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New Senate H-1B Bill Introduced on a Fast-Track
House Hearing Documents Labor Shortages; Greenspan Once Again Affirms Immigration As A Solution
House and Senate Hold Border Security Hearings
Administration Sends Proposed FY 2001 INS Budget to Congress

SPOTLIGHT: AFL-CIO Endorses Amnesty and Opposes Employer Sanctions; Still Opposes Temporary Employee Visas

Connect! has recently learned that the INS is drafting a notice for the Federal Register indicating the agency’s belief that it has received enough H-1B filings to reach this year’s annual cap. The agency believes that the notice could be published within the next couple of weeks. INS sources would not comment on whether the agency would cease accepting FY2000 petitions upon publication of the notice (as they did when last year’s quota was reached), nor would they state what the cut off date for the last petitions likely to get in under the cap might be. Connect! will report on the INS plans for processing FY2001 cases when the information is available.

Senators Orrin Hatch (R-UT), Chairman of the Senate Judiciary Committee, and Spencer Abraham (R-MI), along with 17 other Senators (including Democrats Dianne Feinstein (CA), Joseph Lieberman (CT) and Bob Graham (FL)), introduced S. 2045, the American Competitiveness in the 21st Century Act in early February. Following on three H-1B bills introduced last year, this bill would increase the H-1B cap to 195,000 for the current and next two fiscal years, and exempt from the cap employees of higher educational institutions and research institutions, and foreign students graduating from U.S. schools with Masters or Ph.D. degrees. S. 2045 also would address problems resulting from per-country limits by allowing excess employment-based immigrant visa numbers to be used by nationals from oversubscribed countries and extending nonimmigrant status for individuals hitting their six-year cap due to those limits. Additionally, the bill would require INS to extend the nonimmigrant status of individuals who have had employment-based immigrant visa petitions or adjustment of status applications pending for more than one year. Finally, S. 2045 would allow H-1B nonimmigrants changing employers to begin employment with the new employer upon filing a new H-1B petition.

Because of support from Senators Hatch and Abraham, as well as Senate leadership, S. 2045 is likely to become the Senate vehicle for raising the H-1B cap this year. However, the road will not be without bumps. Senator Kennedy (D-MA) and several other Democrats have indicated that they probably will introduce an alternative bill that most likely would include a more modest H-1B increase, limit visa eligibility, and emphasize training of U.S. workers for high-tech positions. Senator Hatch has indicated he will mark-up S. 2045 by mid-March.

However, even if this measure passes the Senate, the House still must move. Last year, Representative David Dreier (R-CA) introduced H.R. 2698. He plans to revise this bill and reintroduce it this Session. Because there are so few legislative days during this session of Congress and INS most likely soon will announce the expiration of H-1B visa numbers for this fiscal year (see Box above), businesses should act quickly to urge their Members of Congress to support these efforts.

House Hearing Documents Labor Shortages; Greenspan Once Again Affirms Immigration As A Solution

A mid-February hearing by a key House committee documented that severe “essential” (entry level, unskilled and semi-skilled) workers shortages are affecting virtually every sector of the economy. Three economists specializing in demographic and labor force issues testified before the House Oversight and Investigations Subcommittee of the House Education and Workforce Committee, chaired by Representative Pete Hoekstra (R-MI), about the reasons for the labor shortage. Representatives from the hotel, manufacturing, and healthcare industries related dire tales of the impact worker shortages will have on our continued economic growth.

Several of the corporate representatives and two of the economists said that increased immigration is part of the solution. Representative Cass Ballenger (R-NC), a member of the full Committee who told of his own business experiences in hiring immigrants, echoed the view that immigrants could help solve the problem of essential worker shortages. Representative Ballenger also seemed to endorse an AFL-CIO initiative (reviewed in this issue of Connect!) that, for the first time, supports legalizing the status of undocumented workers and opposes employer sanctions.

At the same time the House Oversight and Investigations Subcommittee was meeting, Federal Reserve Chairman Alan Greenspan was testifying before the House Banking Committee on economic growth. During his testimony, Chairman Greenspan reaffirmed his view that immigration will help solve the continuing and severe worker shortage. Chairman Greenspan said: “Imbalances in labor markets perhaps may have even more serious implications for inflation pressures. While the pool of official unemployed and those otherwise willing to work may continue to shrink, as it has persistently over the past seven years, there is an effective limit to new hiring, unless immigration is uncapped. At some point in the continuous reduction in the number of available workers willing to take jobs, short of the repeal of the law of supply and demand, wage increases must rise above even impressive gains in productivity. This would intensify inflationary pressures or squeeze profit margins, with either outcome capable of bringing our growing prosperity to an end.”

The February 24, 2000 Washington Times reported on Chairman Greenspan’s subsequent testimony before that Senate Banking Committee, at which he endorsed S. 2045, the Hatch H-1B bill (see article above), and cited the nationwide labor shortage as the greatest threat to the record-long economic expansion we have enjoyed. “The benefits of bringing in people to do the work here, rather than doing the work elsewhere, to me, should be pretty self-evident,” he said.

