The ripple effects of Trump's H-1B visa reform - Axios
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The ripple effects of Trump's H-1B visa reform

A draft of Trump's executive order viewed by Axios directs the Secretary of Homeland Security to consider ways to "make the process of H-1B allocation more efficient and ensure the beneficiaries of the program are the best and the brightest." That could mean replacing the current lottery system with one that prioritizes visas for jobs promising the highest salaries.

The salary range: According to Labor Department data, the largest users of H-1B visas — India-based IT services companies such as Tata Consultancy, Wipro and Infosys — tend to pay visa-holding staff lower salaries. Tech companies such as Google, Microsoft, Intel and Cisco tend to promise higher wages for the foreign engineers they hire with H-1Bs.

Data: Department of Labor; Chart: Lazaro Gamio / Axios

Data caveat: When companies hire workers with an H-1B visa, they have to provide notice, through a government filing, of the H-1B workers' wages and work locations. While the Labor Department filings don't directly correlate with number of visas ultimately awarded to the companies, the data reflects visa demand from companies requesting to fill slots with H-1B-holders.

The backdrop: Tech companies such as Microsoft, Google and Facebook say the visas are crucial for specialized jobs they can't fill with American workers. India-based companies that staff corporate IT departments file the largest numbers of visa requests, triggering criticism that the visas are used to fill lower-paid, entry-level IT jobs (which Trump and his supporters would prefer to see go to Americans) instead of higher-paying, more senior engineering jobs.

Tensions over U.S. worker displacement escalated with the 2015 layoffs at Disney, where IT workers were let go after bringing in an offshore contracting firm that largely relies on H-1B visas. Trump seized on the incident during the campaign and said he was "totally committed to eliminating rampant, widespread H-1B abuse." This was a defining incident in shaping the thinking of key White House advisors Steve Bannon and Stephen Miller.

The draft EO doesn't order immediate changes to the H-1B allocation process. Tech industry insiders expect Trump will direct DHS, which runs the H-1B visa lottery system, to start a rule-making to re-prioritize the visa allocation to give preference to higher-paying firms. This pits tech firms against the Indian IT-staffing firms.

What it means for tech: In theory, prioritizing by salaries means visas for more senior, higher-paying jobs will be granted first, and visas for lower-paying jobs (such as those being filled by Indian IT services firms) would fall to the back of line, perhaps not getting allocated at all if demand for the high-wage job visas is strong.

IEEE, one of the largest groups representing U.S. technical workers, in a memo to Miller proposed giving priority to companies that are not H-1B dependent (meaning less then 15% of their workforce is H-1B holders) and pay the highest salaries.

California House members Darrell Issa, a Republican, and Zoe Lofgren, a Democrat, are pushing bills that would raise salary requirements for H-1B visa holders. Tech companies generally support those efforts to de-prioritize Indian outsourcers that they claim "clog up" the oversubscribed lottery system with bulk applications.

But there's a catch: Wage-based hiring means companies may miss out on mid-level workers they still have trouble filling with qualified Americans. For example, software engineering jobs will be filled quickly, but jobs for network engineers or tech support that tend to skew lower on the pay scale could be tough to fill without H-1B visas. "The demand in the job market is not always captured by the highest salary," said one tech lobbyist. So tech companies are advocating for worker skill-set to be taken into account in addition to salary alone.

The irony: Some of the biggest tech companies also use India-based IT staff to supplement their own corporate IT departments. So they'll also feel the pinch if those jobs are harder to fill with visas.

What it means for India-based IT firms: Since they're more dependent on H-1B workers, so-called outsourcing firms will be hit hard if changes to the lottery system move them to the back of the line or cut them out altogether. Stock prices of leading firms Infosys and Wipro have already taken a blow in anticipation of reforms.

For their part, many India-based firms have ramped up U.S. recruiting to reduce its reliance on offshore visa holders, and they say they comply with visa system rules. Squeezing them too hard could drive the companies to move some U.S.-based jobs to India. "The sector deserves credit for helping U.S. companies succeed while also making substantial local investments and protecting and growing the U.S. workforce," said a lobbyist working with the India-based IT sector.

