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White House to reinstate wage rules
Bush administration to restore rules that guarantee prevailing pay for workers in hurricane areas.
October 26, 2005: 4:55 PM EDT

WASHINGTON (CNN) - Reversing a decision made in the wake of Hurricane Katrina, the Bush administration will reinstate rules requiring that companies receiving federal contracts for hurricane reconstruction and relief efforts pay local prevailing wages.

The administration said that suspending the rules would reduce rebuilding costs and help open opportunities for minority-owned companies, but critics said it would result in lower pay for workers.

Members of Congress were first informed of the decision at a White House meeting with Chief of Staff Andrew Card on Wednesday morning.

The decision, which means that workers will get wages closer to what they were making before the hurricane, was met with approval by Republicans and Democrats, many of whom felt that out-of-state workers were descending on hurricane-ravaged areas and working for a fraction of a living wage.

The Davis-Bacon Act, which guarantees the wage levels, was suspended Sept. 8. It will be reinstated Nov. 8.

Rep. Steven LaTourette, R-Ohio, who attended the White House meeting, told CNN that the situation was unacceptable.

"The danger we have in the Gulf Coast in general is profiteering. When you have these large contracts and again, when you suspend some protections ... it appears you can pay people whatever you want to pay and the rest of the money goes into the profit column of the corporation," he said.

Rep. George Miller, D-Calif., who has led his party's charge against the Davis-Bacon suspension, said in an interview with CNN, "At least those wages will be protected where federal money is involved, and that's very important to the economy of that region. This is why we couldn't understand how the president could take such a callous position immediately after the hurricane to just decimate the protections for the wages of people who are trying to rebuild their families, their communities, their lives."

-- from CNN Business News Senior Producer Scott Spoerry


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