Foxx Introduces Legislation to Reduce Costs Associated With Federal Construction Projects
WASHINGTON – March 23, 2015 – (RealEstateRama) — Rep. Virginia Foxx, R-N.C., has introduced legislation to stretch the limited funds available to the Highway Trust Fund by exempting it from the Davis-Bacon Act’s outdated, wasteful labor requirements for federal-aid highway and public transportation projects.
“With Highway Trust Fund deficits expected to hit $157 billion by 2024, it makes sense to exempt the fund from Davis-Bacon’s expensive and overly burdensome wage requirements,” said Foxx. “Big Labor should not continue to use this Depression-era legislation as a shield to line its own pockets at the expense of non-union workers and taxpayers.”
The Davis-Bacon Act, which became law in 1931, requires federal contractors and subcontractors to pay the local prevailing wage for construction projects on which the federal government is a party. For decades, it has been driving up the cost of federal highway projects by mandating artificially high wages.
According to a 2011 Joint Economic Committee report, Davis-Bacon-determined wages tended to inflate labor costs an average of 22 percent above market rates. Researchers at Suffolk University also found in a 2008 study that Davis-Bacon requirements cost U.S. taxpayers an additional $8.6 billion annually and add 9.9 percent to construction costs.
Beyond increasing construction costs for taxpayers, Davis-Bacon requirements force businesses working on federal highway projects to comply with burdensome paperwork and reporting regulations. Reports from the Government Accountability Office suggest that these Davis-Bacon requirements inflate costs and slow project completion.
By removing the Davis-Bacon’s implications from federal-aid highway and public transportation projects, H.R. 1483, the Highway Trust Fund Reform Act, would free up funds to create more market-priced construction jobs and more affordable, timely completed projects.
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U.S. Rep. Virginia Foxx represents North Carolina’s 5th Congressional District and is the elected Republican Conference Secretary. Dr. Foxx is the chair of the House Education and the Workforce Subcommittee on Higher Education and serves as Vice Chair of the House Rules Committee
