Report: Waiving wage law may not curb Katrina reconstruction costs

A new Congressional Research Service report says suspension of Davis-Bacon Act wage rules would not necessarily ensure federal contracts hold down reconstruction costs in the Gulf Coast and that further research on the economic impacts of the law are needed.

The report, released Monday, comes as conservatives and liberals in the House and Senate have begun pushing for competing measures in the wake of President Bush's decision to suspend the law in the Gulf Coast last month.

Conservatives are pushing legislation that would automatically suspend the wage-protection law in areas designated by the president as disaster areas, while liberals are supporting several bills that would revoke Bush's suspension of the law.

"Perhaps the most frequently asked question concerning the Davis-Bacon Act is: Would the federal government (and the taxpayers) save money if the Davis-Bacon Act were repealed or modified to narrow its scope? The short answer is: No one really knows. Conversely, might Davis-Bacon result in savings to the federal government in its purchases of construction? That, too, would seem to be an open question," CRS argues in "Davis-Bacon Suspension and Its Legislative Aftermath."

According to CRS, drawing conclusions about the law's effects on contracting costs is impossible because "the state of current research would probably be insufficient to justify just an assertion."