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Repeals outdated Davis-Bacon rules, stabilizes Hwy Trust Fund

Congresswoman Virginia Foxx (NC-5) today introduced a bill that will spur the creation of more highway construction jobs by reforming the nation’s Highway Trust Fund.  Her bill, the Highway Trust Fund Reform Act, eliminates costly and wasteful “Davis-Bacon” labor requirements and is a cost-free way to create thousands of jobs while stabilizing the federal Highway Trust Fund.      

“Our Highway Trust Fund is going broke and wasteful Davis-Bacon wage mandates are only hastening its demise,” Foxx said. “By rolling back these outdated and wasteful requirements we can create thousands and thousands of jobs without raising taxes.  Plus, we can keep the Trust Fund solvent and fund additional, important highway projects.”

Foxx’s bill does away with so-called “Davis-Bacon” requirements that inflate the cost of highway projects by mandating artificially high wages.  For instance, Davis-Bacon wage surveys are notoriously error-ridden.  A recent audit found errors in 100 percent of the Davis-Bacon wage reports that were reviewed in the audit.

Federal Bureau of Labor Statistics data also show that Davis-Bacon wages tend to inflate labor costs by at least 22 percent more than prevailing market rates.  In other words, Davis-Bacon mandates are driving up federal highway construction costs.

Additionally, Davis-Bacon requirements force businesses working on federal highway projects to comply with burdensome paperwork and reporting regulations.  Government Accountability Office reports suggest that these Davis-Bacon requirements inflate costs and slow project completion.  Repeal of Davis-Bacon would create more construction jobs and result in faster completion of highway projects at a lower cost. 

“Repealing Davis-Bacon is a common sense step that will give taxpayers more bang for their buck and will also stop proposals for gas tax increases in their tracks,” Foxx said. “After all, in the past three years the Highway Trust Fund has been bailed out to the tune of $34 billion.  Inflated Davis-Bacon wage requirements are a major driver of Highway Trust Fund bailouts.”

The Congressional Budget Office estimates that unless Congress acts, the Trust Fund will need an additional $110.3 billion worth of bailouts in the next 10 years.  To learn more about how outdated Davis-Bacon requirements increase costs and decrease employment please read the recent Joint Economic Committee report on Davis-Bacon requirements and the Highway Trust Fund.