Two House bills, each carrying some useful reforms and dealing separately with the H-1B (foreign worker) and EB-5 (immigrant investor) programs, stalled in mid-flight this week.
Both bills were scheduled for markup (detailed committee consideration) on Wednesday and both markups were postponed by the leadership of the House Judiciary Committee. As of this writing the markups have not yet been re-scheduled.
A postponed markup, or floor vote, usually means that the leadership is having trouble rounding up the votes needed to move along the proposed legislation; such delays sometimes lead to revisions in the proposed bills that are substantive enough to secure the needed backing. This probably is what is happening with these two bills, but there may be other factors as well.
EB-5. As we reported earlier this week, HR 5992 called for much more restricted use of investors' money in the future, targeting it to depressed areas, rural and urban. The language of the bill was such that one industry commentator wrote that it would effectively terminate the use of EB-5 moneys in downtown urban areas.
Critics of the program have long pointed out that too much of the EB-5 money was going into luxury real estate projects in glitzy downtown areas of New York, Los Angeles, Las Vegas, and Miami, when the intent of the original legislation was to use the aliens' money to prop up the economy in distressed locations. The authors of the reform bill, Judiciary Committee Chairman Bob Goodlatte (R-Va.), and ranking member John Conyers (D-Mich.), saw to it that the areas where these projects can be built, called Targeted Employment Areas (TEAs), were defined more narrowly.
While the TEA part of HR 5992 will alarm EB-5's influential supporters like Sens. Chuck Schumer (D-N.Y.) and John Cornyn (R-Texas), I suspect another provision in the bill will make them and their allies very happy. This is the requirement that will, retroactively in thousands of cases, raise the minimum investment from $500,000 to $800,000.
I have not seen this argued, but my sense is that this will be a windfall for the EB-5 middlemen; it will increase their take by 60 percent, at minimal cost to them.
On the other hand, if the retroactive element survives, this will mean that in some cases investors, not wanting or not being able to raise the extra $300,000, will wind up with second- or third-class investments and no visas. But it is the middlemen (most of them citizens) who have the influence, not the non-citizen investors.
H-1B. You might think that requiring a minimum wage of $100,000 for foreign workers in this program — as HR 5801 does, seemingly making the alien workers more expensive to employers who thus might choose instead to hire equally qualified U.S. workers — would be a sure winner with representatives of the U.S. workers.
There are two reasons for this: First, wages are pretty high by mid-America standards in Silicon Valley, and secondly, the professional group IEEE-USA has argued that the provision could be manipulated by the always-creative employers of H-1B workers to nullify its meaning.
According to the usually perceptive Patrick Thibodeau of Computer World:
A key concern for the IEEE-USA was in this section of the proposed law:
"The term 'exempt H-1B nonimmigrant' means an H-1B nonimmigrant who receives wages (including cash bonuses) at an annual rate equal to at least ... $100,000 ..."
The "including cash bonuses in parentheses" became for the IEEE-USA a giant alarm bell.
"Bonuses are usually conditional," said Russell Harrison, director of government relations at IEEE-USA. ...
A company could promise the visa worker a $60,000 salary and a $40,000 bonus provided those goals were reach[ed]. If that's what the bill allowed, Harrison said, then "it's nothing."
The Institute of Electrical and Electronic Engineers is not a union; it is a professional society including line engineers, their supervisors, deans of engineering schools, and other executives. Unlike the AFL-CIO, which has been playing a low-key role in recent years, IEEE-USA has not been a consistent opponent of the use of foreign engineers in American jobs. It has often called for the issuance of the green card for these workers, rather than the use of nonimmigrant visas.
For the take of my colleague, John Miano, on this bill see here.