After delivering his opening statement, Rep. Smith heard the statements of the first witness panel.

Panel 1:
Professor Barry Chiswick, Department of Economics, University of Illinois at Chicago, Dr. James Edwards, Richard Judy, Director, Center for Workforce Development, Hudson Institute, and Rebecca Burdette, Immigration Attorney

Prof. Chiswick, from the University of Illinois at Chicago, stressed the returns to skill for immigrants to the United States. In his opening statement, Chiswick advocated a points-based admission system for immigrants coming to the United States for employment, along the lines of similar point-based systems in Australia and Canada.

Dr. James Edwards focused his testimony on the challenges facing the United States economy in the 21st century and how immigration could assist the economy. While pointing out that a pro-skilled worker immigration policy would not be anti-family, he noted that an increase in the speed of communication and the ease of travel meant the family contact could be kept relatively intact even though family members might be separated by geography. Edwards also cited a Hudson Institute study regarding the development of the workforce through 2020. He identified four areas of concern: 1) a skills gap between potential employees and jobs, 2) fiscal problems with government spending, 3) increased Medicare costs, and 4) an increase in income inequality.

Richard Judy focused on the impact of current immigration policy on the economy. "The continuation of our current immigration policy will undermine America's economy in the 21st century," Judy noted.

Rebecca Burdette, an immigration attorney, stressed the positive benefits of highly skilled immigrants in her prepared remarks. She also stated that the "backlogs are intolerable" in INS processing of visa applications and naturalization. She also advocated raising the cap on per-country admissions under the employment provisions of the legal permanent resident status.

Rep. Smith began the question period by noting that the points system advocated by Chiswick, as well as abolishing the diversity visa system, and other reforms mentioned by the panel were identical in many respects to the reforms recommended by the Jordan Commission. He asked the panelists to comment on the similarities between their recommendations and the Jordan Commission and how their recommendations would assist the economy.

Prof. Chiswick stated that "Absolutely a switch to that kind of policy would have . . . beneficial effect on economic growth . . . the more positive impact of immigrants, the more positive the attitude of the public toward immigrants.

Dr. Edwards followed up Chiswick's comments by pointing out that the continued immigration of low-skilled persons was placing a strain on low-skilled Americans. "We have reduced the welfare rolls from 13 million to 8 million, but this[continued low-skill immigration] compound the problem."

Richard Judy expressed his reservations for a points-based admission system that focused too heavily on academic degrees, arguing that it "should recognize workplace skills . . . So I would not favor a simple minded system." He also noted that ". . . the flexibility of the points system is one of its advantages."

Rebecca Burdette stressed the cumbersome nature of current visa regulations. Rep. Smith asked her about the National Academy of Sciences study regarding the costs to the United States of immigrants based on their skill level. The study showed that immigrants with below a high school education cost the country $90,000, immigrants with the equivalent of a high school education cost the country $30,000, and immigrants with a college education or more were a net benefit to the nation of $100,000. Ms. Burdette said that she didn't doubt the study's conclusions.

Rep. Meehan asked Mr. Judy about the tradeoffs involved in admitting high-skilled immigrants versus educating native workers for high-skilled positions. Using the example of his own family Meehan stated "While I feel strongly in a global economy that we need to provide skills," he expressed concern that the United States would unfairly exclude unskilled laborers, such as his immigrant ancestors. Judy replied that because our modern economy is skills-based we no longer have the opportunities for low-skilled immigrants to make a contribution to the economy. "We are not trying to exclude people," Judy declared, but "tilt the mix of people [we admit]."

Rep. Meehan remarked "I get concerned that instead of beefing up our educational system . . . we instead bring in [high-skilled immigrants]." Prof. Chiswick addressed Meehan's concerns by noting that we can augment the quality of the workforce through skilled immigration, but wholesale replacement seems unlikely.