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Trump's mystery tweet: "add more dollars" to health care

President Trump is back on Twitter, and tonight he tweeted about an intriguing idea that's disconnected from pretty much all of the current Republican health care plans: he wants to "add more dollars" to health care.

What the House health care bill does: It would cut overall health care spending by $1.1 trillion over 10 years, including $834 billion in Medicaid savings, according to the latest Congressional Budget Office estimate.

What his budget does: It would cut Medicaid by an additional $610 billion.

Why it matters: It's not clear whether Trump's tweet is an actual policy proposal or just a stray thought that we'll never hear again (a White House spokesman said they have nothing to add). Either way, it's not helpful to Republicans who are have already gone on record supporting an Affordable Care Act repeal plan that cuts spending.

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Trump jolts Europe

Andrew Medichini / AP

After spending time with President Trump at the G7, German Chancellor Angela Merkel has concluded that the United States can no longer be relied upon as a security blanket for Europe. Merkel's comments foreshadow a transformation of the U.S.-European alliances that have underwritten post-WWII stability.

What's behind this: Trump publicly lectured NATO allies that they must stop shirking their financial commitments and begin paying for their own defense rather than relying on the U.S. While the White House publicly rejects this interpretation, Trump's unmistakable message to Europe on his first foreign trip was that the days of unquestioning protection from the U.S. are over.

Merkel's comments, per the AFP:

  • Europe "must take its fate into its own hands" faced with a western alliance divided by Brexit and Donald Trump's presidency, Merkel told a crowd Sunday at an election rally in Munich, southern Germany.
  • While Germany and Europe would strive to remain on good terms with America and Britain, "we have to fight for our own destiny", Merkel went on. Special emphasis was needed on warm relations between Berlin and newly-elected French President Emmanuel Macron, she said.
  • "We Europeans truly have to take our fate into our own hands."
  • "The times in which we could completely depend on others are on the way out. I've experienced that in the last few days."

Side note: As the NYT's Maggie Haberman points out, the place where Merkel's comments will be best received is Russia. Putin is constantly looking for ways to sow discord between European countries and the United States. (Though, it's also worth noting that if NATO countries respond to Trump's pressure by meeting their defense spending commitments, this is bad news for Putin.)

What's next: Trump unsettled Merkel by making the U.S. the only G7 nation to refusing to reaffirm the Paris Accord on climate change. We scooped yesterday that Trump has told confidants he's planning to exit the Paris deal. With Trump there's always the caveat that he could change his mind...But based on my conversations over the past 24 hours, I expect EPA Administrator Scott Pruitt will present a detailed withdrawal plan to Trump and Trump will act on it.

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Dems to tie Russia to Iran on sanctions

Sergie Karpukhin / AP

A well-placed Senate Democratic aide emails this tip: "Expect many Senate Dems to push for the Senate to not do Iran sanctions without Russian sanctions."

What this means: Democratic leaders will exploit the ties between Iran and Russia — and the administration's weak position with regard to anything concerning Russia — to demand that no new sanctions are imposed on Iran without additional sanctions to Russia.

Our thought bubble: Democrats who support the Iran nuke deal, like former Secretary of State John Kerry, are worried about a bill that passed through the Senate Foreign Relations Committee last week. The bill imposes new sanctions on Iran over its ballistic missile tests and other destabilizing behavior. These additional sanctions don't relate to the nuclear deal, but some Democrats are anxious that imposing these sanctions could unravel the Iran deal.

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Hotels try to reclaim bookings from travel sites

John Locher / AP

According to the Wall St Journal, the hotel industry is trying to cut out middlemen like Priceline and Expedia that take 10-30% commissions on bookings, but hasn't yet figured out how to bring customers direct to them.

