INTRODUCING THE DAVIS-BACON REPEAL ACT -- HON. RON PAUL (Extensions of Remarks - February 11, 1999)

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HON. RON PAUL OF TEXAS IN THE HOUSE OF REPRESENTATIVES THURSDAY, FEBRUARY 11, 1999

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!