[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 It is the perfect example of an outdated, expensive and 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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