[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                   PROPOSED IMMIGRATION FEE INCREASE

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                CITIZENSHIP, REFUGEES, BORDER SECURITY,
                         AND INTERNATIONAL LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 14, 2007

                               __________

                            Serial No. 110-1

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov

                                 ______

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      CHRIS CANNON, Utah
WILLIAM D. DELAHUNT, Massachusetts   RIC KELLER, Florida
ROBERT WEXLER, Florida               DARRELL ISSA, California
LINDA T. SANCHEZ, California         MIKE PENCE, Indiana
STEVE COHEN, Tennessee               J. RANDY FORBES, Virginia
HANK JOHNSON, Georgia                STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
ANTHONY D. WEINER, New York          LOUIE GOHMERT, Texas
ADAM B. SCHIFF, California           JIM JORDAN, Ohio
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota
[Vacant]

              Perry Apelbaum, Staff Director-Chief Counsel
     Sean McLaughlin, Deputy Chief Minority Counsel/Staff Director
                                 ------                                

          Subcommittee on Immigration, Citizenship, Refugees, 
                 Border Security, and International Law

                  ZOE LOFGREN, California, Chairwoman

LUIS V. GUTIERREZ, Illinois          STEVE KING, Iowa
HOWARD L. BERMAN, California         ELTON GALLEGLY, California
SHEILA JACKSON LEE, Texas            BOB GOODLATTE, Virginia
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      J. RANDY FORBES, Virginia
WILLIAM D. DELAHUNT, Massachusetts   LOUIE GOHMERT, Texas
LINDA T. SANCHEZ, California
ARTUR DAVIS, Alabama
KEITH ELLISON, Minnesota

                        Ur Jaddou, Chief Counsel

                    George Fishman, Minority Counsel


                            C O N T E N T S

                              ----------                              

                           FEBRUARY 14, 2007

                           OPENING STATEMENT

                                                                   Page
The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Chairwoman, Subcommittee on 
  Immigration, Citizenship, Refugees, Border Security, and 
  International Law..............................................     1
The Honorable Steve King, a Representative in Congress from the 
  State of Iowa, and Ranking Member, Subcommittee on Immigration, 
  Citizenship, Refugees, Border Security, and International Law..     3
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Chairman, Committee on the 
  Judiciary......................................................     6
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Ranking Member, Committee on the Judiciary.     7

                               WITNESSES

The Honorable Emilio T. Gonzalez, Ph.D., Director, U.S. 
  Citizenship and Immigration Services, Department of Homeland 
  Security
  Oral Testimony.................................................    10
  Prepared Statement.............................................    13

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Chairwoman, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     3
Prepared Statement of the Honorable Steve King, a Representative 
  in Congress from the State of Iowa, and Ranking Member, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     5
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Chairman, Committee on the Judiciary...........................     7
Prepared Statement of the Honorable Luis V. Gutierrez, a 
  Representative in Congress from the State of Illinois..........     8
Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas.............     9

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Barney Frank, a 
  Representative in Congress from the State of Massachusetts.....    47
Letter to the Honorable Zoe Lofgren from the Honorable Joe Baca, 
  a Representative in Congress from the State of California, and 
  Chair, Congressional Hispanic Caucus...........................    48
Letter to the Honorable Luis Gutierrez from the Honorable Emilio 
  Gonzalez, Director, United States Citizenship and Immigration 
  Services, Department of Homeland Security......................    50
Chart outlining the Proposed Fee Increases of Employment Based v. 
  Family Based fees, submitted by the Honorable Emilio Gonzalez, 
  Director, United States Citizenship and Immigration Services, 
  Department of Homeland Security................................    52
United States Citizenship and Immigration Services Responses to 
  Post-Hearing Questions posed by Chairwoman Zoe Lofgren and the 
  Honorable Keith Ellison........................................    53


