A 1935 law intended to protect contractors from unfair competition by roaming gangs of gypsy construction workers is now costing taxpayers dearly, according to "Prime Cuts," a summary of ways to turn Uncle Sam into a leaner, meaner fighting machine.

If Congress would eliminate the Davis-Bacon Act, says Citizens Against Government Waste, a watchdog group dedicating to eradicating mismanagement and inefficiency in the federal government, the savings would be about $2 billion over five years.

In the overall scheme of things, that's not a lot of money. But if all 44 options outlined in CAGW's latest compendium of potential budget cutters, we'd save $1.2 trillion over the same period.

"Prime Cuts is our answer to the clamor within Congress to spend the surplus and lift the budget caps," says CAGW President Thomas Schatz. "With all this fat bloating the budget, Congress shouldn't be talking about how to spend, but where else to cut."

Schatz says there are actually "hundreds of federal programs" that are obsolete, mismanaged, wasteful, rife with fraud, or better left to the private sector. "Taken together, they represent an enormous burden on taxpayers," he adds. "The only people at risk if these programs disappear are those who habitually feed at the federal trough."

Davis-Bacon was enacted to ensure that "prevailing wages" were paid on federal construction projects worth $2,000 or more. But now, it's a waste, says CAGW, a private, nonprofit, nonpartisan organization which claims 600,000 members.

"Instead of protecting workers, this act increases federal construction costs and discriminates against small business, women and minorities," the group maintains. "Many public housing tenants who wish to fix up their buildings are forced to pay union wages, which can average more than $20 an hour, to do simple tasks such as sweeping or light maintenance work."

Citizens Against Government Waste also would like to see the Department of Housing and Urban Development eliminate the community development block grant program and do a better job handling federal rent subsidies. Ending block grants would save $14.4 billion over five years, the group figures. Improving control of the rent subsidies program would save $8.8 billion more.

The CDBG program was established to provide formula grants to help low and moderate- income households, end urban blight and meet emergency needs. But in fiscal 1999 alone, lawmakers earmarked 334 specific projects. And instead of going to the states as block grants, CAGW claims, many went to "some of the richest towns in America" and included such necessities as an opera house, a symphony hall, a soccer center and a botanical garden.

But "even if funds were spent properly," the report goes on, "the CDBG program should be eliminated because states and localities are better qualified than the federal government to address the needs of individual communities."

Under the rental subsidy program, tenants are required to pay 30 percent of their incomes for rent. But they often pay less because they forget to disclose all their earnings, say the budget watchers, who want HUD to keep better track of what residents make. They also want HUD to gradually increase the income share to 35 percent.

"On average, non-subsidized renters pay roughly 50 percent of their incomes for rent," the group points out. "Changing the formula to 35 percent is still more than fair."

Published: July 26, 1999

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.