Rep. Jackson-Lee asked Prof. Chiswick if he wanted a high school level of education to be a minimum floor on immigrant qualification for entry[This reflected a major Democratic concern echoed by Lofgren that requirements or a points system would apply to persons applying under the family preference categories for admittance - thus the wife of an Indian engineer, to use Lofgren's example, would have to have a high school degree], and asked Mr. Judy how he would explain the individual immigrant success story featured earlier in the day [a former welfare mother immigrant from Sierra Leone who owns a drycleaning business].

Prof. Chiswick replied that a high school education was "not necessarily" an absolute requirement, but that "the burden of proof - there should be a compelling reason that this person is of value to the United States."

Judy replied that while he admired the success story, we should do more for our educational system to prepare people for the workforce.

Rep. Pease asked the panel if there was enough experience in implementing points-based systems to evaluate their success.

Prof. Chiswick stated that "I've studied both systems and they work very well at getting high-skilled workers into those countries [Australia and Canada] including those [workers] that would like to come to the United States."

Rep. Pease also asked Ms. Burdette why she favored raising the per-country cap. Burdette replied that because the total number of employment base permanent residency visas is currently under-allocated, raising the cap would not crowd out immigrants from other countries.

Rep. Lofgren asked Ms. Burdette about the current situation in applying for permanent resident status. Ms. Burdette took the opportunity to point out what she found to be the biggest flaws of the current INS and DOL policy. "The problem is DOL has focused personnel or resources" on processing applications. The current system "has serious disadvantages to it. Small and medium size businesses . . . don't have access to the same talent" [due to the bureaucratic process].

Rep. Lofgren then asked the panel to comment on how reform of immigration policy in relation to skilled immigrants could take into account H-1B visa reform.

Prof. Chiswick pointed out that "H-1B is essentially a targeted employment program. It's a farce." "Scrap both [H-1B and employment-based LPR] - Go to a point system . . . and get DOL out of the process," he recommended.

Rep. Goodlatte asked the panel where they would get the numbers under our current immigration cap to reallocate them for a points-based system.

Prof. Chiswick said that "I would take them from diversity visas," as well as the brother/sister and adult relative preference categories. Dr. Edwards would take them from the extended family preferences as well.

Rep. Goodlatte then asked by how many the numbers should be increased

Dr. Edwards said he would scrap the employment-based visas entirely. Mr. Judy would go to a combination rule-based and points-based system for employment admissions. Ms. Burdette argued that the basis of our immigration system is family reunification.

Rep. Goodlatte questioned her on the practicality of family reunification. Laying out a 20 year timeline from when a family member first gets an H-1 visa to the arrival of their brother/sister, Goodlatte then asked Burdette how she would reform the system. Averring that the question was a difficult one, Burdette responded that she didn't know how to solve the backlog.

Rep. Jackson-Lee finished the questioning of the first panel by reading from a CATO institute study on immigration.

Panel II:
William Archey, President and CEO, American Electronics Association, and Randel Johnson, Vice President, Labor and Employee Benefits, U.S. Chamber of Commerce.

William Archey, the President and CEO of the American Electronics Association, gave a Microsoft PowerPoint presentation as his prepared testimony. His presentation focused on the workforce needs for the 21st century. The growth of high-skilled positions, especially in the computer industry, has been dramatic in percentage terms. Interestingly, Archey rated the top 10 technology states, as well as the top 10 states for granting high-tech degrees. Within these 10 states were the 5 highest immigrant receiving states, although Archey did not make that connection.

Randel K. Johnson, Vice President for Labor & Employee Benefits at the U.S. Chamber of Commerce, focused on the need of the economy for more skilled and unskilled workers. According to Johnson, employers have difficulty finding qualified workers, and shortages exist in several areas. Johnson cited studies by the American Counsel of Personnel and Training Magazine which, he claimed, show that the United States needs about 20 million more workers beyond what the Census Bureau projects will be available in the next 30 years, if the economy is to grow at 2.5% with 1.5% productivity growth.

