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Wednesday, January 21, 2009

Repeal Davis-Bacon

The WSJ has a quick and easy way to saving $40 billion (probably even higher): repeal the 1931 Davis-Bacon Act.

We're referring to the 1931 law that requires contractors on all federal projects to pay a "prevailing wage." In practice, this means paying the highest union wage in every part of the country. Over the years nearly every analysis -- by the Congressional Budget Office, the Government Accountability Office and Office of Management and Budget -- has concluded that Davis-Bacon 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% to federal building costs, or $8.4 billion a year.

I don't expect it to happen - political favors to unions are a lot more important to this Congress than saving taxpayer money.