The H-1B Program Won’t Shrink Without Congress

USCIS just filled the cap again – proving that even a $100,000 fee cannot fix what only legislation can.

For a brief moment last fall, it looked as though the H-1B program might finally be shrinking. The administration imposed a $100,000 supplemental fee on new H-1B petitions in September 2025. Overseas applications collapsed almost immediately. Court filings later confirmed that only 85 of the new fees had been paid by mid-February 2026 – just $8.5 million in collections for what is supposed to be the largest skilled-foreign-worker program in the country.

Then USCIS announced on March 31 that the H-1B cap had filled for fiscal year 2027 anyway. Selections came in only about 11 percent below the prior year. Whatever the fee accomplished, it did not meaningfully reduce how many foreign workers would enter the U.S. workforce on H-1B status. The fee shifted who pays. It did not shrink the program.

The substitution nobody talks about

The reason the cap filled despite the fee is straightforward, and it is built into the structure of the program. The $100,000 charge applies primarily to new H-1B workers being brought in from overseas. That category collapsed, just as one would expect – by some measures, external applications fell roughly 87 percent.

But the H-1B program is not fed primarily from overseas. Most of its volume comes from in-country pipelines that the fee does not touch. F-1 students completing OPT and changing status to H-1B. Workers already on H-1B switching from one employer to another. Universities and nonprofit research institutions hiring under the cap-exempt category, with no numerical limit at all. None of those routes pay the supplemental fee. All of them continued to operate normally throughout the past selection cycle. When the overseas door narrowed, employers walked through the in-country one. The program’s overall footprint barely budged.

This is the substitution effect in plain view. It is also exactly what critics of executive-action immigration reform have been warning about for years: regulatory tweaks can change the composition of who arrives, but only Congress can change how many.

Vance to students: “We need Congress to codify this stuff”

Vice President JD Vance made that point directly in mid-April. Speaking to a student audience in Georgia, he argued that big tech companies exploit the H-1B program, that surplus immigration is keeping ordinary American families from being able to afford homes, and that administrative action alone cannot lock in any of the reforms now being attempted. The durable fix, he said, is legislation: “we need Congress to codify this stuff.”

Vance went further and asked his audience to personally press Senate candidates on whether they would cosponsor legislation to eliminate or significantly reduce the program. Rep. Mike Collins, a Senate candidate from Georgia who has come out against the program, made the same point in blunter terms in a recent campaign video, observing that American students are told to study hard and earn a degree only to watch employers fill the resulting positions with H-1B workers. The vice president of the United States is, in other words, telling Americans plainly that executive action has reached its limits and that the next phase of reform has to come from Capitol Hill. He is right.

What the program does to American workers

The case for legislative reform rests on what the H-1B program does to wages and opportunities for the Americans who are supposed to be filling these jobs.

The revised March 2026 study from Harvard economist George Borjas (NBER Working Paper 34793) found that H-1B workers are paid roughly 15 percent less than comparable American workers in the same occupations. Over the standard six-year H-1B term, that translates into more than $100,000 in payroll savings per hire for the sponsoring employer. The labor-market behavior of large H-1B sponsors confirms what the wage data implies. Oracle and Amazon each laid off roughly 30,000 workers earlier this year while filing thousands of fresh H-1B petitions for the same fiscal year. Tech-sector layoffs in the first quarter of 2026 ran 40 percent above the same quarter in 2025. The pattern of cutting American workers and bringing in lower-cost foreign replacements is not anecdotal. For too many of the program’s heaviest users, it is the business model.

The program is also no longer confined to the technical specialty roles it was originally sold as filling. As Sam Silvestro recently documented in Commonplace, recent H-1B filings at American universities – a sector statutorily exempt from the cap and therefore able to use the program without numerical limit – include a mental health counselor at Wichita State, a guidance counselor at Tufts’s School of the Museum of Fine Arts, a business analyst working remotely from Delaware for Iowa State, and a coordinator of multicultural services at Appalachian State. Stanford alone has seventeen active H-1B hiring notices. Outside higher education, financial and telecom firms such as Citigroup and Verizon now use the program at scale, primarily through outsourcing and staffing agencies that supply contractors rather than employees. None of these are roles where qualified Americans cannot be found. The H-1B program has long since stopped functioning as a fix for genuine skill shortages and become a permanent mechanism for labor arbitrage against the American workforce.

Two paths forward in Congress

Two bills currently before Congress would address what the executive branch cannot. They take different approaches in different chambers, and either would represent the most significant H-1B reform in a generation.

In the House, Rep. Eli Crane’s End H-1B Visa Abuse Act (H.R. 8443) restructures the program from the top down. It pauses new H-1B issuance for three years to let the labor market absorb American workers. After that pause, it permanently cuts the annual cap from 85,000 to 25,000 and imposes a real labor-market test on every petition: the employer must attest that no qualified Americans are available, that the H-1B hire will not adversely affect wages or working conditions, and that no layoffs occurred in the previous twelve months or are planned in the next twelve. The bill eliminates the cap exemption that lets universities and nonprofit research institutions hire unlimited H-1Bs off the books. It replaces the random lottery with wage-based prioritization, ensuring that scarce slots go to the highest-paying positions rather than being awarded by lot. It bans the third-party staffing model that has been used to displace American IT workers wholesale. And it tightens the surrounding nonimmigrant work ecosystem – including OPT and H-4 employment authorization – so the core H-1B reforms cannot be undone through workarounds.

In the Senate, Sen. Tom Cotton’s Visa Cap Enforcement Act (S. 2941) closes the loopholes that let hundreds of thousands of additional foreign workers slip past the 65,000 statutory cap every year. The bill makes four targeted changes. It eliminates the university and nonprofit cap exemption. It counts changes of status – most importantly, F-1 students moving from OPT onto H-1B – toward the cap. It counts changes of employer toward the cap. And it requires recounting after three years, so workers extending beyond their initial term occupy a cap slot rather than vanishing into a permanent off-the-books category. The most reasonable estimates suggest the bill would bring roughly 250,000 to 350,000 petitions annually back under the cap that currently escape it entirely.

The two bills are very different in scope. H.R. 8443 is a comprehensive overhaul that would shrink the program dramatically and tighten the surrounding nonimmigrant categories so the reforms cannot be evaded. S. 2941 is a more targeted fix that leaves the headline cap intact but strips out the loopholes that have been used to drive the program past it. Each, on its own, would deliver structural reform that the $100,000 fee alone has not – and that no future executive action can guarantee.

The codification problem

Vance’s underlying point is one that has been made about every executive action on immigration for the past three administrations: a future president can undo it with the stroke of a pen. The $100,000 fee is a regulation. The Wage-Weighted Selection Rule that took effect this past February is a regulation. Both can be lifted by the next administration, successfully challenged in court, or quietly waived for favored employers. None of it lasts unless Congress writes it into law.

H.R. 8443 and S. 2941 each represent the kind of legislative action the Vice President has called for. Each, in its own way, addresses what the H-1B program has become and what it costs the American workers it was originally supposed to protect. Both are common-sense reforms grounded in fairness, and each deserves consideration on its own merits.

The H-1B program will not shrink on its own. It will not shrink under regulatory tweaks alone. It will shrink only when Congress decides to make it shrink – and the bills to do that are already on the table.