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July 2013, Volume 20, Number 3

Senate Approves S 744

A bipartisan group of eight senators introduced the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 (S 744) in April 2013. The Senate Judiciary Committee sent the bill to the full Senate on a 13-5 vote in May 2013, after Democrats agreed to slightly loosen restrictions on H-1B visas and not to offer immigration visas to foreign same-sex partners of US citizens.

President Obama called S 744 "largely consistent with the principles of common-sense reform I have proposed." He added that S 744 "meets the challenge of fixing our broken immigration system," and repeated his endorsement of S 744 as the Senate voted to proceed with debate on the bill in mid-June.

The Senate in June 2013 voted 68-32 to approve S 744, with support from all Democrats and 14 Republicans. The Senate in May 2006 approved the similar Comprehensive Immigration Reform Act (S 2611) on a 62-36 vote.

S 744. The most comprehensive immigration reform bill since the Immigration Reform and Control Act of 1986, S 744, has three key elements: (1) more fences and agents on the Mexico-US border and a requirement that all employers use DHS's E-Verify system to check the legal status of new hires; (2) a 13-year path to US citizenship for unauthorized foreigners who arrived in the US before December 31, 2011 and remained "continuously since" their arrival; and (3) new guest worker programs for low-skilled farm and nonfarm workers and significant increases in the number of H-1B visas available to foreigners with college degrees coming to the US to fill jobs that require such degrees.

S 744 would also change the mix of legal immigrants. Today, 70 percent of immigrants receive so-called "green cards" or immigrant visas because family members already in the US sponsor their admission. S 744 would add 120,000 immigrant visas a year issued on merit or economic grounds and eliminate some family visas, which would raise the economic share of immigrants. S 744 aims to be revenue neutral, with fines and fees covering what one estimate said would be $17 billion in additional federal spending over the bill's first decade.

Enforcement. S 744 authorizes up to $6.5 billion in additional spending to "secure" the 2,000-mile Mexico-US border. The border will be considered secure if 100 percent of the border is under surveillance and 90 percent of those attempting to cross illegally are apprehended. Some called the 90 percent metric "political" because we know only how many foreigners are apprehended, not how many who illegally enter the US.

Before the full Senate vote in June 2013, the so-called Hoeven-Corker enforcement amendment calling for a "border surge" was approved to win Republican support without making legalization contingent on a trigger such as a 90 percent apprehension rate. The amendment would almost double the number of Border Patrol agents from 21,000 to 40,000 and the amount of fencing on the Mexico-US border from 350 to 700 miles, and require that these enforcement steps are completed before any unauthorized foreigners receive immigrant status.

Within five years of enactment, all employers would have to check new hires using the E-Verify system. Employers with more than 5,000 employees would have to use E-Verify within two years of enactment, those with more than 500 employees within three years, and all others a year later. Employers would not have to check current employees.

In June 2013, some 411,000 employers participated in E-Verify. Over 99.7 percent of the 20.2 million new hires submitted in FY12 were found to be work-eligible within seconds, 221,000 unauthorized workers were detected, and about 52,000 were deemed work-eligible after an initial tentative non-confirmation. The estimated 7.3 million US employers hire 50 to 60 million workers a year.

When hired, non-US citizens would have to show employers a "biometric work authorization card" or immigrant visa that includes a photo stored in the E-Verify system and is available to the employer. In states that provide driver's license photos to E-Verify, new hires could present driver's licenses. Individuals would have the power to "lock" their Social Security numbers (SSNs) in the E-Verify system so that others cannot use them, and DHS would gain the power to investigate improper use of SSNs.

DHS has had access to the photos of the 113 million Americans with passports since 2010. There are 212 million driver's licenses, and civil libertarians fear that under a mandatory E-Verify system they would become de facto national IDs.

The US deports (formally removes) over 1,000 foreigners a day, mostly Mexicans convicted of US crimes. Migrant activists and unions in May 2013 called on the Obama administration to suspend deportations of foreigners who could apply for legalization under S 744.

Legalization. After DHS submits a plan to secure the Mexico-US border, expected within six months of enactment of S 744, qualifying unauthorized foreigners in the US before December 31, 2011 could pay $500, any back taxes they owed, and application fees to become "registered provisional immigrants" for six years. This RPI status could be renewed after six years for another $500 fee. Unauthorized foreigners would have two years after S 744 is enacted to apply for RPI status. Foreigners with RPI status could enlist in the military.

