Statements on Introduced Bills and Joint Resolutions: S. 195

Senator Jeff Flake
Congressional Record: 115th Congress
24 January 2017

 S. 195. A bill to expedite the deployment of highway construction 
projects; to the Committee on Environment and Public Works.
  Mr. FLAKE. Mr. President, I rise to speak of legislation I am 
introducing today--the Transportation Investment Recalibration to 
Equality Act, or the TIRE Act. The TIRE Act would suspend the Davis-
Bacon prevailing wage requirement on all transportation-related 
infrastructure contracts. This would free up billions more in taxpayer 
dollars to be spent on jobs and on projects.
  For those who are not familiar, Davis-Bacon is a Depression-era law 
that requires contractors on Federal construction projects to pay 
workers no less than the so-called local prevailing wage. Now, since 
its enactment over 80 years ago, the Department of Labor has been 
unable to devise an effective system for determining prevailing wages.
  In fact, a 2004 Department of Labor inspector general report revealed 
that Federal wage reporting surveys, which are a key metric used to 
determine prevailing wages, are fundamentally flawed. Of all the wage 
report surveys reviewed by the IG, 100 percent contained flaws. Let me 
say that again: 100 percent of all the surveys were flawed.
  In addition, some of the wage surveys have not been updated since the 
1980s. The bottom line is that every time Davis-Bacon applies to a 
Federal project, less money is going to construction and more money is 
going to meet onerous wage requirements. According to the Beacon Hill 
Institute, Davis-Bacon forces taxpayers to pay 22 percent above the 
market rate for labor on Federal infrastructure projects.
  This is largely the result of disproportionate union participation in 
flawed wage surveys that skew Federal decisionmaking. Now, despite 
representing only 4 percent of the construction industry, unions are 
able to leverage their clout with Federal bureaucrats to inflate more 
than 60 percent of prevailing wages--talk about benefitting a few at 
the expense of the many.
  Here is some perspective on what it means in real dollars. In 2016, 
the Federal Government spent $23 billion on Federal construction 
projects, and 2.1 billion of these dollars was spent on above-rate 
labor costs.
  Again, $2.1 billion of the $23 billion spent was on above-market-rate 
labor costs. This means that nearly 10 percent of all Federal 
construction spending last year went to inflated contracts. Not only 
does this translate into less construction funding going to actual 
construction, but according to George Mason University, it results in 
roughly 30,000 lost construction jobs.
  So we lose both on the projects and the jobs that are created. More 
broadly, it discriminates against small businesses that don't have the 
resources to meet onerous Federal reporting and compliance 
requirements. Now, while it may be well-intentioned, Davis-Bacon ends 
up eliminating decent-paying construction jobs and hampering 
infrastructure spending.
  I have often talked to State and local officials who will say that if 
you have two bridges across the same river, even if they are just 100 
yards or 200 yards or a mile apart with the same underlying costs--or 
what should be the same underlying costs--if there are Federal moneys 
involved in one and no Federal moneys involved in the other, the one 
with Federal moneys will cost significantly more, and a big portion of 
that is because of Davis-Bacon requirements.
  Now, in this body, we have to look for issues to bridge the partisan 
divide. It turns out that one of these issues is bridges, roads, dams, 
and other infrastructure projects. Fixing our Nation's crumbling 
infrastructure is a top priority for many in Congress, and the new 
administration has touted a large infrastructure package as one of its 
agenda items.
  However, despite the bipartisan consensus on both ends of 
Pennsylvania Avenue for infrastructure investment, visions for the road 
ahead actually diverge. With a projected pricetag north of $800 billion 
for highways and bridges alone, every Federal dollar needs to be spent 
as efficiently as possible.
  The TIRE Act will return wage determinations for Federal 
transportation projects where they belong, and that is the market.