The U.S. has begun a ferocious debate over
immigration. Senators John McCain (R-Ariz.) and Ted Kennedy (D-Mass.)
have introduced legislation into the Senate for what they’re calling
comprehensive immigration reform, an ambitious effort to address
everything from illegal immigration from Mexico, and the estimated 12
million undocumented workers now in the country, to technology
companies’ request for more visas for programmers and engineers.

The
House is likely to follow with its own legislative effort. And
President George W. Bush has already said he supports immigration
reform.

Hopes are high that the reforms will actually become
law this year. Similar bills were proposed last year, passing in the
Senate before stalling in the House. Today, however, there may be more
common ground between Congress and the President, since the Democrats
who now control both houses are closer to Bush on the issue than some
Republicans.

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“The
prospects are very good,” says Robert Hoffman, vice-president for
government and public affairs at software giant Oracle, which has been
pushing for an overhaul of the current regulations.

Still,
there’s a risk that reform could suffer the same kind of defeat this
year as in 2006. While plenty of people are frustrated with the current
policies, it’s not clear that there is anything close to a consensus on
how to change them.

The most controversial part of the reform
effort is what to do about the 12 million undocumented workers already
in the country. The McCain-Kennedy legislation is expected to provide
those workers with a way to stay in the country under a temporary
worker program, if they pay certain penalties. Republican opponents in
the House object to any law that lets undocumented workers benefit from
coming into the country illegally.

“A Vote Tomorrow Would Pass”

Peter
King, a Republican representative from New York, is part of a group of
House Republicans who opposed the McCain-Kennedy bill last year. He
plans to fight this year’s legislation, too, if the provisions for
undocumented workers are similar. “My position has not changed,” he
says. “Once we start legalizing the people here, to me that’s amnesty.”

Even King says there’s probably support in Congress for an
immigration bill along the lines of last year’s effort. “If there were
a vote tomorrow, it would pass,” he says. But he thinks that Democrats
want assurances from the White House that enough Republicans would
support legislation that it would pass, so Democrats can call it a
bipartisan effort. “The White House will have to do this on their own,”
he says.

In advance of this year’s immigration legislation, BusinessWeek
talked to experts in academia, business, and beyond about the coming
battle. The idea was not to build support for a particular agenda or
political stance.

Rather, the goal was to press beyond the
partisan politics and grandstanding to collect fresh ideas from outside
the Beltway on the hotly contested topic. Here are a few of the more
intriguing thoughts and concerns on the eve of the debate.

Singular Economic Impact: A Myth

Most
people talk about the economic impact of immigration as if there were
only one kind, whether it’s good or bad. Paul Samuelson, the Nobel
Prize-winning economist from the Massachusetts Institute of Technology,
says that’s a big mistake, one that can lead to misguided public
policy.

One important distinction, Samuelson says, is that
wealthier Americans tend to benefit from the current wave of
immigration while poorer Americans tend to suffer. A farmer in
California may benefit from the inexpensive labor of illegal
immigrants, while a construction worker in Texas sees fewer jobs and
lower pay.

A well-off suburban family may get lower-priced house
cleaning or lawn care, while an engineering student has fewer companies
offering positions. “There are obviously great advantages to the
winners socioeconomically to have immigrants doing work cheaply,” says
Samuelson.

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This
isn’t necessarily an argument against immigration; rather, it makes the
point that immigration policies need to differentiate between the
people who benefit and the people who suffer.

Don’t Overlook the Highly Skilled

Most
of the attention in the immigration debate has been focused on the
low-skill workers who enter the country illegally. In contrast, the
programs for high-skill workers are getting relatively little
attention. There are, however, issues that experts say need to be
addressed with the policies for both temporary and permanent high-skill
workers.

One example is the H-1B program, which are temporary
visas allocated to people with specialized skills. Frustration with the
program has been building in recent years because there’s a cap of
65,000 visas (with some exceptions). This is down from 195,000 a few
years ago, and U.S. companies haven’t been able to hire as many foreign
workers as they would like.

The tech industry wants to boost that
number, and President Bush has said he fully supports an increase. “We
hit the cap in May almost two months after the applications opened,”
says Oracle’s Hoffman, who is also a spokesman for Compete America, a
group that advocates for more high-tech worker visas. Compete America’s
other members include Intel, Motorola, Texas Instruments, and
Hewlett-Packard.

But very little attention has been given to
the criteria for H-1B visas. While the program was set up to help tech
companies and others hire the workers they need, it appears that many
of the visas are not being used to that end. The most active applicants
for the visas are outsourcing companies, particularly those based in
India, including Infosys Technologies and Wipro.

Critics say the outsourcing firms may be using the H-1B program to facilitate the outsourcing of U.S. jobs to other countries.

