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Biden Invokes Emergency Powers to Try to Ease Formula Shortage

May 18, 2022, 11:36 PM

President Joe Biden invoked emergency powers under the Defense Production Act to try and boost production of baby formula, while ordering the use of government planes for imports to alleviate shortages.

The White House said in a statement that the move would allow domestic manufacturers to obtain needed ingredients and speed shipments of foreign stocks. The president also announced “Operation Fly Formula” to ship in supplies from other countries.

“I know parents all across the country are worried about finding enough infant formula to feed their babies. As a parent and as a grandparent, I know just how stressful that is,” Biden said in a video posted to Twitter. He said he was invoked the DPA “to ensure that manufacturers have the necessary ingredients to make safe, healthy infant formula here at home.”

The national baby formula shortage has emerged as the latest crisis for the White House, which is struggling to ease supply-chain bottlenecks and inflation sparked by pandemic distortions to the global economy. Biden is under pressure from both Republicans and Democrats in Congress to act quickly to ease the formula shortage, which has been months in the making and could soon ease as production restarts at a key plant.

In a letter, Biden directed Health and Human Services Secretary Xavier Becerra and Agriculture Secretary Tom Vilsack to “take all appropriate measures available to get additional safe formula into the country immediately.” That would include finding ways to accelerate importation of formula as well as identify aircraft contracted with the government to fly it to the US.

Becerra tested positive for Covid-19 during a trip to Germany on Wednesday.

The Food and Drug Administration announced earlier this week that it would ease import rules to try and bolster supply quickly -- a move that opens the door for military flights.

It wasn’t immediately clear how quickly flights would begin, how many would take place or what types and quantities of formula they would ship; the administration said that using the Department of Defense’s commercial planes would be faster than normal shipping routes.

The DPA is a wartime powers law that has several provisions, generally allowing the government to force companies to prioritize certain orders. It has long been used regularly, including in relation to coronavirus vaccine production.

However, the powers come with a risk. They can cause new wrinkles in other parts of the supply chain by displacing materials and upending preexisting arrangements. The administration has for days deflected questions about whether it would be necessary to invoke the DPA, saying only that all options were under consideration.

Biden’s announcement comes amid scrutiny over Abbott Laboratories -- the producer whose recall and factory shutdown spurred much of the shortage. Health officials and the company reached a deal this week to allow them to start making formula again.

Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, announced Wednesday an investigation into the company, saying it had spent billions buying back stock rather than on capital expenditure. An Abbott spokesperson said the buybacks didn’t affect the Michigan plant in question.

To contact the reporters on this story:
Jordan Fabian in Washington at jfabian6@bloomberg.net;
Josh Wingrove in Washington at jwingrove4@bloomberg.net

To contact the editors responsible for this story:
Alex Wayne at awayne3@bloomberg.net

John Harney, Josh Wingrove

© 2022 Bloomberg L.P. All rights reserved. Used with permission.