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Congress taps H-1B fees to pay for legislation

Patrick Thibodeau | Dec. 22, 2010
The H-1B and L-1 visa program is becoming an increasingly important source of money for Congress as it tries to pay for the cost of new legislation, including the pending 9/11 health bill.

FRAMINGHAM, 22 DECEMBER 2010 - The H-1B and L-1 visa program is becoming an increasingly important source of money for Congress as it tries to pay for the cost of new legislation, including the pending 9/11 health bill.

In August, Congress approved a $2,000 fee increase on H-1B visas and a $2,250 increase for L-1 visas for those firms that have more than 50% of their workers on the visa.

Most affected by this fee increase, set to expire in 2014, are Indian offshore firms that rely heavily on work visas to deliver services to U.S. customers.

Congress is now considering extending this visa fee increase through 2021 to help cover the cost of the 9/11 responders health care bill, which is now set at $6.2 billion.

In a joint statement this week, U.S. Senators Kirsten Gillibrand and Charles Schumer, both from New York, said the extension will continue "leveling the playing field between companies that follow the Congressional intent behind these visa programs and companies that use these visas to outsource American jobs."

Schumer, who championed the H-1b and L-1 fee increase to help pay for the $600 million border security bill, argued in August that it creates incentives to hire U.S. workers.

"Our bill will make it more expensive to bring in foreign tech workers to compete with American tech workers for jobs in America. That means these companies are going to have to start to hire U.S. tech workers again," Schumer said.

But the Congressional Budget Office (CBO) revenue estimates appear to say something else. If the fee increase provided an incentive to hire U.S. workers over foreign workers, then the revenue might show a decline over time.

But the CBO numbers show gradually rising revenue from the visas, not declining revenue. The CBO estimates also appear high, especially in the 9/11 bill, and difficult to explain.

The work visa fee increase raises broader questions as well. Will a need for visa fees to help pay for 9/11 health care and border security deter Congress from putting restrictions on the H-1B program for fear of cutting fee revenue?

Will the fee revenue encourage Congress to expand the H-1B visa program beyond its 85,000 cap? The L-1 visas, also subject to the fee increase, are used by multinational companies to move their foreign worker into the U.S.

The CBO has set some high revenue expectations for the fee. In the border security bill, the CBO estimated the visa fee increase will produce $133 million in 2011, gradually increasing to $143 million in 2014. When the CBO developed estimates for the 9/11 bill, its revenue forecast jump to $305 million in 2016 rising to $311 million in 2020.

 

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