[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[House]
[Page H10026]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
REPEAL 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, I hope that my colleagues were able to
see the NBC news story last night featuring Davis-Bacon as part of an
ongoing series on ``The Fleecing of America.'' For those who missed the
story, I am submitting a copy of the transcript for the Record. The
report covered an investigation into the Davis-Bacon prevailing wage
rates for Oklahoma. Survey data listing non-existent projects and ghost
employees was submitted to the Department in an apparent effort to
inflate the wages paid on Federal construction projects. For example, a
Federal wage survey form was submitted to the Department documenting a
construction project in Mustang, OK, which was never built, needed, or
even proposed.
This is just one example of what may well be a systemic problem with
the administration of the Davis-Bacon Act by the Department of Labor.
Sixty-three years of artificially high construction costs are enough.
The Davis-Bacon Act should be buried among other legislative
antiquities. It is the perfect example of an outdated, expensive and
unnecessary law. Whether or not the Davis-Bacon Act was ever really
needed is debatable; but today Davis-Bacon remains law, giving some
construction workers a bonus at the bargaining table at the taxpayer's
expense.
Enacted during the throes of the Depression, the Davis-Bacon Act
required contractors on federally funded construction to pay the
government mandated ``prevailing wage.'' Over the years, the prevailing
wage requirements of the Act have been extended into many other Federal
program, which would not have otherwise been covered by Davis-Bacon.
Some $48 billion annually in federal construction spending falls under
the Davis-Bacon Act requirements. In effect, the Davis-Bacon Act
amounts to a ``tax'' on construction.
The Congressional Budget Office says that the Davis-Bacon Act raises
government construction costs on the order of $1 billion a year. That,
however, is probably only a fraction of the cost. Contractors who pay
less than Davis-Bacon wages on private construction projects are
deterred from bidding on government projects because they fear the
disruptive effects of two-tiered pay scales. Many contractors simply
refuse to bid on Federal projects because they will have to pay some of
their employees more than others for the same work. Thus, Federal work
attracts less competition--and higher winning bids.
The act is incapable of equitable administration. There are simply
too many judgment calls required, too many indeterminate concepts. As a
result, its administration is a mess and its wage rates are arbitrary
and inconsistent. Responses to the Department of Labor's wage surveys
are voluntary and the Department does not verify any of the data it
receives.
The Davis-Bacon Act is demonstrably unnecessary. Labor leaders warn
that construction workers would be victimized and exploited without
Davis-Bacon. Despite the rhetoric, unionized construction firms do
compete effectively in many private markets which are not covered by
the Davis-Bacon Act. Moreover, since the enactment of Davis-Bacon in
1931, other labor protection measures have become law, thus giving
construction workers the same protections which are afforded to other
workers in other industries.
At a time when every American is being asked to sacrifice something
in order to protect our children's future, it would be unconscionable
to let Davis-Bacon continue to exist. Davis-Bacon may have had its time
and purpose, but those are long since past. Now the act is just another
expensive governmental burden to the taxpaying citizen. I urge my
colleagues to join me in supporting repeal of the Davis-Bacon Act.
Mr. Speaker, I include the following for the Record:
[From NBC Nightly News, Oct. 11, 1995]
The Fleecing of America/The Davis-Bacon Act
Tom Brokaw. Time now for our regular Wednesday feature
about your money and how your government wastes it. Tonight,
how phantom construction projects are driving up the cost of
real buildings.
NBC's Robert Hager has details now in this Fleecing of
America.
Robert Hager. Mustang, Oklahoma, a rural town in the
nation's heartland with a brand new $2 million underground
storage tank. But where is it.
Jim Morgan [City Manger]. No, this is not a underground
storage tank.
Hager. In fact, the underground tank was never built,
needed or even proposed. It only exists in these documents,
federal wage survey forms, fraudulently submitted to the U.S.
Labor Department, complete with fake salaries and fake jobs,
intended to persuade the government to set higher
construction wage scales for that area. Remarkably, it
worked.
And since until recently by law, Oklahoma had to pay using
the same wage scales, the state labor commissioner is
furious, saying the fraud is costing taxpayers there millions
of dollars.
Brenda Reneau [Oklahoma Labor Commissioner]. The wage rate
for this area was based on that non-existent or ghost
project.
Hager. A federal law, the Davis-Bacon Act, requires that
construction workers on almost all U.S. government projects,
be paid the prevailing or going salary for a specific region.
Those salaries are set by the wage survey. But critics say
many of those surveys are being rubber stamped without any
checking.
In Oklahoma, the impact on the state's wage rate is
tremendous. A backhoe operator whose salary was 8.40 an hour
started getting $22 an hour. A truck driver whose salary was
7.30 got $15 an hour. Total additional taxpayer cost, $21
million.
On Capitol Hill there's concern.
Rep. Cass Ballenger [R-North Carolina]. If they found out
in Oklahoma that you could get away with cheating, it's not a
secret they must have kept in Oklahoma. It's got to elsewhere
in the country.
Hager. And NBC News has learned the FBI is now
investigating. Because of this, the U.S. Labor Department
says it's limited in what it can say.
Thomas Williamson [Labor Department Attorney]. We take very
seriously allegations of fraud that call into question the
integrity or accuracy of any wage surveys used by the David-
Bacon program.
Hager. In Oklahoma, more fakery. Someone wanted to double
pay for asphalt workers, so a form was sent to the U.S. Labor
Department claiming asphalt workers had made big wages to
resurface a parking lot. But a look today reveals it was
never paved with asphalt. Another survey detailed high wages
to put up a building at a water treatment plant. But a look
today reveals no building to be found, only barbed wire. Now,
because of continued abuse, the U.S. Labor Department has
withdrawn the prevailing wage rate for Oklahoma.
And because she first raised questions of fraud, the state
labor commissioner's life has been threatened. But that's not
stopping her.
Reneau. It's fraud. It's fraud at the fullest extent.
Hager. No one has been charged yet, but there's growing
concern that the system of setting wages on U.S. government
construction projects is so flawed that it's fleecing
taxpayers of hundreds of millions of dollars.
Robert Hager, NBC News, Washington.
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