  • Booking sites "were crucial for hotels during down periods such as after 9/11, but they have gradually eaten into the share of overall bookings ever since."
  • Per Kalibri Labs, the commissions cost the industry "an estimated $4.5 billion for the 12 months ending last June."
  • Generation gap: "A survey conducted by travel-data firm Adara Inc. showed that 52% of U.S. travelers between the ages of 18 and 34 prefer booking hotels through online search engines... compared with 37% age 35 and older.
  • Priceline's CEO Glenn Fogel: "Free is best. Everyone would like people to come direct to their business. That's not the way the world works, though."
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Exploring caves to fight superbugs​

Popular Science has an eye-opening report on scientists spelunking in caves in search of microbes that could be used in medicine. A few highlights from the report:

  • Why caves? Only about one percent of microbes have been discovered, and caves are "a rich source of new microbes."
  • The danger: They're not always easy to reach, and can be dangerous: "Several of the caves [one scientist] investigates are deep in grizzly bear country, so the scientists have to be carried in by helicopter."
  • The hope: "The idea is that if conditions are harsh they need more advantages to outcompete other microbes," and could fight infections resistant to current antibiotics.
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Merkel suggests Europe can no longer rely on U.S.

Domenico Stinellis / AP

German chancellor Angela Merkel issued a call for unity within the E.U. at a campaign event Sunday, stating that she learned over "the past few days" that "the times in which we can fully count on others are somewhat over."
Merkel's comments came after President Trump scolded NATO members over defense spending and was at odds with the rest of the G7 over climate change.
"We Europeans must really take our destiny into our own hands."
Why it matters: These are extraordinary words from Merkel, revealing fractures within the transatlantic alliance — long underpinned by close cooperation between the U.S., U.K., France and Germany — after the seismic events of Trump's election and Brexit. Times have changed — just a few months ago, Merkel was Barack Obama's closest foreign partner.
Symbolism alert: It was no accident that France's Emmanuel Macron embraced Merkel before shaking hands with Trump at the NATO summit last week. European alliances are being strengthened, and the U.S. is increasingly on the outside looking in.

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California's big quake is "definite"

Reed Saxon / AP

A startling headline in the L.A. Times: "The Big One is going to happen, no matter how much you want to deny it, California scientists say." Rong-Gong Lin II, who has earthquakes as part of his beat, writes:

"Seismologist Lucy Jones ... said the way experts like her used to talk about earthquakes wasn't very effective. They tended to focus on the probability of a major earthquake striking in the next 30 years ... Now she is making a dramatically different point, emphasizing that a devastating earthquake will definitely happen, and that there is much the public can do to protect themselves."

  • What's coming: "[N]ext year, scientists and the U.S. Geological Survey are expected to unveil the first limited public phase of an earthquake early warning system that would eventually offer seconds and perhaps more than a minute of warning through smartphones and computers. The system has been planned for years but still could be derailed by budget cuts proposed by President Trump."
  • Failure of imagination: "Jones recalled a ... trip to a devastated area of Japan washed away by a tsunami after the magnitude 9 earthquake off the nation's east coast in 2011. Communities there endured a death toll as high as 10% of the population."
  • "She remembered being taken to Otsuchi, where the city hall sat behind a 20-foot sea wall. Experts had forecast a 16-foot tsunami from the quake. 'The city leaders ignored protocol that said to move to higher ground and conducted their emergency meeting in the city hall. When the tsunami poured over the sea wall, they lost over 1,000 people, including most of their city government.'"
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Report: Top Trump advisers think Kushner should 'step back'

Alex Brandon / AP

Jonathan Karl reports on ABC's "This Week" that people "very close to the president" think the Russia investigation's current focus on Jared Kushner means it's time for the president's son-in-law to "take a step back":
"Even if he is ultimately completed cleared, he is at the center of this investigation right now, and you hear people close to the president, quietly saying, is it too much and is it time for Jared to take a step back, maybe even take a leave of absence from the White House."
Why it matters: Some in the White House have long resented Kushner's influence, and now see an opportunity to sideline him. And Kushner allies have been noting that he and Ivanka have made no long-term commitments to the administration. But it's still far from clear that his spot in Trump's inner circle is at risk.
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'Raging Bull' Trump shifts back into 2016 campaign mode

Chris O'Meara / AP

On Day 129 (and the beginning of the 19th full week), the next phase of Trump's presidency is becoming clear.

