(Extensions of Remarks - October 24, 1997)

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[Extensions of Remarks]
[Page E2078]
From the Congressional Record Online through the Government Publishing Office []



                             HON. RON PAUL

                                of texas

                    in the house of representatives

                       Thursday, October 23, 1997

  Mr. PAUL. Mr. Speaker, I rise today to introduce the Davis-Bacon 
Repeal Act of 1997. The Davis-Bacon Act of 1931 forces contractors on 
all federally-funded construction 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 60 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 the era during which people 
actually believed Congress could legislate prosperity. Americans pay a 
huge price is lost jobs, lost opporuntities 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 instances, 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 Davis-Bacon regulations at 
nearly $200 million a year. Of course, this doesn't measure the costs 
in lost jobs 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 
  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 small 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 an 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 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 $3 billion in 4 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 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 1997.