September 14, 2005

Congress approved a second Hurricane Katrina emergency spending package and President Bush Sept. 8 waived Davis-Bacon Act prevailing wage rules on all federal construction in the hurricane region.

Federal procurement laws allow the president to suspend the prevailing wage law during a national emergency.

Davis-Bacon rules will be suspended on all contracts signed beginning Sept. 8, and until otherwise determined, in six Alabama counties, three Florida counties, 55 Louisiana parishes and 81 counties in Mississippi.

Calling the property damage from Katrina "unprecedented," the president said Davis-Bacon "increase the cost to the federal government of providing federal assistance to these areas." Suspension of the law "will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals," he said in a formal proclamation.

The non-union Associated Builders and Contractors applauded the White House action, saying it would open the door to entry-level helpers in the rebuilding effort. Small contractors who normally do not compete for federal work can now participate in the rebuilding effort, said an ABC official.

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AFL-CIO President John J. Sweeney denounced the president's waiver, calling the White House action "unbelievable and outrageous." Taking advantage "of a national tragedy to get rid of a protection for workers the corporate backers of the White House have long wanted to remove is nothing less than profiteering. Congress must reverse this short-sighted action," Sweeney said. The federation's Building and Construction Trades Dept. did not issue a formal comment, but some construction unions privately expressed their disappointment.

The second emergency spending bill, approved Thursday in the House and later in the Senate, sends about $50 billion to the Federal Emergency Management Agency's Disaster Relief Fund. The money will be spent for debris removal, temporary housing, property damage assessment, payments to hurricane victims, unemployment insurance, food, water, medicine and search and rescue operations.

The Dept. of Defense will receive $1.4 billion for emergency repairs, evacuation costs and other relief efforts. Another $400 million is earmarked for the Army Corps of Engineers to repair damaged infrastructure.

With the approval of the new spending, requested by President Bush, the rising federal costs of Katrina are coming into clearer focus. The new funding follows an initial installment of $10.5 billion that Congress rapidly approved and Bush signed into law on Sept. 2.

And the new funding won't be the end of the federal spending on the post-hurricane effort, said Office of Management and Budget Director Joshua Bolten. He told reporters, "My expectation is that we will, in fact, need substantially more than the $51.8 billion" that the President requested. "...But this at least puts everybody on very solid footing to perform their tasks in the several weeks ahead." Bolten declined to say how much hurricane relief money the Bush administration would seek beyond what it had already requested from Congress.

Sherie Winston and Tom Ichniowski, Engineering News-Record