House Committee on Education and Labor
U.S. House of Representatives
Republicans
Rep. Howard P. “Buck” McKeon
Ranking Member
Fiscally responsible reforms for students, workers and retirees.
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Blog
Davis-Bacon Should be a Provision of the Past
In response to President Obama's own words from his Inaugural Address, The Wall Street Journal today highlighted the need to repeal Davis-Bacon in the editorial, How to Save $40 Billion: One suggestion for transcending 'worn-out dogmas.' The article underscores that the Act "tangles projects in red tape and inflates federal construction costs."
"A 2008 study by Suffolk University and the Beacon Hill Institute examined local wage data for construction workers and found that the Department of Labor estimates for the "prevailing wage" in cities are about 22% above the actual wages paid in these cities. It estimates that Davis-Bacon adds slightly less than 10% federal building costs, or $8.4 billion a year."
The impact of Davis-Bacon, or federal prevailing wage, stifles an economy that greatly needs a boost by adding unnecessary spending and administrative burdens on federal construction projects. The editorial went on to say that:
"The savings for taxpayers from waiving Davis-Bacon would be even greater amid the staggering new spending contemplated for the stimulus bill. Let's say Congress spends $400 billion over the next two years on roads, mass transit or other construction. Assuming only a 10% cost savings -- the lower end of economic estimates -- would mean about $40 billion in lower spending for the same projects. Congress could either forego that spending, which would mean a smaller claim on future taxpayers, or it could spend that money to fund more projects that would hire more workers."
Education and Labor Committee Republicans hope the Senate will accept an amendment by Senator Jim DeMint (R., S.C.) to the current economic stimulus draft to suspend outdated Davis-Bacon rules for stimulus spending and follow the President's rhetorical lead to go against those "worn-out dogmas."
| Posted by Press Staff (01-21-2009, 04:09 PM) filed under Labor |
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