The House subcommittee’s hearing represents an important step in educating Members of Congress about the issues facing employers of essential workers. As reported in previous issues of Connect!, a coalition of business associations has formed in Washington, D.C. to seek revisions to the immigration laws as a partial solution to the tight labor markets. The Essential Worker Immigration Coalition (EWIC) has sent two letters to Congress regarding these issues and participated in this House Hearing. Members of Congress need to hear from employers in their districts experiencing from labor shortages, encouraging them to support efforts to address solutions. Please contact your immigration lawyer for more information about this coalition.

Notwithstanding a January blizzard that closed down most of Washington, DC, including the Federal Government, Representative Lamar Smith (R-TX), Chairman of the House Immigration Subcommittee, held a January 26^th hearing, “Terrorist Threats to the U.S.” Intended to focus on security issues on the northern border following the December arrest of suspected Algerian Terrorist Ahmad Ressam in Washington State, the hearing was colloquially referred to by one attendee as “Bash Canada Day.”

Witnesses included Canadian security officials and various self-described terrorism experts and private security consultants. While some witnesses testified that lax Canadian immigration laws and internal security allow the country to harbor terrorist organizations that pose a threat to the United States, most emphasized that the U.S. needs to address this issue by closely cooperating with Canadian law enforcement and security officials. One witness recommended the creation of a Binational Commission on North American Security to develop joint responses to the enemies that threaten both free nations.

Because neither the INS, Customs Service, nor any U.S. law enforcement agency testified, the hearing offered little information about the U.S. response to any real or perceived threat from Canada. Although in his opening statement Chairman Smith commented that an entry-exit control system would be a deterrent against terrorism, and a few witnesses agreed, at least one witness dismissed this idea. He stated that there is no evidence that a system such as Section 110 would have any substantial impact on the ability of terrorists to gain entry to this country. Chairman Smith declined to respond when questioned by a reporter after the hearing about whether he would push for faster implementation of Section 110.

Senator Spencer Abraham (R-MI), Chairman of the Senate Immigration Subcommittee, held a hearing on this issue in mid-February. Unlike the House hearing, which focused mostly on alleged lapses in the Canadian response to terrorist threats, the Senate hearing more usefully focused on recommendations from U.S. border enforcement agencies about U.S.-Canada cross-border cooperation, our ability to deter would-be terrorists at the borders and the resources needed to more securely patrol our borders. Witnesses from the INS, the U.S. Customs Service, front-line immigration inspectors, Border Patrol agents and the Customs agent who first detected Ressam at the Port Angeles (WA) border crossing, all testified about the high level of shared intelligence, cooperation and camaraderie between U.S. and Canadian law enforcement and border officials. All agreed that the best means to deter terrorism or other illegal entrants is to provide additional personnel and resources to our northern border stations. All of the witnesses, except the INS official, praised Chairman Abraham’s bill, S. 745. S. 745 includes provisions that would increase both personnel and resources for the agencies at the border. One immigration inspector witness stated that the other half of the bill (which would repeal Section 110) was important since “the implementation of Section 110 would do absolutely nothing to combat alien smuggling. We need more staff, better equipment, better training, and better facilities, not more ill-conceived missions of questionable value.”

These hearings reinforce the need for members of the business community to continue to support repeal of Section 110 as bad for business, bad for immigration enforcement, and bad for our economy and urge Members of Congress to co-sponsor H.R. 1650 and S. 725.

The President every February transmits to Congress the Administration’s requested budget for the following fiscal year. For the business immigration community, this budget indicates proposed policy decisions of the federal agencies that administer immigration laws: the Immigration and Naturalization Service (INS), the Department of Labor (DOL) and the Department of State. The work of the House and Senate Appropriations Committees also provides an opportunity for business immigration advocates to affect the way in which these agencies do business, by informing Members of Congress of their problems and concerns. We here focus on the INS’s proposed budget. In the next issue we will examine the budget for DOL and the State Department.

President Clinton’s FY2001 INS budget includes a request to create a new $127 million Immigration Services Capital Investment Account (ISCIA) which is to be used for several purposes, including supporting service-related infrastructure improvements and backlog reductions in petition processing (both family and employment-based). About $35 million of the ISCIA would be funded through direct appropriations from Congress, with the balance coming from two new proposed fees: re-authorization of the Section 245(i) program (which charges applicants $1000 to adjust their status in the United States) and a $1,000-per-application Premium Service Fee for business filings.

Section 245(i), a section of immigration law in place from 1994-1997, allowed immigrants on the brink of becoming permanent residents to apply for their green cards in the US, rather than returning to their home countries to apply. Congress allowed Section 245(i) to expire in November 1997, although it “grandfathered” immigrants already waiting for adjustment of status. Businesses strongly supported a permanent extension of Section 245(i) in 1997, since it enabled their employees to remain in the United States and work while adjusting status rather than spending months abroad. H.R. 1841, introduced last year by Representatives Luis Gutierrez (D-IL) and Connie Morella (R-MD), would fully restore Section 245(i).