In
addition, there have been reports that some companies pay H-1B workers
lower wages than their American counterparts. This is prohibited under
the program’s rules, but companies that participate are rarely, if
ever, audited. “If you had no chance of being audited by the IRS, how
honest would you be on your taxes?” says Ron Hira, a research associate
at the Economic Policy Institute and author of Outsourcing America. “I
think you can devise policies to address this issue.”

It’s not
just the temporary work visas for high-skill employees. Those seeking
green cards often have to wait years while they’re required to stay
with the same employer in the same job.

On Feb. 25, Microsoft Chairman Bill Gates wrote an editorial in The Washington Post
on how to keep the U.S. competitive. A key point was making it easier
for U.S. companies to retain highly skilled professionals from other
countries. “These employees are vital to U.S. competitiveness, and we
should welcome their contribution to U.S. economic growth,” Gates
wrote.

Do We Need Comprehensive Reform?

Throughout
Washington, politicians and their staffs are focused on comprehensive
immigration reform, a push to address all the issues at once. One major
reason is a concern that if one group gets the changes it wants, that
group may stop pushing for reform elsewhere.

But this may end
up being a strategic mistake. Most of the political tension is over
what to do about illegal immigration and the undocumented workers in
this country. By comparison, the debate over highly skilled workers is
downright tame.

Robert Whitehill, chairman of the immigration
group at the Pittsburgh law firm Fox Rothschild, argues that it
probably would be easier to split the reforms in two. Whitehall
suggests it makes sense to address the high-skill workers first, where
the reforms are relatively simple.

“Why not go after the
low-hanging fruit?” he says. “I think they should.” He argues that the
cap for H-1B visas should be raised substantially, and that foreign
nationals who get masters or doctorate degrees in the U.S. in certain
specialties, such as engineering, should be automatically granted
residency.

“I think it would be in the best interests of the
country for these boys and girls to stay,” he says. He also says it’s
critical to speed up the process for temporary and permanent workers,
so they don’t wait years for their approvals.

Forget the Wall

Everyone
likes to talk about the wall between the U.S. and Mexico.
Anti-immigration politicians love to show how tough they’re getting on
illegals. Pro-immigrant forces use it to prove they take concerns over
illegal immigration seriously.

But what does all the talk about
the wall accomplish? Nothing, argues Tamar Jacoby, a senior fellow at
the Manhattan Institute, along with plenty of others outside of
politics.

Why? It is expensive and it doesn’t work. The wall with
Mexico can cost between $1 million and $10 million a mile, and it would
cost billions to cover a reasonable chunk of the border. And yet
immigrants from Mexico and other parts of Latin America continue to
slip through. “People are going to get here as long as they have
economic incentives to come,” says Jacoby. “The only real way to get
control is to recognize the reality of our economic needs for labor.”

Jacoby
is in favor of letting many more workers into the country to help boost
economic growth. But you don’t have to share her political stance to
share her disdain for the wall. It is, she argues, a symbol that’s
become a distraction.

Politicians argue about the wall instead of
addressing the tough questions, such as how to meet America’s economic
needs for more workers or how to stop the flow of illegal immigrants
who enter on tourist visas. “It’s like Prohibition or Victorian sex,”
Jacoby says. “If you pretend it doesn’t exist, you can’t control it.”

Put a Hold on the Politics

In
Washington, pundits say immigration reform has to get through Congress
before the end of 2007 to have any chance of passing. That’s because
the Presidential campaign of 2008 will kick into high gear after that,
curbing the chances of the politicians involved agreeing to any
legislation that could alienate potential voters.

Trouble is, the
2008 campaign is already heating up. The camps of Senators Hillary
Clinton (D-N.Y.) and Barack Obama (D-Ill.) have already tussled, and so
many politicians from both parties have declared their interest in the
nomination that the bare-knuckle competition may begin much earlier
than anticipated.

That would be a shame, say those pushing for
reform. They hope the presidential candidates and other politicians
will put off the politics long enough to make a real push for new
legislation. “We want to make sure that our immigration laws are
consistent with our economic needs,” says Oracle’s Hoffman.

Lower the Volume

One
fresh idea has been around for a while, but it seems to keep getting
lost in the heated debate. Advocates on both sides say they want to
lower the debate’s volume, so they have a genuine chance to debate the
issues and perhaps reach a resolution.

That was a point Bush
raised last May when he gave a prime-time address on immigration.
“America needs to conduct this debate on immigration in a reasoned and
respectful tone,” he said at the time.

“Feelings run deep on this
issue — and as we work it out, all of us need to keep some things in
mind. We cannot build a unified country by inciting people to anger, or
playing on anyone’s fears, or exploiting the issue of immigration for
political gain. We must always remember that real lives will be
affected by our debates and decisions, and that every human being has
dignity and value no matter what their citizenship papers say.”