Federal agencies and federal contractors are already anticipating the impacts the EO will have on their operations. Despite existing laws and regulations to favor domestic products in federal procurements, some Administration officials have argued that significant loopholes, lax enforcement, and waivers have weakened these laws. As part of the EO, U.S. Government agencies will need to conduct performance reviews of their contractor acquisitions and procurements to determine if they are following existing ‘Buy American’ laws to the maximum extent possible. Agencies will also need to assess the criteria by which they award waivers to these laws. The aim of the EO is to constrain the number of waivers provided so that greater numbers of American products and persons are used in federally-funded contracts.
Additionally, the restructuring and constricting of the H-1B program as implied by the EO is largely opposed by tech companies and tech industry leaders. According to these individuals, the H-1B program is needed to hire foreign talent with skills that are not as readily found among American workers. Simply put, most of the U.S. tech industry feels there are not enough American workers to supply the high-skilled labor it needs. Currently, the number of new H-1B visas are capped at 65,000 a year and are awarded by lottery with many of those awards going to skilled technology workers. That said, the number of H-1B visa issuances exceeds the cap because the cap does not account for renewals or cap-exempt organizations. To illustrate this point, in FY2016, 180,057 H-1B visas were issued.
President Trump made restructuring the H-1B program a promise of his campaign. Some argue the EO is largely symbolic and was primarily created to meet a campaign promise as the President is nearing the end of his first 100 days in office. According to an unnamed White House Official quoted in Aljazeera, however, the White House hopes the EO is a “transitional step to get towards a more skilled-based and merit-based version” of the H-1B visa program. The same Official states that the rest “will be done hopefully legislatively.”
What the Order Says
The EO begins by defining “Buy American” as those statutes, rules, regulations, and EOs that preference the purchase or acquisition of domestically produced goods, products, or materials. Specifically mentioned are iron, steel and manufactured goods. Additionally, iron and steel products to be considered “produced in the United States” must have had all manufacturing processes occur within the United States. “Workers in the United States” is also defined as any: citizen of the United States, lawfully admitted permanent U.S. resident, immigrant granted asylum, or other authorized and employable immigrant permanently residing in the U.S. The EO orders the Executive Branch to maximize, as much as is applicable by law, the purchase of goods, products, and materials produced in the U.S. Similarly, the Executive Branch is ordered to “rigorously” enforce U.S. entry laws of immigrant workers.
To achieve the policy of giving preference to American-made goods, the EO orders all agencies to “monitor, enforce, and comply with Buy American Laws” as much as applicable as well as minimize the use of waivers. Within 150 days of the EO, all agency heads are ordered to produce an assessment on both the enforcement and implementation of Buy American laws, and respective agency use of waivers. As part of the assessment, agency heads are to develop and propose policies that help maximize the use of materials produced in the U.S., specifically manufactured products and their related components. The Secretary of Commerce and the Director of the Office of Management and Budget will issue guidance within 60 days of the EO to all agency heads regarding how to assess the policies as ordered. Findings from the assessment will be given to the Secretary of Commerce and the Director of the Office of Management and Budget. The EO also sets an annual reporting requirement to all agency heads regarding the implementation of Buy American laws.
Additionally, the EO orders the Secretary of Commerce and the United States Trade Representative to assess the impact of free trade agreements on Buy American laws. Within 220 days, the Secretary of Commerce and the United States Trade Representative will provide an assessment along with specific recommendations to strengthen Buy American laws to the President.
In regards to its immigration measures, the EO orders the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security to propose new rules and guidance reducing fraud and abuse in the hiring of immigrant workers. Additionally, the above agency heads will need to suggest reforms to the current H-1B visa program to ensure “visas are awarded to the most-skilled or highest-paid” immigrant workers.
What this means for DHS
DHS is impacted by both sections of the EO. DHS must now complete an annual reporting requirement that assesses whether they are adhering to Buy American laws in its purchases and acquisitions. Additionally, DHS is to have a more active role in developing the policies and procedures that will be suggested as reforms to the existing H-1B Visa program.
Responses to the EO from industry and media has been divided. The New York Times, has quoted Robert D. Atkinson, President of the Information Technology and Innovation Foundation, saying the move to make hiring foreign workers through the H-1B visa program more difficult will be “counterproductive”. He further states that “companies would go offshore, like Microsoft did with Vancouver, Canada” to seek talent. Contrarily, Fox News, has presented the content of the EO signed by President Trump as a softening of his campaign rhetoric, in which he promised to end the H1B Visa program “forever”.
Some have acknowledged potential abuses of the H-1B visa program. Daniel Costa, Director of immigration law and policy research at the Economic Policy Institute, is quoted in an NPR article stating that “employers are not required to recruit and try to hire U.S. workers before they hire an H-1B worker”, and “a big share of the visas are actually going to IT outsourcing companies”, which are often following a business model that “are paying the lowest wages to H-1Bs.”. He concludes that “There's some things that the Trump administration could do at the margins that might help clean up some of the worst abuses in the program”.