[Congressional Record Volume 141, Number 152 (Wednesday, September 27, 1995)]
[House]
[Page H9569]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     REPEAL OF THE DAVIS-BACON ACT

  The SPEAKER pro tempore (Mr. Hobson). Under a previous order of the 
House, the gentleman from Arizona [Mr. Salmon] is recognized for 5 
minutes.
  Mr. SALMON. Mr. Speaker, I rise tonight in strong support of the 
repeal of the Davis-Bacon Act. Davis-Bacon is over 60 years old, but 
has already lived out its usefulness by that long in dog years.
  This act is an example of the command and control economics practiced 
by the failed Soviet state. Instead of the free market determining the 
wages of workers employed by Federal construction contractors, we have 
a handful of bureaucrats in the Labor Department right here in 
Washington deciding how much their fair pay should be.
  That's right, the same Government that spent the American taxpayer's 
money to study the effects of cow flatulence on the ozone layer has 
decided to give electricians in Philadelphia a raise from the $15.76 
market average to $37.97 per hour just for working on a Federal 
building.
  I would love for somebody to show me how the federally determined 
prevailing wage can be over twice as high as the city-wide average.
  From its creation in 1931, Davis-Bacon has been used to freeze lower-
wage, nonunion workers out of Federal construction projects. That was 
its purpose then, and that is what is does now. By equating the 
prevailing wage with higher wages, the Department of Labor is still 
protecting unions from being undercut by their less costly nonunion 
competitors who are paying wages determined by the free market.
  That is why small business organizations like the NFIB and the U.S. 
Chamber of Commerce so strongly support the repeal of Davis-Bacon. By 
requiring firms to pay their employees the higher wage, small 
businesses are virtually frozen out of every phase of virtually every 
Davis-Bacon contract. We should be committed to expanding opportunities 
for small businesses, not continuing unsound policies that limit their 
participation in Government contracts.
  Davis-Bacon is also costly to the American people. The act has cost 
taxpayers billions of dollars over the years as the taxpayer has been 
forced to pay too much for construction work that could and should have 
been done for less. The CBO estimates that the act costs at least $1.5 
billion per year. For this reason, the GAO has been arguing for its 
repeal since 1979. In these tough budgetary times, not repealing this 
act is simply irresponsible.
  This act also costs our States and localities in terms of added 
paperwork. Dallas TX, estimates that their officials spend 4,000 hours 
just to comply with the mandates of the act. That is 167 days, or 
almost 6 entire months! This is just time spent on compliance, not even 
the actual building Davis-Bacon projects--unless you consider the 
towers of paperwork a construction contract.
  It has also been estimated that Davis-Bacon adds 10 percent to the 
cost of inner-city construction nationwide. This is the equivalent of 
adding a full percentage point on an 8 percent, 30-year mortgage. How 
do you think our constituents would feel if they woke up paying another 
full percentage point on their home loans. Well, if you don't think 
they would like it, you had better not tell them about the Davis-Bacon 
Act.
  This act is a bureaucratic nightmare, it inflates costs for States, 
localities and for the American people, and it freezes small business 
out of Federal construction contracts. It does not ensure higher 
quality, or faster work for all the extra cost, it just protects 
higher-paying union shops from getting undercut by their more efficient 
nonunion competitors. It is counter-intuitive and antifree market. It 
is an idea whose time may never really have come, but clearly has gone.
  If we had a chance to put this law on the books today, I don't think 
that we would take it. We will soon have an opportunity to repeal the 
Davis-Bacon Act. Let's reaffirm our commitment to the free market, to 
open and fair competition, and most of all, to the American taxpayer. I 
urge my colleagues to join me in supporting the repeal of the Davis-
Bacon Act.

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