Rep. Smith asked about the $60 billion training figure used by Mr. Johnson in his statement. He also cited the Workforce 2020 report by the Hudson Institute and an Investor's Business Daily article which stated that 90% of new jobs will require a high school education as evidence that immigration policy ought to reflect the changing economic conditions.

Mr. Johnson, responding to Smith's question about using a point system for admission, noted that several EEO lawsuits have struck down high school degree requirements in employment, but were more lenient with college degree requirements.

Rep. Jackson-Lee began her questioning by asking Mr. Archey "What happens to inner city communities in terms of attracting citizens from these [inner city] populations [ if high-skilled immigration is increased]?"

Mr. Archey stressed that "There are a number of companies that have adopted schools" and made other contributions to inner cities. He also noted that Washington D.C. has the best ratio of students to computers in the nation, but can't graduate many of its students, while California has the worst ratio.

Rep. Jackson-Lee asked the panel what could be done to improve the workers so that they qualify for high-skill positions.

Mr. Archey pointed to better K-12 education as well as better math and science education. "You think the law of supply and demand would kick in," regarding high-tech employment, he stated. Archey also stated his preference for vouchers or charter schools.

Rep. Lofgren began her questions by observing "If we can get it [immigration] right in the 16th Congressional District [in California], we can get it right in the rest of America." San Jose is "wallowing in diversity" according to her and "Walking into an American high-tech company is like walking into the UN." Rep. Lofgren stated that she didn't see any difference between employment-based and family reunification-based immigration, because many children who come here as immigrants go on to found companies, just like Andy Grove at Intel.

Panel III:
Kersi Shroff and Stephen Clarke, Legal Specialists, Directorate of Legal Research, Western Law Division, Law Library of Congress, and Laura Reiff, Immigration Attorney

Kersi Shroff, Senior Legal Specialist at the Law Library of Congress, testified on the effects and operation of Australia's points-based admission system. Australia went from having 70% of its immigrant flow family-based to a rough parity between economic and family-based immigration. The Australian government plans on admitting 30,500 family migrants and 35,000 skilled migrants. The Australian government estimates that skilled migrants contribute about 2.4 billion Australian dollars.

Stephen Clarke, Senior Legal Specialist at the Law Library of Congress, testified on the effects and operation of Canada's points-based admission system. According to Clarke, Canada doesn't have a strict cap on immigration admissions, but the government does prepare an immigration plan each year that estimates the total number of admissions. The 1999 plan envisions 200,000-225,000 admissions. Skilled migrants and their dependents number 100,000, business migrants [what we would consider investor visas] number 18,000, spouses, children, etc. number 54,000-58,000, and refugees will be about 22,000 to 29,000. Canada gives an immigrant points-based on 10 categories. These categories include education, age, literacy, settlement expenses, vocational preparation, potential for self-employment, arranged employment, general employment demand, and other factors. To be admitted to the country, migrants must have 70 points, except for assisted relatives, who need 65 points.

Laura Reiff, counsel with Ingersoll Rand, testified that she believes family reunification and employment-based immigration are the center of our immigration policy. According to the National Bureau of Economic Research (NBER) and the Congressional Research Service, there is a high need for immigrants of all skill levels. Reiff used the example of welders needed by Ingersoll Rand, (located in Texas), to bolster her arguments against the current employment-based immigration program. Because the welding positions are vocational, they don't require a college degree, even though they are highly skilled. Ms. Reiff also referred back to the former welfare mother from Sierra Leone to buttress her testimony about the benefits of unskilled immigrants.

Rep. Smith asked both Law Library of Congress panelists "What's the point for giving these particular preferences [points categories]" - "How do these preferences boost the economy?"

Shroff and Clarke cited the downstream effects of the businesses headed by high-skilled immigrants as evidence that it had economic benefits.

Rep. Smith then questioned Ms. Reiff about the NBER study that she cited. He noted that 1) the study had methodological flaws and 2) it was a working document, not an official study because it hadn't been peer reviewed. Ms. Reiff amended her comments and said she agreed with the committee that high unemployment among low-skilled workers was a serious problem.

