Date: Sun, 19 Sep 2004 23:22:08 -0700 From: Norm Matloff To: Norm Matloff Subject: ITAA issues marching orders to Congress, including the Democrats To: H-1B/L-1/offshoring e-newsletter Main points in this posting: 1. Surprisingly frank memo from the industry lobbying group ITAA to Congress regarding H-1B and offshoring. 2. The U.S. Senate is on the verge of acting on an earlier proposal, dormant until now, to expand the H-1B program by introducing a major exemption to the yearly H-1B cap. 3. The support for that Senate legislation is strongly bipartisan, a huge contrast to the Democratic Party's "save American jobs stance." There is a highly remarkable memo on the ITAA's Web site, at http://www.itaa.org/govt/docs/mustdocongressfinal2004.pdf It is dated September 7, 2004, addressed to "Members of Congress," from "Harris Miller, President, ITAA." The title at the top of the document body says it all: Legislative Must Do's In other words, the ITAA is basically telling Congress, "If you want our campaign contributions, you better enact this stuff, no questions asked." One portion of the memo is especially revealing. Recall that Rep. Lamar Smith (R.-Texas) introduced a bill earlier this year which would exempt from the H-1B cap any foreign national who has a Master's or PhD from a U.S. university. As I explained at the time, such an exemption would be unwarranted (http://heather.cs.ucdavis.edu/Archive/GradDegrees.txt). It merely is an excuse to get more H-1Bs. What is fascinating about this memo is that the ITAA *admits* that it is merely an excuse to get more H-1Bs: ITAA believes that graduates of U.S. universities who have earned a master's or higher degree from an institution of higher education (as defined in section 101(a) of the Higher Education Act) should be exempt from the numerical restrictions on H-1B visas, without limitation. Early indications from DHS are that the H-1B cap for FY 2005 will be hit before December, if not earlier. This shortage seriously restricts the ability of US businesses to vie for the best talent and hurts their long-term competitiveness in the United States and global markets. This is a simple step consistent with the goals of the country as well as the needs of the economy. This is in stark contrast to what the industry lobbyists say to the public, which is typically along the lines of "50% of PhDs in engineering granted by U.S. universities go to foreign students. We need people with these degrees, and since American students aren't pursuing these degrees, we must hire the foreign students." Again, go to http://heather.cs.ucdavis.edu/Archive/GradDegrees.txt to see why this argument is invalid, but the point here is that in this relatively private setting the ITAA doesn't bother to make such an argument; it simply says, in essence, "We want more H-1Bs, and this is a means to get more while maintaining the fiction of a low cap." Many of you will recall that a number of bills regarding the H-1B and L-1 work visa programs have been introduced in the current Congress. Some of them have some merit, some don't, but the key point to keep in mind is that introduction of bill means nothing. It is often done for symbolic reasons, i.e. "for show," and sometimes in a "This probably will go nowhere, but let's give it a try just on the off chance that it might work" vein. The real test comes when some of the heavyweights start backing a bill. Two bills introduced in this Congress which have suddenly come to life are H.R. 4166, which is the Smith bill mentioned above which would add the exemption to the H-1B cap, and S. 1635, a bill by Sen. Chambliss (R.-Ga.) which would "reform" the L-1 visa. As I reported before (http://heather.cs.ucdavis.edu/Archive/Chambliss.txt), the Chambliss bill is no better than the Smith one, but in any case, the point is that up until now, both bills have been dormant. That situation has now changed radically. According to Mike Gildea of the Department of Professional Employees, which is the technology component of the AFL-CIO, key Senate members are currently pushing to (a) revive the Chambliss bill and (b) incorporate the Smith proposal into a revised version of the Chambliss bill. Moreover, it appears likely that that new Chambliss bill will be in turn incorporated--read "buried so no one will notice it"--into some huge, unrelated bill, such as the Homeland Security Appropriations Bill. Those involved in forming the bill include Republican Senators Chambliss, Hatch, Grassley and Democrats Kennedy and Leahy. These are all members of the key Judiciary Committee, and of course Senators Hatch and Kennedy are extremely powerful in their respective parties. In other words, what I am saying is that without strong opposition from the public, we are sure to get a major H-1B increase. Now, how can it be that someone like Sen. Kennedy, "Mr. Democratic Party," is supporting this bill? As we all know, the official stance of the Democratic