[Congressional Record Volume 163, Number 13 (Tuesday, January 24, 2017)]
[Senate]
[Page S447]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. FLAKE:
S. 195. A bill to expedite the deployment of highway construction
projects; to the Committee on Environment and Public Works.
Mr. FLAKE. Mr. President, I rise to speak of legislation I am
introducing today--the Transportation Investment Recalibration to
Equality Act, or the TIRE Act. The TIRE Act would suspend the Davis-
Bacon prevailing wage requirement on all transportation-related
infrastructure contracts. This would free up billions more in taxpayer
dollars to be spent on jobs and on projects.
For those who are not familiar, Davis-Bacon is a Depression-era law
that requires contractors on Federal construction projects to pay
workers no less than the so-called local prevailing wage. Now, since
its enactment over 80 years ago, the Department of Labor has been
unable to devise an effective system for determining prevailing wages.
In fact, a 2004 Department of Labor inspector general report revealed
that Federal wage reporting surveys, which are a key metric used to
determine prevailing wages, are fundamentally flawed. Of all the wage
report surveys reviewed by the IG, 100 percent contained flaws. Let me
say that again: 100 percent of all the surveys were flawed.
In addition, some of the wage surveys have not been updated since the
1980s. The bottom line is that every time Davis-Bacon applies to a
Federal project, less money is going to construction and more money is
going to meet onerous wage requirements. According to the Beacon Hill
Institute, Davis-Bacon forces taxpayers to pay 22 percent above the
market rate for labor on Federal infrastructure projects.
This is largely the result of disproportionate union participation in
flawed wage surveys that skew Federal decisionmaking. Now, despite
representing only 4 percent of the construction industry, unions are
able to leverage their clout with Federal bureaucrats to inflate more
than 60 percent of prevailing wages--talk about benefitting a few at
the expense of the many.
Here is some perspective on what it means in real dollars. In 2016,
the Federal Government spent $23 billion on Federal construction
projects, and 2.1 billion of these dollars was spent on above-rate
labor costs.
Again, $2.1 billion of the $23 billion spent was on above-market-rate
labor costs. This means that nearly 10 percent of all Federal
construction spending last year went to inflated contracts. Not only
does this translate into less construction funding going to actual
construction, but according to George Mason University, it results in
roughly 30,000 lost construction jobs.
So we lose both on the projects and the jobs that are created. More
broadly, it discriminates against small businesses that don't have the
resources to meet onerous Federal reporting and compliance
requirements. Now, while it may be well-intentioned, Davis-Bacon ends
up eliminating decent-paying construction jobs and hampering
infrastructure spending.
I have often talked to State and local officials who will say that if
you have two bridges across the same river, even if they are just 100
yards or 200 yards or a mile apart with the same underlying costs--or
what should be the same underlying costs--if there are Federal moneys
involved in one and no Federal moneys involved in the other, the one
with Federal moneys will cost significantly more, and a big portion of
that is because of Davis-Bacon requirements.
Now, in this body, we have to look for issues to bridge the partisan
divide. It turns out that one of these issues is bridges, roads, dams,
and other infrastructure projects. Fixing our Nation's crumbling
infrastructure is a top priority for many in Congress, and the new
administration has touted a large infrastructure package as one of its
agenda items.
However, despite the bipartisan consensus on both ends of
Pennsylvania Avenue for infrastructure investment, visions for the road
ahead actually diverge. With a projected pricetag north of $800 billion
for highways and bridges alone, every Federal dollar needs to be spent
as efficiently as possible.
The TIRE Act will return wage determinations for Federal
transportation projects where they belong, and that is the market.
______