Rep. Lofgren began her questioning by pointing out that each country responds to different impulses and conditions in making immigration policy. She also cast racial aspersions on the points system before commending the New Zealand version of investor ['million dollar'] visas. Rep. Lofgren then asked Ms. Reiff to comment about her experiences with the labor certification process.

Ms. Reiff began her reply by observing that the H-1B cap will likely be hit in May, according to INS statistics. She also stated that the proposed regulations from the DOL in response to last year's visas increase are overburdensome and go beyond the statutory authority of the law. "I think we may see a lawsuit [challenging the regulations]," or Congress will have to revisit the issue she observed. Labor certification "is not working" according to Reiff, citing figures from California that estimate a permanent labor certification takes 7-10 years.

Rep. Lofgren expressed her hope that the DOL would expand the categories of positions in high-tech that it tracks individually, including Java programmers, so that more Labor Condition Applications can be pre-certified [based on occupation]. Ms. Reiff concurred with that assessment, adding that "Perhaps the program [labor certification] shouldn't be within the DOL and that should be re-evaluated." The goal, according to Rep. Lofgren, is "How to align the bureaucratic cycle with the business cycle."

Rep. Lofgren quizzed Reiff on her proposals to reform the labor certification process. Reiff believes that the Department of Commerce should handle labor certification. She would also like a revamped process for the LCA. "If they [DOL] can automate, and get themselves into the high-tech world," then improvement in the LCA process may be possible. Reiff also noted that breakdowns in the fax-based LCA approval system had contributed to severe delays in the H-1B application process.

Rep. Smith resumed his questioning, and noted that no-one was proposing that immigrants in the spousal preference category have a minimum high school education. He asked Reiff if she supported the present LCA system or a points system.

Ms. Reiff responded that she has some problems with a points system, stating "I think the Canadian system has some racist overtones to it." She also raised the possibility of a court challenge along those lines should a points system be implemented.

Rep. Smith then asked Reiff about the high unemployment among Hispanic communities along the south Texas border. "Don't you think that a part of the high unemployment rate [30%] is due to [low-skilled immigration]," he wondered. Reiff avoided the question by noting that the problem in the labor market is finding workers who are qualified. Rep. Smith broke into her response to repeat his question. Reiff responded that "nationally speaking", immigration doesn't contribute to unemployment. Rep. Smith then asked if there was a 'shortage' because employers didn't pay enough. Reiff replied with a version of the 'Americans won't do those jobs' cliché before being cut off by Rep. Smith's recitation of Department of Commerce statistics showing that 2/3 of unskilled jobs are held by native-born workers.

After this exchange, Rep. Smith turned the hearing over to Rep. Jackson-Lee.

Rep. Jackson-Lee asked the Library panelists if they were present to advocate for the points system or just describe it. After they assured her that they were there to describe the system, she wanted them to project the Canadian and Australian experience to the United States. After the panelists confirmed for Jackson-Lee that both countries are smaller than the United States, they assured her that these countries could provide a basis in experience for judging points systems.

Rep. Jackson-Lee next questioned Reiff on the issue of replacement of American workers. "Do you see the replacement of American workers?"

"I don't see it as a replacement issue," Reiff replied, before adding "They wouldn't hire me [to get workers into the country] if they could find workers [in America]."

Rep. Jackson-Lee returned to her questioning of the Library panelists. "What's the diversity[of Canada and Australian] . . . what percentage minority?" She also asked what the impact of a points system would be on non-whites.

Both Clarke and Shroff pointed out that under the points system, the majority of persons admitted were Asian. They denied that the points system had any racist undertone, and stated that the points system resulted in more diversity.

Rep. Jackson-Lee then closed the hearing by noting that she had learned a great deal from the panelists, and that she hoped to do hearings on the Texas border this session.