The Administration has provided few details about the second funding source for the ISCIA, the proposed Premium Service Fee for business filings. INS officials have indicated that for a fee of $1000 per filing, it would provide businesses with guaranteed processing within 15 days. INS estimates that the new fee would generate $55 million in revenue; a portion would be dedicated to guaranteeing the premium service, with any fees received above the actual cost of the guaranteed processing program used for deterring benefit fraud and supporting the infrastructure for other adjudications, including hiring additional examiners and updating computer systems.

Employer groups have greeted this premium processing fee proposal with some skepticism. Although pleased that the Administration and INS acknowledge there is a need to address the tremendous backlog, serious concerns remain. First and foremost is the lack of a track record by the INS in speedy processing. Although INS states that it will develop and publish “standards” for non-premium processing, officials acknowledge that there is no mechanism for enforcing these standards, and that unfunded mandates from Congress (such as temporary protected status programs, mandatory process audits, etc.) would certainly present problems for maintaining these standards. If recent history (i.e.; INS efforts to reduce the naturalization backlog from an average of 14 months to an average of 6 months which led to long backlogs in other adjudications) is any indication, the pay-for-premium service proposal could have the effect of halting the processing of all other adjudication applications.

INS has stated that the premium service would initially be available for all business nonimmigrant petitions (for H-1Bs, Os, Ps, Ls, Es, Qs and other temporary visas on Form I-129) and employment based immigrant visa petitions (I-140s). However, there is concern both within the INS and by interested parties, that applying the premium service to H-1B applications could violate the H-1B law, which mandates that H-1B visas be issued strictly in the order in which they are filed. INS has stated that its general counsel is looking into the issue. INS also has indicated that it is exploring a “pre-certification system” for larger employers that have a good “track record” of approved petitions. One INS official has stated that precertification will not be required for premium processing eligibility initially, but that it is being considered. However, the same official has acknowledged that such a system could have an adverse impact on small start-up companies.

Other features of the INS FY2001 budget include: increasing funding for both personnel and equipment for the Border Patrol, adding new immigration inspectors at land borders and airports, increased funding for enforcement and removal of criminal aliens, and $10.1 million to “improve personnel management and accountability and to increase support staff.”

Employers and business immigration advocates can advocate for improved business immigration processes within the INS by working with their Representatives and Senators as well as members of the Congressional Appropriations committees. Please contact your immigration lawyer about how to advocate in the appropriations process.

AFL-CIO Endorses Amnesty and Opposes Employer Sanctions; Still Opposes Temporary Employee Visas

The AFL-CIO provided some good news and some bad news to business immigration advocates this month. As many business immigration advocates are aware, the AFL-CIO, and its member unions, lobbied Congress in the last two decades to reduce immigration levels and restrict business immigration, fearing the impact that foreign-born workers could have on the wages and working conditions of the U.S. labor force. Unions generally have opposed increases in the availability of employer-sponsored immigrant visas and temporary visas, and have advocated for increased regulatory restrictions on employers of foreign-born workers. In 1985 and 1986, they lobbied Congress to impose employer sanctions against employers of undocumented workers – the current I-9 verification system.

At its annual mid-winter Executive Council meeting, the AFL-CIO reversed its position on some key aspects of immigration, noting the enormous contributions immigrants make to our economy and society. The labor federation backed calls for an end to employer sanctions and also endorsed some amnesty programs for current undocumented workers, and specifically those populations that have been granted long-term temporary protection in the United States, such as Central Americans. On the other hand, the AFL-CIO reiterated its opposition to extending or expanding temporary employee visa programs, alleging that they “depress wages and distort labor markets,” and have led to the “creation of a class of easily exploited workers who find themselves in a situation very similar to that faced by undocumented workers.” The AFL-CIO also called for reform in current temporary employment visas to include more rigorous labor market tests and the involvement of labor unions in the labor certification process.

While business advocates welcome the reversal on employer sanctions, and many employers of those who would benefit from a new amnesty program support that call as well, most are disappointed that the labor group continues to oppose nonimmigrant visa programs, which allow employers to meet labor shortage needs on a timely basis under a tightly regulated program.

The impact of the AFL-CIO’s new position on immigration programs remains to be seen. However, many in the business immigration community see opportunities for increased dialogue, and the possibility for cooperation on some areas of mutual concern.

In testimony before a House Panel, Dr. Richard Judy of the Hudson Institute highlighted several demographic trends that point to ever tightening job markets in the next decade, without immigration. Dr. Judy pointed to what he called a “worker dearth.” Here are some of the statistics:

Without changes in our immigration laws, the United States would face an absolute decline in our workforce in the next 20 years!