Segment Transcript
Lou Dobbs Tonight - September 21, 2005
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DOBBS: The Bush administration says it can cut red tape and inefficiency in the disaster region by denying construction workers there the prevailing wage. And it may also extend to the Gulf Coast services sector. Concern is now growing that the Bush administration may relax wage and hiring standards that have helped Gulf Coast service workers make ends meet.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Janitors and housekeepers cleaning up for the federal government in the gulf region may have their wage protection stripped away. There's talk in Washington the Labor Department may roll back the 1965 McNamara-O'Hara Service Contract Act that guarantees service employees working for the federal government the prevailing or average wage.

After Katrina hit, the Bush administration waived the wage requirement for construction workers under the Davis-Bacon act and may do the same for service employees.

These workers are already paid some of the lowest wages in the country.

ROBERT SHULL, OMB WATCH: Some of these waivers are of regulations that the administration and their allies in industry have wanted to attack or weaken for some time now. And we're definitely concerned that this could be -- that Katrina could become an all- purpose excuse for more corporate giveaways.

SYLVESTER: Labor Secretary Elaine Chao was asked last week if the contract act would be suspended. She reportedly answered, "I don't believe so." Today, the Labor Department said there are currently no plans, but lawmakers insist the administration is still looking for a way to lift the requirement.

REP. GEORGE MILLER (D), CALIFORNIA: We're hearing from all different sources that, in fact, they are going to roll back the protection for service workers. What we really need is a definitive statement from the White House that they're not going to undercut the wages of service workers who are helping out with hurricane recovery.

SYLVESTER: The White House did not have a comment. It's deferring to the Labor Department. Meanwhile, Republicans who support waiving wage rules say it will reduce red tape and bureaucracy, as residents rebuild. But Democratic critics say it's slashing wages of some of the most vulnerable Americans.


SYLVESTER: The Davis-Bacon Act has a loophole that allowed the president to suspend the wage rule for a natural disaster with just the stroke of a pen.

Now, the service contract act does not have the same provision, making it much more difficult. But according to lawmakers, the Labor Department may be able to get around that by simply issuing a new interim rule or seeking a change in legislation -- Lou.

DOBBS: The administration has said that lower wages result in greater competition capacity on the part of the American worker. There's no competition here. This is entirely domestic. Any economic rationale advanced for this?

SYLVESTER: There really doesn't seem to be any explanation, other than what they have said before, which is the standard line that they want to try to reduce and cut down on the red tape and bureaucracy. But ultimately, it's going to be the workers who will be hurt, Lou.

DOBBS: Thank you very much, Lisa Sylvester from Washington.

Senator Ted Kennedy, Senator Charles Schumer and Senator Tom Harken introduced legislation today that directly challenges the president's suspension of the Davis-Bacon Act. I asked Senator Kennedy earlier about his objection to the president's directive, a directive that is categorically denying construction workers in the gulf region prevailing wages.


SEN. EDWARD KENNEDY (D), MASSACHUSETTS: As you probably know, Lou, there wasn't even a suspension of Davis-Bacon after 9/11, and we also know the trauma that that extraordinary devastation brought.

DOBBS: Right.

KENNEDY: And the reason then thought was because we want to be fair to the people who have to rebuild their lives.

It seems that that logic applies here in the gulf area. Hard working people, trying to rebuild their families, trying to rebuild their families, trying to rebuild their homes, trying to rebuild their region.

We're talking 22, 23, 24, 25 thousand dollars a year without benefits. That doesn't seem to be excessive to me. That barely reaches the area of being fair.

Meanwhile, these cost-plus contracts, the contractors themselves will walk away with tens of millions, hundreds of millions in profit. And that is not what the American people want. They want to have a hand out to people, but not a hand out to these major contractors.

This shouldn't be a program which is effectively a piggy bank for these major contractors. We ought to be looking to how we're going to help the families the hundreds of thousands of families who have been devastated by this terrible, terrible hurricane.


DOBBS: Jesse Jackson says he's seeing firsthand major hiring abuses right now in the Gulf Coast, resulting from the suspension of Davis-Bacon. Reverend Jackson just returned from New Orleans and joins us tonight from Washington, D.C.

Jesse, first of all, do you see any evidence that more people are being hired? Because that was part of the rationale on the part of the Bush administration.

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: Well, really, it amounts to a hurricane for the victims and a windfall for Halliburton and Bechtel, because when you suspend Davis-Bacon and make jobs below the average prevailing wage, they are busing in immigrant workers to, in fact, take those jobs.

There are no incentives for the victims of the hurricane to, in fact, have priority on jobs, job training and contracts.

DOBBS: And the priority should be, without question, those who live in the region, but many have been evacuated from New Orleans. What is the feeling amongst the people of New Orleans with whom you've spoken about what's going on?

JACKSON: It compounds their sense of alienation. For example, these five $100 million no bid contracts are for clean-up purposes. So Halliburton may get $30 a yard for removing debris, they want local workers to get $6 a yard to remove it. So, there seems to be a cap on wages and insurance, but no cap on profits.

See, we complained about -- we said those who were left behind were too poor to get out. If you reduce people to $6 an hour wages, they still can't buy a car. They can't buy gas. They can't buy a homestead house. You're condemning workers to poverty, but no limits for those who are getting no-bid -- and I meant not necessarily no-bid contracts.

DOBBS: Well, let me ask you Jesse, the mayor of New Orleans, the governor of Louisiana, why in the world aren't they protesting and representing their constituents in this? Because it is on the face of it -- well, the nicest word I can put it is unreasonable to allow open-ended contracts, cost-plus, and put a minimum effectively, to reduce the minimum that workers will be paid.

JACKSON: Well, it is a federal bailout on the states' rights conditions deal. And they're using the excuse of the emergency to suspend prevailing wages which are below union wages, I might add. And to suspend affirmative action, to suspend workers' rights.

I mean, there's no job in cleanup. The small business in Gulfport, or in Biloxi, or Pascagoula, Mobile, you're talking about trucking and hauling and dumping. All these jobs could be handled by disaster relief victims. So why can't the disaster victims have priority on job training and jobs and contracts? There's no victims relief fund. And they want to dumb down wages and make them less able? They're compounding their misery. It's unfair.

DOBBS: Reverend Jesse Jackson, we thank you for being with us.

JACKSON: Thank you.

DOBBS: Coming up next here, a modern day exodus for many residents of the Gulf Coast. Hundreds of people who fled to Texas after Katrina are now being forced to move once again. We'll have a live report. We'll be talking with some of the people for whom this will be the second hurricane in less than a month that they have to flee.

And Hurricane Rita, now a massive category five storm. We'll have a live update on how it became so powerful, so fast. And an update on where it is now headed. Stay with us.


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