Facing political and legal jeopardy, he follows his instincts and runs the government even more like a campaign, with renewed stature for "street fighter" aides and an elevated obsession with his base.

Returning last night from a nine-day overseas trip where Russia headlines wrestled with beauty shots from the world stage, here's a snapshot of the emerging "Raging Bull" Trump:

  • Axios' Jonathan Swan and Amy Harder scooped last night that Trump has privately told multiple people, including EPA Administrator Scott Pruitt, that he plans to leave the Paris agreement on climate change. Trump has told different things to different people, and said yesterday in a TV-teaser-style tweet that he'll make up his mind this week. But his willingness to entertain such a drastic step, right up against his own deadline, was a brushback to Europe and a reminder to moderates in the West Wing, most notably Ivanka Trump and Jared Kushner, that they're advisers, not puppeteers.
  • The President is likely to spend more time in his happy place: massive rallies with supporters. The Washington Post reports (lead story: "Trump may retool his staff") that among the ideas from White House officials, in an effort to revive his stalled legislative agenda and overhaul communications, are proposing "more travel and campaign-style rallies nationwide so that Trump can speak directly to his supporters."
  • We're told that big changes are imminent for the press and communications operations, with a diminished role for the on-camera daily briefing that has proved so entertaining for daytime cable viewers, and such a gift to network correspondents who get to run daily cameos of themselves badgering Sean Spicer.
  • A classic line in the Post story: "'Go to the mattresses,' a line from the film 'The Godfather' about turning to tough mercenaries during troubled times, has circulated among Trump's friends."
  • All three members of the triumvirate who ran the fall campaign saw their power wane, but now are ascendant. White House Chief Strategist Steve Bannon has restored clout as the West Wing draws up org charts for a war room to field Russia incoming. Kellyanne Conway, White House counselor, had been isolated by West Wing enemies but has been empowered to court outside support for Trump. And conservative firebrand Dave Bossie, banished after the campaign, may come into the White House in a political or war-room role.
  • Corey Lewandowski, who ran afoul of the family as Trump's first campaign manager, is once again talking regularly to Trump. Corey is unlikely to come back inside, but a Trump confidant laughed at the press speculation about Corey returning: "Corey's already back."
  • The biggest talker of all inside Trumpland: Sam Nunberg, on the outs with the Trump inner circle since he was fired from the campaign in 2015, is among the members of Trump's outside chorus who are "being courted to play more active roles," The Post said.

The takeaway: One of the most plugged-in West Wing advisers points to this essential dynamic: "Jivanka has influence where it does not conflict with the base."

Coming attractions... N.Y. Times reports in an above-the-fold mash-up, "President Faces Growing Crisis On Russia Ties": "White House aides were trying to assemble a powerhouse outside legal team that they hoped would include seasoned Washington lawyers of the stature of Paul D. Clement, Theodore Olson or Brendan Sullivan, and they planned to introduce some of them to Mr. Trump as soon as this weekend."

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DHS Sec. Kelly: high-level classified leaks are 'borderline treason'

Susan Walsh / AP

Homeland Security Secretary Kelly said on Meet the Press Sunday that high-level classified leaks, like those over the Manchester attack in the U.K., are "borderline treason."
"I don't know where the leak came from. But I... immediately called my counterpart in the UK.... She immediately brought this topic up. And, if it came from the United States, it's totally unacceptable. And I don't know why people do these kind of things, but it's borderline, if not over the line, of treason."
He added: "I believe when you leak the kind of information that seems to be routinely leaked — high, high level of classification — I think it's darn close to treason."
On reports that Jared Kushner wanted to open a secret backchannel with Russia:
  • "I don't see any big issue here relative to Jared.... I think any time you can open lines of communication with any one, whether they're good friends or not so good friends, is a smart thing to do."