After 10 years, if enforcement indicators demonstrate that unauthorized migration is "under control" and the backlog of foreigners waiting for immigrant visas is eliminated, RPIs could apply for regular immigrant status by showing they have worked (or were enrolled in school) and had lived in the US since registering. They would have to pay another $1,000 fee and pass a test of English and civics. After three more years, these now-regular immigrants could apply for US citizenship.

RPIs could also apply for one of the 120,000 merit-based immigration visas described below if they obtained sufficient points.

Provisional RPIs would not be eligible for most federal welfare benefits, including Food Stamps and subsidized health insurance under the Affordable Care Act. RPIs could purchase health insurance on the state exchanges that will begin operation in 2014, but could not receive federal subsidies. Unauthorized foreigners are not eligible to purchase health insurance on the exchanges, and do not face fines for failure to have health insurance.

It is not clear whether RPIs would be eligible for the Earned Income Tax Credit, which can result in government payments to low earners.

There is a separate legalization program for unauthorized farm workers that provides a faster path to immigrant status. Unauthorized farm workers who did at least 100 days or 575 hours of US farm work in the 24 months ending December 31, 2012 could become RPIs and receive blue or agricultural cards by paying an application fee and a $100 fine under a program that would operate for a year after implementing regulations were issued. The spouses and children of RPI farm workers could also register and receive permission to live and work in the US in any job (not just farm jobs).

In order to become immigrants, agricultural RPIs would have to do at least 150 days of farm work a year for three years in the eight years after enactment of S 744 (even if the RPI did the qualifying farm work in the first three years, immigrant visas would be issued only after five years) or 100 days of farm work a year in five of the first eight years after enactment. To become immigrants, agricultural RPIs would have to pay an application fee and a $400 fine, and the family members of RPIs could apply for immigrant visas when the farm worker does.

Guest Workers. The US now has three major guest worker programs. The H-1B program admits about 130,000 foreigners a year with a college degree who enter the US to fill a US job that requires a college degree; about half of H-1B visa holders are employed in IT services. The H-2A program admits 60,000 foreign farm workers a year to fill seasonal farm jobs after the US the Department of Labor agrees with farm employers that US workers are not available, and the H-2B program admits up to 66,000 foreign workers a year to fill seasonal nonfarm jobs.

Under S 744, more H-1B visas would be made available and there would be new guest worker programs for farm and nonfarm workers. The number of regular H-1B visas would increase from the current 65,000 a year to 110,000, and the number of visas for foreigners who earn advanced degrees from US universities would increase from 20,000 to 25,000. A High Skilled Jobs Demand Index could allow the number of H-1B visas to rise by 10,000 a year to a maximum 180,000, and H-1B workers sponsored by their US employers for immigrant visas would not be counted against the quota.

In an attempt to satisfy critics who allege that the H-1B program allows US employers to depress wages, S 744 as originally introduced would have required all employers of H-1B workers to try to recruit US workers for at least 30 days before hiring H-1B workers. Employers would have had to post job openings on a web site and certify that they did not lay off US workers to open jobs for H-1Bs and pay "significantly higher wages" to H-1B workers than currently. During markup, however, the Senate Judiciary Committee accepted amendments that would exempt most employers from these try-to-find-US-workers requirements, and rejected amendments that would have required DOL to audit at least one percent of H-1B employers each year.

Under S 744, spouses of H-1B workers could work in the US if their country of origin provides reciprocal treatment to the spouses of US workers.

Employers considered to be "H-1B dependent," that is, having at least 15 percent H-1B employees, would have to pay higher wages and fees and could be prohibited from hiring additional foreigners with H-1B or L-1 visas. Under S 744, firms with more than 30 percent of their US workers on temporary visas would have to pay $5,000 for each new temporary foreign worker, and those with more than 50 percent foreign workers would not be able to request any more H-1B visas beginning in 2017. This so-called 50-50 rule is a blow to India-based outsourcers.

The New York Times reported on May 5, 2013 that Silicon Valley leaders urged the Gang of Eight to make it harder for Indian outsourcers to bring H-1B workers into the US, but opposed provisions that require employers to certify they did not lay off US workers to hire H-1B workers.

The major guest worker program for low-skilled nonfarm workers is the H-2B program, which admits up to 66,000 foreigners a year to fill seasonal nonfarm jobs. An amendment by Senator Jeff Merkley (D-OR) in June 2013 requires employers who seek H-2B foreigners to fill forestry jobs to first try to recruit US workers and for state workforce agencies to report to DOL on these recruitment efforts. Merkley said no US workers were hired on $7 million worth of reforestry contracts in Oregon.

