HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
Thursday, February 11, 1999
1999 Ron Paul 7:1 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.
1999 Ron Paul 7:2 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.
1999 Ron Paul 7:3 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.
1999 Ron Paul 7:4 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.
1999 Ron Paul 7:5 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.
1999 Ron Paul 7:6 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!
1999 Ron Paul 7:7 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!
1999 Ron Paul 7:8 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
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.
Notes:
1999 Ron Paul 7:1
federally-funded contraction probably should not be hyphenated, and probably should be:
federally funded construction.
1999 Ron Paul 7:1
congressionally-created probably should not be hyphenated:
congressionally created.
