How much is this going to cost? That’s the question on everyone’s mind as the Trump administration begins focusing on a comprehensive infrastructure deal. The good news is that with the right reforms, Congress can meet many of our nation’s infrastructure needs without spending a single new dollar.
Congress wasting billions of dollars is nothing new to American taxpayers. But it’s particularly obvious when it comes to infrastructure spending. From the artificially inflated construction costs of prevailing wages and project labor agreements, to the billions of dollars in federal gas taxes diverted to pay for projects having nothing to do with roads and bridges, to unnecessary projects that lose money every year, Washington is awash in potential savings that could be redirected to rebuilding our nation’s infrastructure.
Start with prevailing wages. A vestige of the Davis-Bacon Act of 1931, prevailing wages have a long and sordid history. Originally enacted to price minority workers — predominantly blacks — out of federal construction projects, prevailing wages require government construction projects to pay workers the going rate as determined by regulators and surveys. But this essentially pegs construction pay to union wages — killing any non-union competition.
Though they may have lost their racist intent in the decades since, prevailing wages still increase the costs of federal construction projects today. A 2008 study from the Beacon Hill Institute found that Davis-Bacon artificially inflates construction wages by 22 percent. According to the nonpartisan Congressional Budget Office, repealing the Davis-Bacon Act would save roughly $13 billion over the next 10 years.
To put those numbers into perspective, it can cost up to $11 million per mile to construct a six-lane interstate, according to the American Road and Transportation Builders Association. That means the savings from repealing Davis-Bacon would pay for nearly 1,200 miles of brand new…