http://www.businessweek.com/stories/2007-05-18/a-troubled-immigration-reform-proposalbusinessweek-business-news-stock-market-and-financial-advice

A 'Troubled' Immigration Reform Proposal


President Bush and the Democrats reach a compromise on immigration reform

Now comes the hard part.

A bipartisan group of senators and Bush Administration officials gathered in the Capitol on May 17 to announce an 11th-hour meeting of minds on immigration reform. The proposed legislation, hammered out after months of closed-door negotiations, was unveiled with much fanfare and even a scripted endorsement from President George W. Bush. "This proposal delivers an immigration system that is secure, productive, orderly, and fair," he said. "I applaud the Senators who worked in the spirit of bipartisanship over the past months to address this issue, which is critically important to the American people."

But the work so far may be nothing compared with what lies ahead. While not all of the details of the compromise proposal have been made public, the general substance of the reform plan is already drawing fire from all sides. A spokesman for the AFL-CIO said the union was "troubled" by the temporary worker program. Conservative Republicans decried the idea that illegal immigrants could gain citizenship. Even leaders in the technology industry are concerned. One tech lobbyist said a complex point system for educated workers is "just a disaster."

A Path to Citizenship

The compromise may end up being little more than an opportunity for politicians to pose in front of television cameras. It is a step forward in terms of process, allowing debate to proceed in the Senate in the weeks ahead. But with critics pushing for so many changes in so many different directions, the proposal may do little to increase the odds of final legislation. "We are pleased that the process is moving forward," says Frank Sharry, executive director of the pro-immigrant National Immigration Forum. But there are "problematic elements in the package that could undermine the purpose of the bill."

The crux of the complex plan announced by Senator Edward Kennedy (D-Mass.), Democrats' chief negotiator on the deal, would give currently illegal immigrants a path to U.S. citizenship by allowing them to apply for permanent residence after working for eight years in the U.S. Applicants would have to pay penalties of $5,000 and would have limited ability to bring in family members. Kennedy, chairman of the Senate Health, Education, Labor & Pensions Committee, called the compromise "the best possible chance we will have in years to secure our borders and bring millions of people out of the shadows and into the sunshine of America."

More H-1B Visas

The proposal would also increase the number of high-skill workers who could come to the U.S. with certain conditions. The annual cap for the temporary work visas known as H-1Bs would be increased to 115,000, from 65,000. The cap could also be increased 20% per year based on demand, not to exceed 180,000 per year. Technology companies, including Intel (INTC), Motorola (MOT), and Hewlett-Packard (HPQ), have been pushing for an increase.

"America's need for highly skilled workers has never been greater," said Bill Gates, chairman of Microsoft (MSFT), when he testified before the Senate in March (see BusinessWeek.com, 3/8/07, "Gates to Senate: More Visas"). "Broad-based prosperity in America depends on having enough such workers to satisfy our demand."

Yet while tech executives were pleased with the increase in temporary work visas, they had concerns about the proposed path to permanent residency for skilled workers. Now even after talented workers have been accepted for citizenship, they can wait five or more years to get their green card. The compromise proposal would award points to higher-skill and more educated workers so they could gain citizenship, but it's unclear whether the new plan would speed up the whole process. "What we are very concerned about is creating a new backlog on top of an existing one," says Robert Hoffman, vice-president for government and public affairs at software giant Oracle (ORCL) and a spokesman for the tech trade group Compete America.

Bipartisan Opposition, Too

Even Kennedy's Democratic colleagues offered tepid support for his proposal. House Speaker Nancy Pelosi (D-Calif.) hailed the effort, but wasn't so sure about the outcome: "I have serious concerns about some elements of this proposal," she said. "The bill must be improved in the Senate."

The Republican reaction was even harsher. Mitt Romney, presidential candidate and former governor, issued a statement saying, "I strongly oppose today's bill going through the Senate. It is the wrong approach." Senator Chuck Grassley (R-Iowa) voiced his opposition to the proposal and even took issue with how it was put together: "It's disappointing and even ironic how the deal announced today skirts the democratic processes of Congress," he said in a statement. "It was cut by a group of senators operating outside the committees of jurisdiction and without public hearings on key components."

The problem is that, while almost everyone wants changes in the legislation, they all seem to want different, and often conflicting, changes. Conservative Republicans don't want undocumented workers to be able to gain citizenship even with long waits or steep fines. Pro-immigrant groups, on the other hand, think the proposed waiting period and penalties are excessive.

Uneasy Unions

The program for temporary unskilled workers is similarly problematic. The proposal is that workers could come to the U.S. for a two-year stay maximum, and that stay could be renewed twice, but only if the worker departed for one year in between. Business groups want longer stays and fewer disruptions, so they can hire employees from abroad for jobs such as agriculture and construction. "We are trying to figure out if we're more satisfied than disappointed with this agreement," said Stephen Sandherr, CEO of the Associated General Contractors of America.

Yet union leaders see trouble in the whole concept: "All workers know that temporary workers depress wages and create a second-class workforce," says Eliseo Medina, executive vice-president of the Service Employees International Union. Says Sonia Ramirez, legislative representative for the AFL-CIO: "We are troubled by the structure we see for the temporary worker program."

Still, there are plenty of people who hope Kennedy, Bush, and the others pushing for immigration reform will find a way to pass meaningful legislation. Representative Jeff Flake (R-Ariz.), co-author of a House bill, said the Senate compromise is an important step forward for business because it would give companies "the tools to determine who is here legally and who is not. And they'll have a chance to hire the workers they need. It brings certainty."

Bush is prodding politicians on both sides of the aisle to move quickly. "Convictions run deep on the matter of immigration," he said, "but with this bipartisan agreement I am confident leaders in Washington can have a serious, civil, and conclusive debate so I can sign comprehensive reform into law this year."


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