US Senate Committee on Health, Education, Labor, & Pensions

Alexander Cosponsors Bill to Repeal Davis-Bacon Act, Save Taxpayers Billions Each Year

Alexander told Congress in 1995 that Davis-Bacon was “a big favor for the unions” but “no favor at all…for efficiency or economy”

Thursday, July 17, 2014Liz Wolgemuth / Jim Jeffries 202-228-4729

“Enough is enough: For 83 years, this handout to labor unions has meant that, rather than getting the job done for the lowest cost, taxpayers get charged extra on everything from building roads to painting buildings.” –Lamar Alexander

Washington, D.C., July 17– U.S. Senator Lamar Alexander (R-Tenn.), the senior Republican on the Senate labor committee, today cosponsored a bill introduced by Senator Mike Lee (R-Utah) to repeal the Davis-Bacon Act, a law mandating a wage subsidy on nearly all federally funded construction projects.

“Enough is enough: For 83 years, this handout to labor unions has meant that, rather than getting the job done for the lowest cost, taxpayers get charged extra on everything from building roads to painting buildings,” Alexander said.

In 1995, Alexander testified before Congress urging the repeal of legislation that extended Davis-Bacon provisions to school construction and renovation, saying: “That means a principal in Moline who wants to hire a contractor to rewire his school for new computers must pay the prevailing union wage rather than getting the job done for the lowest cost. It's a big favor for the unions, but no favor at all for schools, efficiency or economy.”

The Davis-Bacon Repeal Act would repeal the federal legislation that requires all contractors and subcontractors working on federally funded or assisted contracts worth more than $2,000 for the construction, alteration and repair of public buildings or public works to pay the local “prevailing wage,” as determined by the Department of Labor.

The bill was also cosponsored by Senators Ted Cruz (R-Texas), Tim Scott (R-S.C.), Jeff Sessions (R-Ala.), Tom Coburn (R-Okla.), Ron Johnson (R-Wis.), John Cornyn (R-Texas), Marco Rubio (R-Fla.) and David Vitter (R-La.).

The Congressional Budget Office reports that Davis-Bacon requirements increase construction costs by raising wages on federal projects, by requiring labor to be used in a costly fashion, and by imposing reporting and paperwork requirement on contractors. CBO estimates that a repeal would save $12.7 billion over ten years.

A 2008 Suffolk University study found that Davis-Bacon requirements cost U.S. taxpayers an additional $8.6 billion annually and add 9.9 percent to construction costs.

The Department of Labor’s data on prevailing wages is expensive to collect and is subject to error, bias and fraud. The department’s Inspector General has found these problems to be pervasive, despite millions invested to improve data collection.

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