A new W-visa program would admit more low-skilled workers, with the number eventually determined by a Bureau of Immigration and Labor Market Research located in USCIS with a $20 million budget. Fees paid by W-visa workers would support the Bureau, which would be charged with determining the annual change to the W-visa cap, supplementing the recruitment methods employers use to attract guest workers, creating a methodology to designate "shortage occupations," and making recommendations on employment-based visa programs.

In order to hire W-visa workers, US employers in metro areas with an unemployment rate of less than 8.5 percent would register themselves and their jobs and request specific foreigners to receive W-visas. Foreigners' families could also receive W-visas, which would be valid for three years. The number of W-visas would rise to 35,000 in the second year, 55,000 in the third year, and 75,000 in the fourth year, and the number could rise further if certain conditions are met. No more than a third of W-visa holders can be employed in construction.

During markup, there were efforts to raise the initial number of low-skilled W-visas to 200,000 and remove the limit on W-visa holders in construction.

W-visa holders could move among registered employers, and employers would be prohibited from retaliating against workers who complain about possible violations of the law. Employers must pay W-visa workers the higher of the wage paid to other employees with similar experience and qualifications or the prevailing wage.

The current H-2A program would be phased out and replaced by a new program that initially offered 122,333 three-year visas a year for the first three years. After five years, USDA would determine the number of farm worker visas to issue based on "market conditions." There would be two types of farm worker visas. W-2 visas would be similar to current H-2A visas, tying foreign workers to a particular farm employer. W-3 visas would allow foreigners to "float" from one US farm employer to another for three years, with W-3 visa holders losing their legal status if they are unemployed more than 60 days.

Legal Immigration. Legal immigration would likely rise by at least 50 percent under S 744, from a million a year to 1.5 million a year or more. To limit the increase in immigration, the 40,000 visas a year for adult brothers and sisters of US citizens and the 55,000 visas a year available for diversity immigrants in an annual lottery would be eliminated. Adult sons and daughters of US citizens can receive immigrant visas, but under the bill they must be under 31 to qualify.

There would be no caps on some types of employment-based immigrant visas, including immigrants with extraordinary ability in the sciences, arts, education, business or athletics; outstanding professors and researchers; multinational executives and managers; doctoral degree holders in any field; and certain physicians.

Currently, 140,000 employment-based immigrant visas a year are available. Most go to foreigners (and their families) sponsored by US employers. There is a backlog of 234,000 applications pending, and S 744 would increase the availability of visas by exempting spouses and children from the 140,000 annual cap, effectively adding 80,000 visas a year.

Five years after S 744 is enacted, a new merit- or points-based system would issue 120,000 immigrant visas to foreigners who have particular skills and education (during the first five years, merit-based immigrant visas would be used to reduce the current backlogs in the employment- and family-based immigration systems). After five years, half of the new immigrant visas would go to the Tier 1 candidates who received the most points for education, work experience and a US job offer, and half would go to Tier 2 candidates who are caregivers, "exceptional" employees, and have immediate relatives in the United States.

For example, Tier 1 foreigners could receive 15 points if they had a PhD, 10 points if they had a US job offer, and 10 points for speaking and writing English fluently; they could receive two points for each year that they were lawfully in the US. The number of merit-based immigration visas could rise to 250,000 if demand exceeds supply and the US unemployment rate is below 8.5 percent.

The so-called EB-5 immigrant investor program, which grants probationary immigrant visas to foreigners who invest at least $500,000 in projects that create or preserve at least 10 jobs, would be made permanent under S 744.

Hearings. The Senate Judiciary Committee held three hearings on S 744 in April 2013. Democrats warned that border security "triggers" could "trap" RPIs in a status between unauthorized and immigrant, while Republicans recalled that the Immigration Reform and Control Act of 1986 had the unintended consequence of increasing illegal immigration, and that S 744 could have similar unintended consequences.

Senator Charles Grassley (R-IA) said that the bombs set off by two brothers born in Russia's Chechen Republic at the Boston Marathon on April 14, 2013 should encourage the Senate to look more closely at security when considering immigration reform. Supporters of S 744's legalization provisions countered that legalization would give the government more information on potential terrorists.

Witnesses testifying before the Judiciary Committee debated whether legalization would help or hurt low-skilled US workers. Most of the estimated eight million unauthorized workers are low-skilled Mexicans. Some argued that legalization would increase their mobility in the US labor market and help to protect US workers, since employers would be unable to take advantage of their illegal status. Others argued that more mobile legalized workers would change jobs and put downward pressure on the wages of low-skilled US workers.

