Discretionary Spending

Multiple Budget Functions

Repeal the Davis-Bacon Act

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2023–
Change in Discretionary Spending  
  Spending authority 0 -1.5 -3.0 -3.0 -2.6 -2.7 -2.8 -2.8 -2.9 -2.9 -10.2 -24.3
  Budget authority 0 -0.8 -1.6 -1.6 -1.2 -1.2 -1.2 -1.3 -1.3 -1.3 -5.2 -11.5
  Outlays 0 -0.6 -1.7 -1.9 -2.0 -2.1 -2.1 -2.1 -2.1 -2.1 -6.3 -16.7
Change in Mandatory Outlays 0 * * * * * * * * * -0.2 -0.4

This option would take effect in October 2023.

Spending authority includes both budget authority and obligation limitations (such as those for certain transportation programs).

These estimates include savings in budget authority that was specified by division J of Public Law 117-58, the Infrastructure Investment and Jobs Act (IIJA), which provided funding through 2026 for certain programs. In the Congressional Budget Office's baseline, IIJA funding is projected to continue in future years; these estimates do not include that projected funding.

* = between -$50 million and zero.

The Davis-Bacon Act requires that workers on all federally funded or federally assisted construction projects whose contracts total more than $2,000 be paid no less than the prevailing wages in the area where the project is located. In 2022, about half of all federal or federally financed construction was funded through the Department of Transportation.

This option would repeal the Davis-Bacon Act, thereby lowering the federal government's costs for construction. The reduction in wages and benefits would account for most of the savings from repeal; repealing the Davis-Bacon Act would also reduce contractors' administrative costs associated with compliance. To reflect those lower costs, the option would make corresponding reductions in mandatory and discretionary appropriations and in limits on the government's authority to enter into obligations for certain transportation programs. Most of the spending for federal or federally financed construction is discretionary, but this option would also result in a small reduction in mandatory outlays.