CORRECTED-BREAKINGVIEWS-US grabs visa pennies in economic steamroller path

By Gabriel Rubin

WASHINGTON, Sept 22 (Reuters Breakingviews) - Economic policy under President Donald Trump comes with a price tag. Apparently lacking confidence that U.S. growth will sufficiently fill government coffers and keep employment healthy, the White House has focused on generating revenue. Like the erratic tariffs before it, however, the new approach on higher-level work permits lacks appreciation for its inherent conflicts.

Charging employers $100,000 to secure H-1B visas for new foreign-worker applicants is designed to help make up for lower corporate taxes while boosting domestic manufacturing and job opportunities for native-born Americans. Commerce Secretary Howard Lutnick has been a particular proponent of selling U.S. access at a higher price. He is hawking so-called “Trump Gold Cards,” a $1 million immigration fast-track program at summits with business leaders, the New Yorker reported.

Lutnick unveiled the H-1B changes on Friday, with barely more than 24-hour notice before the policy took effect, saying that major companies had been consulted and were on board with the proposal. Microsoft MSFT.O, Amazon.com AMZN.O and other major users of the visas, however, sent out urgent bulletins to their workforces and the administration issued clarifications within hours.

As with the tariff strategy, the visa charges work at cross-purposes. If all 85,000 workers who receive new H-1Bs each year paid the higher fee, total revenue would be $8.5 billion. It's a hefty sum, but one dwarfed by the country's spiraling financial commitments.

Trump’s recently implemented tax and immigration law devotes $45 billion alone to building new detention centers. Assuming no broader effects is absurd. Just as companies rerouting goods or making more in the United States will shrink any import-levy revenue, so too will companies recalibrating labor needs to account for more restrictive H-1B visas. Technology developers could, for example, accelerate dependence on artificial intelligence or enlist additional remote overseas workers.

The opportunity costs of lost brainpower, new inventions and manufacturing prowess from immigrants, as well as the lost consumer spending are hard to quantify. The U.S. foreign-born population dropped by 2.2 million people between January and July, its first decline since the 1960s. The figure is probably overstated by higher non-response survey rates in an aggressively policed atmosphere, but it is a stark one nonetheless. Worse, a restrictive and more transactional H-1B process will mostly just pick up pennies in front of an economy getting steamrolled.

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CONTEXT NEWS

The Trump administration said on September 19 that it planned to charge $100,000 for new applications for H-1B visas, a popular program used by foreign workers, especially in the technology industry.