Party is to oppose the shipping of American jobs to foreign workers offshore, and presumably that would also mean opposing the shipping of American jobs to foreign workers ON-shore, i.e. H-1Bs. The Democratic Party has presented this theme as one of the major differences between itself and the Republicans. Sen. Kennedy himself has been quite critical of the H-1B program at various times in the past. Indeed, if asked, Sen. Kennedy's office would probably claim that he is only working to "mitigate" the bad effects of the revised Chambliss bill. But don't believe that for a second. Kennedy has usually caved in the end, voting for expansion of the H-1B program. And much more importantly, the point is that the Democrats are just as beholden to the industry's campaign contributions as are the Republicans, and in fact the Democratic Party is now, and has always been, just as pro-H-1B as the Republicans. See http://heather.cs.ucdavis.edu/Archive/DemocraticParty.txt for a detailed analysis of a recent report produced by the Progressive Policy Institute (PPI), a Democratic Party think tank. Among other things, the report endorses the Smith proposal (the one which would create a new major exemption in the H-1B cap, thus greatly expanding the number of visas which can be issued each year). I have written a detailed analysis of John Kerry's support (yes, that is SUPPORT) for offshoring and the H-1B program, at http://heather.cs.ucdavis.edu/Archive/Kerry.txt Two reasonable (though very restrained) H-1B/L-1 reform bills have been introduced by Democrats in the current Congress: H.R. 2702, by Rep. DeLauro (D.-Conn.) and S. 1452, by Sen. Dodd (D.-Conn.). Yet the DeLauro bill has attracted only a handful of cosponsors, and the Dodd bill none at all. The Democratic Party standard bearer, John Kerry, has not signed on as a cosponsor, nor has he endorsed either of the bills in any way, nor has John Edwards, nor has any top Democrat. On the contrary, Joseph Lieberman, the Democratic Vice Presidential candidate in 2000 (and a candidate for president in this year's Democratic primaries) wrote in a letter to the U.S. India Political Action Committee earlier this year: I also oppose any efforts to eliminate or diminish the H1-B visa program. (See http://heather.cs.ucdavis.edu/Lieberman.txt) Sen. Hillary Clinton, widely assumed to be a strong contender for the Democratic Party's presidential candidacy in 2008 if Kerry loses this year, has been quite open about her close ties to Tata Consultancy Services, the Indian software giant which is a heavy user of H-1Bs. (See the files with names beginning with "Hillary" in http://heather.cs.ucdavis.edu/Archive) What apparently is still not known is how Sen. Feinstein (D.-Ca.) will vote on this bill. She too is a member of the Judiciary Committee, so when I say "vote" I mean her vote when the bill is marked up in the committee. Though at times she has shown some sympathy to critics of the H-1B and L-1 programs, my prediction is that she will support the bill, and that she will defend her support on the grounds that the U.S. educational system needs to be improved (a "traditional" excuse politicians have given for supporting expansion of the H-1B program). By the way, when I made that posting on the PPI report above, the report's author objected to my statement that the portion of the report which endorsed the Smith proposal "might as well have been written by industry lobbyists (and may well have been)." Well, the fact is that the report did indeed use the same wording that the industry lobbyists use, and I asked the author who, if not industry lobbyists, was informing this part of his analysis. He didn't reply, but an answer later surfaced when Kim Berry of the Programmers Guild pointed me to an earlier report written by the same author, at http://www.ppionline.org/ndol/print.cfm?contentid=250572 That earlier report, which was largely on H-1B (and the issue of training, a red herring as I have explained before), was the product of an advisory committee to PPI, described as follows: The Progressive Policy Institute has formed a New Economy Task Force made up of leading members of Congress and New Economy entrepreneurs to foster a meaningful two-way dialogue about the challenges of public and private governance in the New Economy, to jointly develop principles and policy priorities for rethinking government policy in the Information Age, and to work to build a new consensus for political change consistent with these aims. A list of the members followed, and it turned out that the "leading members of Congress" were all people who had been strong promoters of H-1B, and it goes without saying that the "New Economy entrepreneurs" were strongly H-1B too. I think it's a safe bet that the answer to my question as to who advised the PPI on its current support of the Smith proposal can be seen right there--"leading members of Congress and New Economy entrepreneurs." Norm