Committee on Education and the Workforce

WASHINGTON - House Workforce Protections Subcommittee Chairman Cass Ballenger (R-NC) today sent a letter to President Clinton urging him to relax Davis-Bacon prevailing wage requirements to facilitate repairs in states hardest hit by Hurricane Floyd.

"The economic effects of this hurricane are significant," Ballenger wrote. "Many businesses have been damaged or destroyed. Thousands of individuals have either lost their livelihoods or can not make it to work because of impassable roads.. Relaxing Davis-Bacon in these hard hit states will lower the cost of rebuilding these communities and will help create job opportunities for those in need of work."

The Davis-Bacon Act, passed in 1931, applies to contractors who work on federal construction projects. It requires contractors to pay certain "prevailing wages" to various classes of laborers and mechanics working under federal contracts. The law allows the President to suspend Davis-Bacon in the event of a "national emergency." President Bush suspended Davis-Bacon in 1992 to help speed up and lower the cost of rebuilding cities ravaged by Hurricanes Andrew and Iniki.

"It may be months or years before some communities hit by Floyd can recover," said House Education and the Workforce Chairman Bill Goodling (R-PA). "Davis-Bacon considerably increases the cost of construction projects. The President should give residents every opportunity to rebuild at the lowest costs possible."

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(Text of Rep. Ballengerïs letter is attached.)

September 30, 1999

The Honorable William Jefferson Clinton
President of the United States of America
The White House
1600 Pennsylvania Avenue, N.W.
102 East Wing
Washington, D.C. 20502

Dear Mr. President:

We are writing to urge you to relax Davis-Bacon prevailing wage requirements to facilitate repairs in states hardest hit by Hurricane Floyd. As you know, Hurricane Floyd has dealt a devastating blow to residents along the eastern seaboard from Florida to North Carolina to New York. The Federal Emergency Management Agency (FEMA) has called this one of the biggest multi-state disasters in U.S. history. Many states believe that clean-up costs from Hurricane Floyd will far exceed the cost of either Hurricane Fran or Hugo.

In North Carolina some 1,000 roads and 40 bridges remain closed, as are sixteen school systems. Thousands remain without electricity and an estimated 30,000 homes were damaged or destroyed by the storm and flooding with 1,600 beyond repair. Agricultural impacts are estimated at more than $1 billion in North Carolina with more than 110,000 hogs and 1,000,000 chickens and turkeys killed by the storms. Water systems in nine counties are contaminated and many wastewater treatment plants are wholly or partly out of operation. FEMA estimates that nearly 7,100 homes are reported to be either destroyed or heavily damaged in South Carolina, Virginia, Pennsylvania, and other states. And while nearly a week has gone by since Floyd's arrival, it is anticipated that even more damage will be uncovered as the flood waters retreat.

As you may recall, President George Bush suspended the Davis-Bacon Act in 1992 to help speed up and lower the cost of rebuilding the communities ravaged by Hurricanes Andrew and Iniki. President Bush took this action pursuant to Section 6 of the Act [40 U.S.C. 276a-5] which allows the President to suspend the Act in the event of a "national emergency."

The economic effects of this hurricane are significant. Many businesses have been damaged or destroyed. Thousands of individuals have either lost their livelihoods or can not make it to work because of impassable roads. It may be months or years before these communities are rebuilt and a record amount of federal assistance will be needed to do so.

Relaxing Davis-Bacon in these hard hit states will lower the cost of rebuilding these communities and will help create job opportunities for those in need of work. Davis-Bacon prevailing wage requirements increase the cost of construction -- forcing taxpayers to pay more and receive less in return. Government estimates, economic studies, and those involved in the construction industry believe that the Davis-Bacon Act inflates the cost of a construction project by an estimated 5 to 38 percent. The Congressional Budget Office estimates that Davis-Bacon adds about $9.6 billion (over 10 years) to the cost of all federal construction projects.

The historic floodwaters of Floyd has resulted in hundreds of millions of dollars in property damage and created a huge swath of human misery that will last for months. We urge you to suspend the application of Davis-Bacon for disaster relief in the areas affected by Hurricane Floyd.

Sincerely,