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Davis-Bacon Act: Depression-Era Law Becomes Unlikely GOP Campaign Issue

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WASHINGTON -- In his attempts to tar former Sen. Rick Santorum as fiscally irresponsible, GOP presidential hopeful Mitt Romney has been knocking his opponent for a stance he took on an 81-year-old federal statute that many Americans have probably never heard of: the Davis-Bacon Act.

During Wednesday night's debate on CNN, Romney said Santorum voted in support of Davis-Bacon and that the law was costing American taxpayers "$100 billion over 10 years." Later, speaking to Michigan voters Thursday night, Romney declared, "One of the first things that I'll do actually on Day One is I will end the government's favoritism toward unions on contracts and I will fight to repeal Davis-Bacon."

If Davis-Bacon isn't the most effective talking point at campaign rallies, that's probably because the law requires a bit of explanation. Passed during the Great Depression, the Davis-Bacon Act established "prevailing wages" for publicly funded construction projects. If taxpayer dollars are involved, then companies bidding on a project are required to pay certain minimum wages for certain jobs performed, to be determined by the Labor Department. Although the underlying motivations for the law are disputed, Davis-Bacon basically guarantees that contractors won't take public money, then pay workers below-market rates for their labor.

Unions and left-leaning economists generally consider Davis-Bacon a bedrock of modern labor law. Ross Eisenbrey, vice president of the Economic Policy Institute, has studied the act and said it ensures "the government isn’t involved in depressing wages," given that wages set by public projects have ripple effects across the economy. If a contractor wants to submit a lowball bid, Eisenbrey said, then Davis-Bacon guarantees "they're getting a smaller profit rather than taking it out of the hide of workers."

Conservatives mostly view Davis-Bacon as bad public policy. James Sherk, labor policy analyst at the conservative Heritage Foundation, argues that under Davis-Bacon the government uses union wage scales that inflate the costs of government-funded projects. Romney has echoed those thoughts, painting Davis-Bacon as a handout to unions.

In making that argument, the Romney campaign apparently has been relying on Sherk's research. Sherk produced a memo last February arguing that repealing Davis-Bacon would save taxpayers $10.9 billion per year. The Romney campaign has linked Sherk's work directly on its website. (Sherk and Eisenbrey have both testified on Davis-Bacon and strongly disputed one another's work.)

"It is somewhat surprising," Sherk said when asked about the little-known law bubbling up in the campaign. "You don’t normally see a lot of attention paid to it. I think it's a good sign."

Sherk views Davis-Bacon as a "subsidy" for unions, and he said that it's "totally fair to knock Santorum on it." As the Romney campaign website notes, Santorum cast a vote with mostly Democrats in 1996 in support of the Davis-Bacon Act. Santorum did not directly address Davis-Bacon after Romney broached the subject during Wednesday's debate.

But repealing Davis-Bacon as soon as possible is little more than fantasy. The law has survived eight decades for a reason. Efforts at wholesale repeal have popped up over the years, only to go nowhere; Republicans would likely need both chambers of Congress as well as the White House to repeal it. And even then, the political calculus would probably tell several Republicans that rolling back a Depression-era law that most voters aren’t even familiar with isn't worth the cost of infuriating labor groups and workers.

If nothing else, Santorum's Davis-Bacon vote is an easy if obscure soundbyte for portraying the contender as pro-union. The Santorum campaign didn't respond to a request Friday for comment on the law. EPI's Eisenbrey, however, argues that Santorum cast the right vote in 1996.

"The problem we have is that wages have been stagnant or falling for 30 years," Eisenbrey says. "Why would you want to drive wages down for working people?"

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