WASHINGTON -- The H-1B visa program allows companies to "legally discriminate" against U.S. workers and displace them, said two U.S. senators who today introduced new legislation to "mend," not end, the controversial program.

The H-1B and L-1 Visa Reform Act, introduced by Sens. Chuck Grassley, (R-Iowa), and Dick Durbin, (D-Ill.), is similar to legislation the two senators introduced last year. But while the bill may be similar, what has changed since then is the economy.

Indeed, the two senators hope to the duplicate the success Grassley and co-sponsor Sen. Bernard Sanders, (I-Vt.), had in getting restrictions placed on H-1B use by financial services firms receiving bailout funds under the Troubled Assets Relief Program (TARP). That bill was approved as part of the massive stimulus package passed by Congress in February.

This legislation, however, is far more sweeping than the TARP-related measure and seeks some permanent changes in how the H-1B program operates, especially when used by offshoring firms.

Regarding the legislation, Durbin wrote that "an outsourcing company can use American workers to train H-1B guest workers, fire the American workers and outsource the H-1B workers to a foreign country where they will do the same job for a much lower wage. In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as 'the outsourcing visa'" -- a quote from a story by the International Herald Tribune in April 2007. India-based firms are the largest users of the visa.

Grassley and Durbin contend that current law allows companies to "legally discriminate against qualified Americans by firing them without cause and recruiting only H-1B workers to replace them."

The proposed bill requires U.S. employers looking to hire an H-1B visa holder to "first make a good-faith attempt" to recruit a qualified U.S. worker. It would also prohibit displacing U.S. workers with H-1B visa holders, ban "H-1B-only" ads and prevent employers from hiring additional H-1B and L-1 visa holders if more than half of their employees rely on those visas. The L-1 visa is used by companies to transfer foreign employees.

The measure also includes a provision to give the U.S. Department of Labor more latitude and authority to initiate investigations and conduct random audits.

Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology and author of Outsourcing America, said the "bill takes the necessary steps to clean up the corrupted H-1B and L-1 visa programs by closing major loopholes that have allowed firms to replace Americans with lower-cost foreign guest workers. It also ensures that firms comply with the regulations by instituting a random auditing process. If passed, both American and foreign workers would be treated fairly."