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Statement of Chairman Lamar Smith

House Judiciary Committee Subcommittee on Immigration and Claims

Oversight Hearing on the Status of Regulations Implementing the American Competitiveness and Workforce Improvement Act of 1998

May 25, 2000

The American Competitiveness and Workforce Improvement Act of 1998 increased the annual quota of H-1B temporary visas for foreign professional workers while it also protected American workers from those employers who abuse the program to the detriment of American workers. The Act represented a negotiated compromise that balanced these two interests.

The Act placed new requirements on "job shops", employers who bring in large numbers of aliens under the H-1B program and contract them out to other employers, often at substandard wages. Some job shops actually use the program to replace American workers with foreign workers.

The Act responded to these practices by prohibiting job shops or the employers to whom they contract H-1B aliens from laying off American workers and replacing them with foreign workers. And the Act required job shops to take steps to recruit American workers before hiring from other countries.

Eighteen months have passed since the 1998 Act was signed by President Clinton. Yet job shops can continue to bring in foreign workers to replace laid-off American workers and can continue to ignore American job applicants. Why? Because the Administration has never issued regulations implementing crucial protections for American workers.

The Labor Department issued proposed regulations in January of 1999, but the White House has yet to approve the final regulations.

This non-action by the Clinton Administration creates the impression that it doesnít care about American workers, that it doesnít care if American workers are fired and replaced with foreign workers, that it doesnít care if employers ignore qualified American workers.

This impression is only heightened by the White Houseís own H-1B proposal. President Clinton proposed that the H-1B cap almost be doubled to 200,000 per year but did not include a single safeguard for American workers, not a single word addressing lost jobs and depressed wages.

In addition, the proposed bill contained no anti-fraud provisions, despite the INSís assurances that it wanted to combat massive fraud in the H-1B program.

Public opinion polls consistently show that most Americans do not want the H-1B program expanded. A poll by the Wall Street Journal and NBC News found that only 20 percent of Americans supported an increase in American high-tech workers, 80 percent were opposed.

Clearly, we need some balance to ensure that the H-1B program does more good than harm. We owe that to the American people. And we need to start by ensuring that the protections for American workers enacted two years ago are enforced.

I hope today to hear that the regulations will be implemented immediately and that the White House will no longer turn its back on American workers.




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