CONGRESSIONAL RECORD: Feb. 11, 1999
INTRODUCING THE DAVIS-BACON REPEAL ACT
------------
HON. RON PAUL
OF TEXAS
[Page: E210]
Mr. PAUL. Mr. Speaker, I rise today to
introduce the Davis-Bacon Repeal Act of 1999. The Davis-Bacon Act of
1931 forces contractors on all federally-funded contraction projects to
pay the `local prevailing
wage,' defined as `the
wage paid to the majority of the laborers or mechanics in the
classification on similar projects in the area.' In practice, this
usually means the wages paid by unionized contractors. For more than
sixty years, this congressionally-created monstrosity has penalized
taxpayers and the most efficient companies while crushing the dreams of
the most willing workers. Mr. Speaker, Congress must act now to repeal
this 61-year-old relic of an era during which people actually believed
Congress could legislate prosperity. Americans pay a huge price in lost
jobs, lost opportunities and tax-boosting cost overruns on federal
construction projects every day Congress allows Davis-Bacon to remain on
the books.
Davis-Bacon artificially inflates construction costs through a series
of costly work rules and requirements. For instance, under Davis-Bacon,
workers who perform a variety of tasks must be paid at the highest
applicable skilled journeyman rate. Thus, a general laborer who hammers
a nail must now be classified as a `carpenter,' and paid as much as
three times the company's regular rate. As a result of this, unskilled
workers can be employed only if the company can afford to pay the
government-determined `prevailing wages' and training can be
provided only through a highly regulated apprenticeship program. Some
experts have estimated the costs of complying with the paperwork imposed
on contractors by Davis-Bacon regulations at nearly $200
million a year. Of course, this doesn't measure the costs in lost
job opportunities because firms could not afford to hire an
inexperienced worker.
Most small construction firms cannot afford to operate under
Davis-Bacon's rigid job classifications or hire the staff of lawyers and
accountants needed to fill out the extensive paperwork required to bid
on a federal contract. Therefore, Davis-Bacon prevents small firms from
bidding on federal construction projects, which, unfortunately,
constitute 20 percent of all construction projects in the United States.
Because most minority-owned construction firms are small companies,
Davis-Bacon keeps minority-owned firms from competing for federal
construction contracts. The resulting disparities in employment create a
demand for affirmative action, another ill-suited and ill-advised big
government program.
The racist effects of Davis-Bacon are no mere coincidence. In fact,
many original supporters of Davis-Bacon, such as Representative Clayton
Allgood, bragged about supporting Davis-Bacon as a means of keeping
`cheap colored labor' out of the construction industry.
In addition to opening up new opportunities in the construction
industry for smaller construction firms and their employees, repeal of
Davis-Bacon would also return common sense and sound budgeting to
federal contracting which is now rife with political favoritism and
cronyism. An audit conducted earlier this year by the Labor Department's
Office of the Inspector General found that inaccurate data were
frequently used in Davis-Bacon wage determination. Although the
Inspector General's report found no evidence of deliberate fraud, it did
uncover material errors in five states' wage determinations, causing
wages or fringe benefits for certain crafts to be overstated by as much
as $1.08 per hour!
The most compelling reason to repeal Davis-Bacon is to benefit to the
American taxpayer. The Davis-Bacon Act drives up the cost of federal
construction costs by as much as 50 percent. In fact, the Congressional
Budget Office has reported that repealing Davis-Bacon would save the
American taxpayer almost three billion dollars in four years!
Mr. Speaker, it is time to finally end this patently unfair, wildly
inefficient and grossly discriminatory system of bidding on federal
construction contracts. Repealing the Davis-Bacon Act will save
taxpayers billions of dollars on federal construction costs, return
common sense and sound budgeting to federal contracting, and open up
opportunities in the construction industry to those independent
contractors, and their employees, who currently cannot bid on federal
projects because they cannot afford the paperwork requirements imposed
by this act. I, therefore, urge all my colleagues to join me in
supporting the Davis-Bacon Repeal Act of 1999.