At a hearing of the House Science and Technology Committee, Gates outlined immigration reforms that he said would help fill “a critical shortfall of skilled scientists and engineers.”

He also advocated improving science and math education and increasing federal funding for basic research.

On immigration, Gates urged lifting the annual cap on H-1B visas for highly skilled immigrants. Last year, the 65,000-person ceiling was exceeded on April 2, the first day that companies could apply for visas for the next fiscal year.

Gates also recommended that Congress increase the number of employment-based visas, or green cards, extend the time that foreign students can stay in the U.S. after they complete their degree, eliminate visa limits for individual countries and make more highly skilled foreign employees permanent residents.

H-1B legislation may not be viable on Capitol Hill. The immigration issue is volatile and brittle following the collapse last year of a Senate bill that would have increased border and work-site enforcement while creating a path toward legal residency for undocumented workers.

Gates essentially is calling for a targeted fix for highly skilled immigration. Without it, Microsoft and other firms will suffer.

“American companies simply will not have the talent they need to innovate and compete,” he said. “Our higher education system doesn’t produce enough scientists and engineers to meet the needs of the economy.”

Last year, Microsoft was unable to hire one-third of the foreign-born candidates it sought because the company couldn’t obtain enough H-1B visas. Gates warned that companies will relocate operations to countries where they can find scientists and engineers.

Microsoft opened a facility in Vancouver, British Columbia, in 2007. Gates praised Canada for policies that ease the hiring of foreign nationals.

“That government recognizes that competing for talent … is very, very important,” Gates said.

Gates received gentle questioning from most of the committee, which was celebrating the 50th anniversary of its founding with the hearing. Chairman Bart Gordon, D-Tennessee, referred to Gates as a “rock star.” Many of his colleagues were deferential and called Gates “sir.”

But Rep. Dana Rohrabacher, D-California, challenged Gates about whether H-1B visas deny jobs to American graduates. Even if they didn’t excel in school, they shouldn’t be shut out of the job market, according to Rohrabacher.

“These ‘B’ students deserve to have good jobs and high-paying jobs,” he said.

Gates acknowledged that Microsoft uses H-1B visas to attract the best talent from U.S. schools. 

“These top people are going to be hired,” Gates said. “The question is, what country will they work in?”

Once they’re on board at Microsoft, they can be catalysts for projects that create more openings. “The ‘B’ and ‘C’ students are the ones who get [the] jobs around these top engineers,” Gates said.

Rohrabacher also questioned whether Microsoft is ignoring unemployed U.S. scientists and depressing high-tech salaries through the use of H-1B visas.

“These jobs are going begging,” Gates said. “We’re not kidding. It’s not an issue of raising wages. We’re hiring as many people as we can.”

In an interview after the hearing, a former computer programmer who was in the audience disputed Gates’ assertion of a tight U.S. high-tech labor market.

“Total baloney,” said Gene Nelson, who lost his job with Genuity when the tech bubble burst earlier in the decade and is now an anti-H-1B advocate. “They’re asking for almost impossible combinations of qualifications.”

He also asserted that companies have the upper hand on immigrants because the firms own the H-1B visas. This allows them to depress the salaries of foreign workers. The visas are “a government subsidy,” Nelson said.

But Gates argued during the hearing that H-1B visas are an important weapon in the zero-sum talent war. It’s better to retain foreign graduates so they contribute to the U.S. economy rather than letting them work at home.

“Our youngsters are competing with [foreign] students, even if we turn them away from this country,” Gates said.

—Mark Schoeff Jr.