There was also debate over the new guest worker programs included in S 744. Some argued that US workers would be better protected by provisions that require all employers of H-1B workers to first try to recruit US workers, while others argued that increasing the supply of labor inevitably puts downward pressure on wages.

Senators Dianne Feinstein (D-CA) and Al Franken (D-MN) praised the agricultural provisions of S 744. Feinstein said that S 744 would provide "a consistent supply of agricultural workers for our farmers," while Franken welcomed provisions that allow dairy farms to hire guest workers.

During markup, Senator Richard Blumenthal (D-CT) added amendments to require foreign recruiters of workers headed to the US to register with DHS, and make US employers jointly liable for violations if they use unregistered foreign recruiters. US employers would have to report to DHS what they paid foreign recruiters. Foreign recruiters, for instance, would have to certify that they would not change workers' employment contracts without giving the workers at least 24 hours to review the changes and give their consent.

Reactions. The AFL-CIO and the US Chamber of Commerce released statements supporting S 744 as amended during markup, although both expressed hope that S 744 would be "improved" during full Senate consideration in June 2013. Most migrant advocates and media endorsed S 744, calling it the best hope to bring unauthorized foreigners out of the shadows and to use immigration to bolster the economy.

The Heritage Foundation released a report in May 2013 that estimated S 744 would result in a "lifetime fiscal deficit" of $6.3 trillion. Heritage estimated that newly legalized immigrants and their children would receive $9.4 trillion in government benefits and services and pay $3.1 trillion in taxes. Senator Marco Rubio (R-FL) countered that the Heritage estimates were flawed because poor immigrants will not remain poor after they are legalized. One of the authors of the Heritage report resigned after it was revealed that his PhD dissertation argued that immigrants' IQs should be considered in making immigration policy.

Unions representing 7,700 of the 20,000 DHS Immigration and Customs Enforcement employees opposed S 744 in May 2013. Salt Lake City based Chris Crane of the National├┐Immigration and Customs Enforcement├┐Council became the voice of many of those who deport or remove foreigners, and was joined by the National Citizenship and Immigration Services Council, which represents civil servants who issue immigration benefits.

The Wall Street Journal on April 22, 2013 highlighted some of the special provisions in S 744, such as the 20,000 additional visas for meat cutters and trimmers inserted by Senator Lindsey Graham (R-SC) for the state's broiler industry. Senator Michael Bennet (D-CO) won a provision that would shift foreign ski instructors from the H-2B program, which is capped at 66,000 a year, to the uncapped O-visa used by professional athletes who can stay in the US a decade or more.

S 744 would allow foreigners deported from the US to return if they had not committed serious crimes in the US and had a child, parent or spouse who was a US immigrant or citizen. The US deports about 400,000 foreigners a year, 70 percent to Mexico and half convicted of US crimes. Deportees charged with "illegal re-entry" for returning to the United States, the most prosecuted federal felony, could be allowed back into the US by DHS. It is usually very difficult for foreigners who are formally deported or removed to return legally.

Some countries won especially favorable provisions in S 744. Ireland and South Korea won H-1B type visas for their citizens and Canadians 55 and older who are not working in the US could stay in the US up to 240 days a year, up from the current 182 days. Under S 744, up to 10,500 Irish citizens who are high school graduates could enter the US to work, and there would be at least 5,000 "professional visas" for Koreans to accompany a free-trade agreement that went into effect in 2012.

CBO. The Congressional Budget Office in June 2013 projected that legalization would reduce the federal budget deficit by almost $200 billion between 2014 and 2023 by adding 10.4 million more foreign-born residents and six million more workers (10.4 million and six million more than would have been in the US in 2023 under current immigration law). The CBO projected that eight million unauthorized foreigners already in the US would become legal under S 744.

Over the 2014-23 decade, federal spending would rise by about $260 billion as more refundable tax credits were issued and the federal government spent more on health care for legal immigrants. The CBO projected that federal revenues would increase by $460 billion from the increased income and payroll taxes expected from more immigrants working and the higher wages that they would earn when they had legal status.

The CBO estimated that employers would spend $700 million a year to screen new hires with E-Verify and to pay higher fees for guest workers. CBO projected that average wages would decline 0.1 percent between 2014 and 2023, and the unemployment rate would be slightly higher due to legalization and other changes. Per capita income was projected to decrease slightly under S 744.

The CBO projected that S 744 as introduced would reduce illegal immigration by only 25 percent.