[Congressional Record Volume 141, Number 153 (Thursday, September 28, 1995)]
[House]
[Page H9647]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 SUPPORT REPEAL OF THE DAVIS-BACON ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from North Carolina [Mr. Ballenger] is recognized for 5 
minutes.
  Mr. BALLENGER. Mr. Speaker, Congress is under increasing pressure to 
balance the budget. The taxpayers are demanding that Government be more 
efficient and held accountable for the expenditure of their hard-earned 
tax dollars. The Davis-Bacon Act is the perfect example of a law that 
is expensive, unnecessary, and difficult to administer. The act must be 
considered in light of its economic effects as well as its objectives.
  The Davis-Bacon Act has long since outlived any usefulness it may 
have had. The rationale for special wage protection was never very 
persuasive but the act remains law, adding millions and millions of 
dollars to Federal construction costs.
  Davis-Bacon was enacted to discourage non-local contractors from 
securing Federal construction jobs by hiring cheap labor from outside 
of the project area. Proponents of the legislation complained that this 
practice was disruptive to the local wage structure. When the act was 
passed 64 years ago, there was no Federal minimum wage or other labor 
laws with protections for workers. Since that time, Congress has 
enacted numerous laws to protect the wages and working conditions of 
all workers, including construction workers.
  The taxpayers are the real losers under the Davis-Bacon Act. Some $48 
billion of construction spending annually falls under the Act's 
coverage. In effect, Davis-Bacon is a tax on construction. For example 
in Baltimore, the Davis-Bacon requirements add between 5 and 10 percent 
to the costs of inner city housing. Davis-Bacon effectively wipes out 
much of the good that banks do when they provide lower interest rate 
loans to such projects.
  Clearly, Davis-Bacon drives up construction costs. Electricians in 
Philadelphia who are working on a Davis-Bacon project are paid about 
$37 an hour compared with electricians on a private contract who are 
paid an average of $15.76 an hour. Companies can not stay in business 
paying $15 to an employee who is worth $6. If companies have to pay $15 
per hour, they are going to hire skilled workers, thus effectively 
shutting out those who need the opportunity to acquire job skills and 
work experience.
  The total cost of Davis-Bacon extends to State and local government 
construction programs, this having the same practical implications as 
an unfunded mandate. Davis-Bacon is particularly burdensome in the area 
of school construction, by restricting the ability of school districts 
to reduce construction costs. For example, the cost to build two 
schools and an academic center in Preston County, WV, could have been 
reduced by one-third or $1.9 million dollars, had the projects been 
exempt from Davis-Bacon. The savings could have been realized for the 
taxpayers or used in other ways through the educational system.
  There are additional costs to Federal agencies, which must collect, 
process, and disseminate thousands of wage rates. Likewise, there are 
direct costs to contractors who must comply with the recordkeeping and 
paperwork requirements under the Copeland Act. Compliance costs to the 
industry total nearly $100 million per year, money which could be 
better spent creating additional jobs.
  Recently, an investigative report was released which detailed fraud 
in the survey process used by the Department of Labor to determine 
prevailing wages in certain areas in Oklahoma. The report uncovered 
numerous instances of interested parties claiming phantom projects and 
ghost employees, all with the intent of inflating the official wage 
rates issued by the Department of Labor. In some cases, employees were 
allegedly paid $5 to $10 an hour more than actual market wages in the 
area. After repeated demands by local authorities and the involvement 
of members of the Economic and Educational Opportunities Committee, the 
Department of Labor revoked the wage determinations in Oklahoma City 
and Tulsa because of the allegations of fraudulent data. Scandals of 
this nature erode public confidence in the Government procurement 
process.
  Repeal of the Davis-Bacon Act would have the taxpayers $2.7 billion 
over 5 years. It would allow the Federal Government to get more 
construction for the money, or to get the planned construction done for 
less money. Over 4,000 petitions were sent to Congress from taxpayers 
across the country supporting repeal of the Davis-Bacon Act. Last 
November, the voters sent a message to Washington. They want to end 
Government that is too big, costly, and intrusive. I urge my colleagues 
to support repeal of the Davis-Bacon Act.

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