fuel Obama administration will have unfettered powers to manage "all forms of energy," including its "production, conservation, use, control, and distribution." Energy Secretary Steven Chu will be able to direct the allocation of private resources to the Obama administration's green energy projects and clamp down further on fossil fuel production without having to worry about Congress getting in the way.
Chu can decide, for example, that the current level of carbon fuel production and usage in this country is creating a risk of global climate change, resulting severe storm damage that could conceivably imperil our national defense. He has the authority to make such a determination and issue regulations on his own initiative under the executive order. Forget about the Environmental Protection Agency. The Obama administration has found a better shortcut to impose cap and trade type restrictions through "allocation" of "energy resources" so long as the Energy Secretary determines in writing that it is an "appropriate" means to "promote "national defense" (which, don't forget, includes "energy production" as part of its definition).
The executive order grants to the president's executive branch agency heads the authority to manage much of the rest of the economy as well, if deemed "appropriate" to "promote" national defense under programs approved by the secretary of defense, secretary of energy or secretary of homeland security. This includes health care (or, as the executive order refers to it, "health resources"). The term "health resources," by the way, means "drugs, biological products, medical devices, materials, facilities, health supplies, services and equipment required to diagnose, mitigate or prevent the impairment of, improve, treat, cure, or restore the physical or mental health conditions of the population."
Thus, Secretary of Health and Human Services Kathleen Sebelius will have even more power than Obamacare provides her to prioritize and allocate all the nation's "health resources" as she sees fit, including under "non-emergency conditions," as long as it can be justified as "appropriate" to "promote" the broadly defined "national defense."
In addition to citing the Defense Production Act, the Obama administration also bases its far-reaching grab for power over the American economy on the president's constitutional powers as commander-in-chief. The problem for Obama is that another Democratic president, Harry Truman, tried such an assertion of power during wartime and was slapped down by the Supreme Court. In a 1952 case, Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) - decided two years after the original Defense Production Act and while the Korean War was still underway - the Supreme Court held that the president did not have inherent constitutional powers to direct the secretary of commerce to take possession of and operate most of the nation's steel mills. "The order cannot properly be sustained as an exercise of the President's military power as Commander in Chief of the Armed Forces," the Supreme Court concluded.
President Obama has once again grossly overstepped the bounds of his authority. While not yet posing a threat of all-out martial law, as some have suggested, Obama's latest executive order represents another blatant move of his toward centralized government control of the American economy.
Freedom Center pamphlets now available on Kindle: Click here.