Biden’s Regulatory Wish List Will Make Infrastructure Projects More Expensive

President Joe Biden published the Unified Agenda of Regulatory and Deregulatory Actions on Friday. It was compiled by OMB’s regulatory affairs branch. It is an annual report that lists all regulatory changes the various departments and agencies want to make. Introduction to the report outlines several areas that administration is looking for significant improvements, including COVID-19 Protection, Climate Change Abatement and Mental Health and Substance abuse Treatment.

The report contains many non-specific rules. The report includes one that “proposes to update and modify the regulations implementing Davis-Bacon and Related Acts, to improve their utility in today’s economy and provide more clarity.” Davis-Bacon Act was a 1931 law that required workers who work on federally funded projects worth more than $2,000 to receive the “prevailing wage”. This is the equivalent of the local union wage. According to conservative Heritage Foundation, Davis-Bacon inflated the annual construction cost by more than $11 trillion in 2011.

It would be amazing if the Biden Administration intended to “update” and modernize the Davis-Bacon Act. It is by hollowing out the Act and giving workers the opportunity to compete for federal contracts. Any chance to reduce costs after passing an infrastructure bill which was significantly smaller than the original proposal should have been a clear winner. Biden’s prior rhetoric about the law, even though the rule is vague, has been disconcerting.

Biden’s campaign website noted that “When President Obama placed Vice President Biden in charge the American Recovery and Reinvestment Act, (ARRA), Biden ensured that Davis-Bacon Act and Service Contract Act Standards were strictly enforced. This required that the prevailing wages be paid to all construction workers and service employees on any ARRA-funded projects.” Biden, as president, will continue to build upon this success and ensure that all federal investments in infrastructure or transportation projects are covered by prevailing wages protections.

Biden signed the “Executive Order on Tackling Climate Crisis at home and abroad” a week into his term. It stated that agencies would, in accordance with applicable law apply and enforce Davis-Bacon Act, prevailing wage, and benefit requirements. And in his February remarks to labor leaders regarding his plans for a future infrastructure spending bill, Biden indicated that he expected the legislation to create “jobs—good-paying jobs, Davis-Bacon and prevailing wage jobs.”

It is clear from Biden’s comments on the topic that none of his “updates” to the Davis-Bacon Act will make the law. It’s easier To hire contractors at market prices.