Progressive Preemption: How the Defense Production Act Can Override Corporate Extraction, Boost Worker Power, and Expedite the Clean Energy Transition

With the 2022 passage of major industrial policy laws like the Inflation Reduction Act (IRA), the policy conversation has shifted to the laws’ implementation. Among the chief concerns being aired from across the political spectrum: how to execute projects as quickly as possible. While many observers have focused on perceived obstacles posed by environmental regulations and community consultations, these are but a few of the hurdles facing equitable economic development. Often left out of the conversation are the ways that corporate extractive and anti-worker practices by project developers make for slower, inefficient, and less equitable outcomes.

In a new issue brief, Joel Dodge, Joel Michaels, Lenore Palladino, and Todd N. Tucker examine a policy tool with underappreciated potential for resolving these hold-ups: the Defense Production Act (DPA). The authors conduct a legal analysis of a rarely noticed element of the DPA Title III’s authorities that could allow industrial policy projects under the IRA and beyond to be carried out “without regard to the limitations of existing law.” This provision would appear to preempt contrary federal, state, and local law, and could limit the ability of private firms that benefit from DPA projects to engage in extractive stock buybacks, foot-dragging on decarbonization, or abusive treatment of workers.