[Congressional Record Volume 145, Number 25 (Thursday, February 11, 1999)]
[Extensions of Remarks]
[Pages E210-E211]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                 INTRODUCING THE DAVIS-BACON REPEAL ACT

                                 ______
                                 

                             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!
  Mr. Speaker, it is time to finally end this patently unfair, wildly 
inefficient and grossly discriminatory system of bidding on federal 
construction contracts. Repealing the Davis-Bacon

[[Page E211]]

Act will save taxpayers billions of dollars on federal construction 
costs, return common sense and sound budgeting to federal contracting, 
and open up opportunities in the construction industry to those 
independent contractors, and their employees, who currently cannot bid 
on federal projects because they cannot afford the paperwork 
requirements imposed by this act. I, therefore, urge all my colleagues 
to join me in supporting the Davis-Bacon Repeal Act of 1999.

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