In the last two “How to Cut the Budget” posts, here and here, I suggested that we can significantly cut our Federal Budget and showed examples of how it might be done.  Let me give you one more small thing that we could do that would lower the cost of our government.

Repeal the Davis-Bacon Act.  The Act requires that almost any job done with any Federal funds will be done with workers paid the “prevailing wage.” Prevailing wage is a union driven price for labor that is usually far higher than the wage commonly paid for similar work in the area.  There is a huge bureaucracy in the Department of Labor that does nothing but publish the “prevailing wages” and police jobs that are built even partially with Federal Funds.  I misspoke.  Actually there are three huge bureaucracies:  The Department of Labor, The Employee Standards Administration, and The Wage Hour Division.  If you want to see why it costs twice as much as it should to build a government building (almost any building with Federal Dollars contributed to its funding), just  search out the “prevailing wage” in your county and compare that with local common wage rates.  In my county in Oregon, most carpenters are paid around $20 per hour.  The Davis Bacon rate (wage plus required benefit allowance) is $40.01.

Don’t get me wrong.  We won’t balance the budget on repeal of Davis-Bacon.  We won’t balance the budget by cutting the entire Department of Labor Budget of  about $14 Billion.   However, we do around $125 Billion of public construction each year so saving even a quarter of that by repealing Davis-Bacon is significant.  It would be about 1% of the total budget.

Since the 1980 White House Conference on Small Business, I have been trying to find someone who could give me a good reason why this act should not be repealed. Haven’t heard a good reason yet.   If you have one, have at it.  In the meantime, consider that this is a single vestage of the past that has hung on like much of our government.  If you ask yourself why we have not repealed the Davis-Bacon Act, you must also ask:

1.  Why do we subsidize farmers to grow corn for ethanol (which costs more to produce than the energy to produce it)?

2. What business is it of the Federal Government how much I pay to an employee?  Isn’t a Federal Minimum Wage Law illegally usurping the power of the state (visit the 10th Amendment and ask just how much the Feds should be involved in most of their activities)?

3. Why should the Federal Government be involved in financing schools?  Does the Constitution suggest that our Federal Government is somehow responsible for paying for locally run schools?

4.  If the Department of Energy has yet to produce a single ounce of oil, why do we spend about $30 Billion a year on a department that was created in 1977 to help us achieve independence from foreign oil?

5.  Why do we tolerate a government purchasing system that makes it almost impossible for small businesses to sell goods to Federal Government Agencies?

6.  Why do we need to spend hard earned tax dollars (and lots of fake money, like the 41% annual budget deficit) to protect citizens of Libya from their ruler?

The list goes on forever.  I think it illustrates that cutting the 10% every year for 5 years is both doable and might even get us back to prioritizing how we spend our tax dollars.  Wouldn’t it be refreshing to have our money spent on appropriate uses and then used effectively to achieve our goals for government.