The U.S. House Judiciary Committee has backpedalled on its plan to take up an increasingly controversial H-1B bill.

The bill, which was intended to raise salaries of visa workers, faced a sharp debate on the committee, particularly from U.S. Rep. Zoe Lofgren (D-Calif.), a member of the Judiciary Committee. She said it wouldn't do a "damn thing" to stop outsourcing, even by raising the salary limit.

Introduced by Rep. Darrell Issa (R-Calif.), and Scott Peters (D-Calif.), the "Protect and Grow American Jobs Act" had been set for a committee vote on Wednesday. It was removed from the schedule late Tuesday.

The bill, as drafted, faced opposition from the IEEE-USA. This organization had originally called it a step in the right direction but later became convinced it would not close a problematic loophole in H-1B law.

In 1998, Congress said that H-1B-dependent firms -- those employing 15% or more visa workers -- could not displace U.S. workers, and had to also make a good faith effort to first hire an American. Then it inserted a loophole. As long the H-1B visa holder was paid $60,000 or held a master's degree, visa workers could displace U.S. workers.

The Issa and Peters bill raised that $60,000 salary figure to $100,000 and added an inflation adjustment provision. It removed the master's degree exemption all together. Raising the salaries of H-1B workers generally is seen as a way to discourage firms from using visa workers in lieu of U.S. workers.

Issa's office did not respond immediately to a request for comment about the decision to remove the bill from the committee's agenda.

Critics said the legislation would do little. IT salaries in some categories, particularly in the large coastal cities and for older workers, are already above $100,000. Those workers could still get displaced. There was also an argument that the protection for U.S. workers only applies if it takes place within 90 days of making the visa petition.

A key concern for the IEEE-USA was in this section of the proposed law: "the term 'exempt H-1B nonimmigrant' means an H-1B nonimmigrant who receives wages (including cash bonuses) at an annual rate equal to at least the greater of $100,000 or the applicable adjusted ..."

The "including cash bonuses" in parentheses became for the IEEE-USA a giant alarm bell.

"Bonuses are usually conditional," said Russell Harrison, director of government relations at the IEEE-USA. "You can promise somebody that you'll pay them a bonus but typically it's not guaranteed -- if it's guaranteed, it's just salary," he said.

Harrison said the bill may have made the bonus conditional on meeting performance goals. A company could promise the visa worker a $60,000 salary and a $40,000 bonus provided those goals were reach. If that's what the bill allowed, Harrison said, then "it's nothing."

Harrison said the bill initially appeared as a reform bill, although not near the reforms it would like to see in legislation. But, he added, "at least it was a recognition on the part of some legislators that there is a problem.

"We're back to where we started," Harrison said. "We have hundreds of thousands of Americans losing their jobs, and Congress almost but not quite taking up a half-hearted effort to do something about it."