FAQ: Why Obama may back an H-1B increase even in a recession

If the president-elect moves quickly to boost basic research funding, the visa issue will be part of the debate

President-Elect Barack Obama has supported the H-1B visa program and wants to make changes to green cards that would help tech firms. There wasn't much said about this issue during the presidential campaign, especially after Wall Street collapsed. It also never came up in the debates between Obama and Republican John McCain. Now we're in a recession and unemployment is rising. Can Obama push ahead on tech-related immigration issues at this time? He might, and in this FAQ, here's an explanation of how that might happen.

Does Obama support the H-1B visa program? Obama supports the temporary visa program but also wants it reformed. It needs reform. A U.S. Citizenship and Immigration Services report released in October said as many as one in five visa applications are either fraudulent or flawed. Some of the problems were egregious, including H-1B visas approved to shell companies.

If that weren't enough, the U.S. Department of Labor added to the evidence of abuse, including a settlement last month requiring a Virginia-based company that also operates an offshore center in India to pay $1.7 million to 343 employees. Obama says he wants to "hold accountable employers who abuse the system and their workers," (PDF Page 8 on Obama's tech platform under the section titled: Reform Immigration ).

Will Obama increase the H-1B cap? Obama supports raising the H-1B cap and did so in the U.S. Senate immigration bill in 2007. It would have increased the current 85,000 cap, which includes 20,000 visas set aside for graduates with advanced degrees. The Senate effort, which died in the House, would have allowed increases of up to 180,000 H-1B visas, as well as additional visas for advanced-degree graduates. Obama also continues to support comprehensive immigration reform.

Excuse me, but how can Obama support increasing H-1B visas during a recession? Good question. Tech companies are cutting employees and the recession isn't stopping offshore outsourcing. The largest users of the H-1B visa are India offshore companies. When a U.S. company hires an outsourcing vendor, U.S. workers may be required -- if they want their severance -- to train their H-1B holding replacements. Moreover, offshoring is increasingly being aimed at higher-level jobs.

Obama has pledged "to stop giving tax breaks to companies that ship jobs overseas," but he hasn't linked the H-1B visa to this issue. Indian offshore firms are worried he may do so.

Why not increase green cards instead? Last May, U.S. Rep. Zoe Lofgren (D-Calif.) tried to bypass the immigration deadlock by introducing several bills to clear a direct path to permanent residency -- green cards to foreign students who graduate from U.S. universities with advanced degrees. Congress isn't expected to act on those bills during the upcoming lame-duck session.

The tech industry argues that restrictions on the green card are as much of a problem as the H-1B visa issue. Easing access to green cards is an issue Obama supports. "We should allow immigrants who earn their degrees in the U.S. to stay, work and become Americans over time. And we should examine our ability to increase the number of permanent visas we issue to foreign-skilled workers," he said in his platform.

Isn't increasing H-1B visas and permanent residency green cards a nonstarter of an issue during a recession? No. In fact, the visa issue may reappear with a vengeance, and here's why. Obama wants to double basic research spending over 10 years, and a lot of that money will fund research at U.S. universities that enroll thousands of foreign students.

In the fall of 2007, of the approximately 112,559 students enrolled in U.S. engineering graduate programs, IT related and otherwise, 50% were non-U.S. citizens, according to the Council of Graduate Schools, in a report released in September (Report PDF ). Visa proponents argue that it makes little sense to improve basic research at universities only to force graduate students back to their home countries.

Basic research is a cornerstone of Obama's tech and energy policy, and the polar opposite of the Bush administration, which actually cut basic federal research funding. (See this chart by the National Science Foundation.) If Obama can find the money to increase basic research, then the issue of keeping foreign students in the U.S., especially those students who work on government-funded research projects, brings these two issues together.

Some tech lobbyists believe that increases in H-1B visas and green cards won't happen as long as U.S. companies are cutting jobs. But that will mean the debate will shift as well. "What do we need to do to ensure that we can grow our way out of this [downturn], innovate our way out this? You can't have that discussion without talking about immigration," said Robert Hoffman, vice president of congressional and legislative affairs at Oracle Corp., and co-chairman of Compete America, a lobbying group that supports raising the H-1B visa cap.

Isn't this just too hot of a political issue for Congress and Obama? Opponents argue that the visa policies are partly to blame for declining computer science enrollments by Americans. Because the H-1B program offers the prospect of employment after graduation, it encourages foreign students to enroll, and those large enrollments are discouraging U.S. students from entering IT-related fields.

This argument may rise again during the next debate on the visa issue, but it's not new and it's not an argument that finds support in Obama's platform. The bottom line is this: Obama has said nothing during the campaign that rules out either H-1B or green card increases. If anything, his tech platform, especially his plan to boost research funding, offers an argument for encouraging foreign enrollments and increasing access to visas.

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