Past ideas and actions to deal with the inflexible visa caps have failed to provide a viable solution. Congress has tried to adjust the visa caps in the past but failed to find a lasting solution. Applications for H-1B visas first exceeded the 1990 cap in 1997 and 1998, when the “dot‐com” economy was gaining steam. To its credit, the 105th Congress responded with the American Competitiveness and Workforce Improvement Act of 1998, which temporarily raised the H-1B cap to 115,000 for fiscal year (FY) 1999 and FY 2000 and to 107,500 for FY 2001. Two years later, the 106th Congress enacted the American Competitiveness in the Twenty‐First Century Act of 2000, which temporarily increased the cap further to 195,000 visas for FY 2001, 2002, and 2003 (while exempting certain H-1B workers from the numerical limits).
The problem with this congressional good‐faith effort was that the higher caps were both temporary and out of cycle with the economy. By the time Congress approved the temporarily higher cap of 195,000 in October 2000, the dot‐com bubble was already deflating. The tech‐heavy NASDAQ stock index was down by 35 percent that month from its peak in March 2000 and would ultimately lose 78 percent of its value by October 2002.12 Meanwhile, the general economy fell into recession in 2001.
The result was a sharp decline in demand for H-1B visas. With the bursting of the dot‐com bubble, the number of H-1B visa petitions fell to 79,100 in FY 2002 and 78,000 in FY 2003, far below the cap of 195,000 visas that Congress had set for those same years—leaving more than 100,000 unclaimed H-1B visas in each of those years. Just as the high‐tech economy and broader labor market began to recover in 2004, the H-1B visa cap reverted to the 1990 cap of 65,000. As a consolation, Congress did approve that year an additional 20,000 visas for foreign‐born workers with graduate degrees from U.S. institutions of higher learning. Over a span of two decades, the only period in which Congress raised the visa cap significantly above the 1990 limit was exactly those years in which demand was lowest. In the following years, as demand has grown to higher and higher levels, the effective cap has remained at 85,000.13
In the wake of failed congressional efforts to adjust visa caps, some have proposed to establish a semiautonomous commission with the ability to change visa caps based on market conditions.14 A version of this commission, called the Bureau of Immigration and Labor Market Research, was even part of the proposed reforms included in the 2013 comprehensive immigration reform bill that was hotly debated before failing to become law.15 Other proposals have included one from former secretary of labor Ray Marshall that would have created an independent Foreign Worker Adjustment Commission to assess the U.S. economy’s demand for foreign labor and the type of skills and training such workers would need. That commission would have had the power to set employment‐based immigration levels, which would have become law unless explicitly rejected by Congress. Other proposals would have limited a commission’s role to making recommendations to Congress to change the ceilings for permanent and temporary admissions. The AFL-CIO and the Economic Policy Institute supported such proposals at the time.16