S.1723, "The American Competitiveness Act," is intended to respond to a
reported skills shortage in the information technology industry by
increasing the annual cap on the number of temporary visas for foreign
"specialty" workers under the H-1B program. For the reasons outlined
below, the Administration strongly opposes Senate passage of S. 1723. If
S. 1723 were presented to the President, the Secretary of Labor would
recommend that the bill be vetoed.
Regrettably, S.1723 emphasizes providing opportunities for foreign workers
rather than providing opportunities for and protecting U.S. workers. The
bill's temporary increase in the annual number of H-1B visas is too large
(up to 115,000) and lasts too long (5 years). In addition, the bill does
not help ensure that U.S. workers do not lose their jobs to temporary
foreign workers. Nor does the bill ensure that employers have made serious
efforts to recruit U.S. workers for open positions so that qualified U.S.
workers have the opportunity to fill a job before a temporary foreign
worker is hired. Moreover, rather than strengthening program requirements
and enforcement to prevent employer abuses of the H-1B program, S.1723
undermines some of the program's important enforcement provisions.
Since 1993 the Administration has sought reforms of the H-1B program,
including: (1) requiring employers to make bona fide efforts to recruit
and retain U.S. workers before hiring temporary foreign workers; and (2)
prohibiting lay-offs of U.S. workers to replace them with foreign temporary
workers. These reforms, if enacted, would help target H-1B usage to
industries and employers that are experiencing skill shortages.
Also, the Administration believes that the first response for increasing
the availability of skilled workers for industry must be increasing the
skills of U.S. workers and helping the labor market work better to match
employers with U.S. workers. S.1723 includes an authorization for a
scholarship fund and a small fund to train dislocated workers, but it
provides no funding for these programs. The Administration believes that
increased training opportunities for U.S. workers should be funded, in
part, through a modest H-1B application fee paid by employers. In
addition, the Administration has called upon the private sector to
establish training programs and partnerships with educational institutions
to give U.S. workers the skills needed for these jobs. It also has urged
industry to reach out to dislocated workers as well as segments of the
labor force underrepresented in high skilled jobs. The Administration is
eager to work with industry to help create these programs and partnerships.
Additional efforts to increase the skill level of U.S. workers and needed
improvements in the H-1B program are necessary prerequisites for the
Administration to support any short-term increase in the number of H-1B
visas available for temporary foreign workers. The Administration wants to
work with the Congress to develop a bill that addresses the growing demand
for highly skilled workers, while effectively protecting and promoting the
interests of U.S. workers and enhancing the international competitiveness
of important U.S. industries.
S. 1723 would increase direct spending and receipts; therefore it is
subject to the pay-as-you-go requirement of the Omnibus Budget
Reconciliation Act (OBRA) of 1990. The bill does not contain provisions to
fully offset the increased direct spending. OMB's preliminary scoring
estimates that this bill would increase direct spending by $1 million
annually during FYs 1999-2003.