                   PROPOSED IMMIGRATION FEE INCREASE

                              ----------                              


                      WEDNESDAY, FEBRUARY 14, 2007

                  House of Representatives,
Subcommittee on Immigration, Citizenship, Refugees, 
             Border Security, and International Law
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:20 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable Zoe 
Lofgren (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Lofgren, Gutierrez, Berman, 
Jackson Lee, Waters, Delahunt, Davis, Ellison, Conyers, King, 
Lungren, Gohmert, and Smith.
    Ms. Lofgren. Good afternoon. This first hearing of the 
Subcommittee on Immigration, Citizenship, Refugees, Border 
Security, and International Law will come to order.
    I would just like to note a few housekeeping items here at 
the beginning of our meeting, which is that we will proceed in 
our order of questioning by seniority, making accommodation on 
an ad hoc basis for Members who have conflicts.
    I will make an opening statement, and I am so pleased that 
our Ranking Member, Mr. King, will make an opening statement.
    Certainly, we will accommodate the Chair of our full 
Committee and the Ranking Member of the full Committee to make 
opening statements. We will ask other Members to submit their 
opening statements for the record.
    I would like to welcome everyone to this very first hearing 
of the Immigration Subcommittee in the 110th Congress. I would 
like to welcome Mr. King and the Members of the Subcommittee, 
as well as USCIS Director Gonzalez and the members of the 
public and press who have joined us here today.
    I appreciate that Mr. King and I share a commitment to 
reforming the nation's immigration laws. Together, this 
Subcommittee will find a new way forward on some of the most 
important issues of our day.
    Our immigration services need to move ahead. They must 
transform themselves into 21st-century organizations, fully 
automated, paperless, able to communicate among themselves, and 
able to track not only the status of the cases they process but 
the entries and exits of those who come to the United States.
    Our security interests demand these things. America's 
immigration services must be able to adjudicate cases in ways 
that ensure the safety and security of America and Americans. 
The immigration services must have the resources to do that. 
They must have the people, the technologies and the business 
processes to do their job.
    As the 9/11 Commission indicated in its report, the 
services our immigration authorities provide to their customers 
is just as important to our security. America's immigration 
authorities are in many ways, as the 9/11 Commission 
recognized, our face to the world. When the good people of the 
world try to come to America to visit, to work, to live, our 
immigration authorities, by their actions and by their lack of 
action, make a statement about America and Americans. Excessive 
delays, backlogs, arbitrary decisions--they all send negative 
messages. Those messages, as the 9/11 Commission recognized, 
can harm our national security.
    As the agency charged with adjudicating applications and 
petitions for naturalization and immigration benefits, the U.S. 
Citizenship and Immigration Service is often the first point of 
contact many people have with America.
    It is imperative that the CIS provide the best possible 
service. CIS, by its own admission, is not yet a 21st-century 
organization. It has not yet implemented the technologies and 
business processes that it requires to adjudicate its cases 
effectively.
    Over the past several years, Congress has appropriated 
hundreds of millions of dollars to CIS to help it reduce its 
backlog, fund its operations, and transform itself into a 21st-
century organization. And yet, as we gather here today, the 
Administration has requested a precipitous drop in directly 
appropriated funds.
    In place of those funds, CIS has proposed to significantly 
raise its fees, by an average of 96 percent. In return, CIS 
promises to decrease its average processing time by 20 percent. 
We need to ask whether that return on investment is sufficient.
    Some of the proposed fee increases seem quite large. The 
fee for naturalization applications would rise by 80 percent. 
The fee for an adjustment of status applications would rise by 
over 178 percent. We need to ask questions about the need for 
such large increases.
    It is also important for this Subcommittee to gain an 
understanding of how the agency has been spending the money it 
has received, both from fees and from direct appropriations, 
over the past few years. Only by understanding how the agency 
has previously invested its resources can we fairly judge the 
promises it makes in its proposed fee regulation.
    We must get answers to questions about the agency's future 
plans. We must ask that the agency provide us with its plans to 
transform its technology and business processes. We must begin 
to explore the best means by which CIS ought to be funded. We 
know that the Immigration and Nationality Act permits, but does 
not require, the agency to fund its costs through user fees. 
Only by understanding the nature of the agency's operations can 
we make informed judgments about the best available means to 
ensure the agency has the funding it needs to perform its 
critical mission.
    I look forward to hearing from the witness, Dr. Emilio 
Gonzalez, Director of CIS, today. I look forward to gaining a 
fuller understanding of the agency's current practices, its 
future plans, and how it made its decision to raise the fees.
    At this point, I would like to call on the Ranking Member 
to make his opening statement. Mr. King?
    [The prepared statement of Ms. Lofgren follows:]

 Prepared Statement of the Honorable Zoe Lofgren, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and International 
                                  Law

    I would like to welcome everyone to the first hearing of the 
Immigration Subcommittee in the 110th Congress. I especially welcome 
the Subcommittee's Ranking Member, Mr. King, the members of the 
Subcommittee, USCIS Director Gonzalez and the members of the public and 
press who have joined us here today.
    I appreciate that Mr. King and I share a commitment to reforming 
the Nation's immigration laws. Together this Subcommittee will find a 
new way forward on some of the most important issues of our day.
    Our immigration services need to move ahead. They must transform 
themselves into 21st Century organizations, fully automated, paperless, 
able to communicate amongst themselves and able to track not only the 
status of the cases they process, but the entries and exits of those 
who come to the United States.
    Our security interests demand these things. America's immigration 
services must be able to adjudicate cases in ways that ensure the 
safety and security of America and Americans. The immigration services 
must have the resources to do that. They must have the people, the 
technologies and the business processes to do their job.
    As the 9-11 Commission indicated in its report, the services our 
immigration authorities provide to their customers is just as important 
to our security. America's immigration authorities are, in many ways, 
as the 9-11 Commission recognized, our face to the world. When the good 
people of the world try to come to America, to visit, to work, to live, 
our immigration authorities, by their actions and by their lack of 
action, make a statement about America and Americans.
    Excessive delays, backlogs, arbitrary decisions, all send negative 
messages. Those messages, as the 9-11 Commission recognized, can harm 
our national security.
    As the agency charged with adjudicating applications and petitions 
for naturalization and immigration benefits, the U.S. Citizenship and 
Immigration Services is often the first point of contact many people 
have with America. It is imperative that CIS provide the best possible 
service.
    CIS, by its own admission, is not a 21st Century organization. It 
has failed to implement the technologies and business processes that it 
requires to adjudicate its cases effectively.
    Over the past several years, Congress has appropriated hundreds of 
millions of dollars to CIS to help it reduce its backlog, fund its 
operations and transform itself into a 21st Century organization. And, 
yet, as we gather here today, the Administration has requested a 
precipitous drop in directly appropriated funds.
    In place of those funds, CIS has proposed to significantly raise 
its fees--by an average of 96%. In return, CIS promises to decrease its 
average processing times by 20%. It is appropriate to ask whether that 
return on investment is sufficient.
    Some of the proposed fee increases seem quite large. The fee for 
naturalization applications would rise by 80%. The fee for an 
adjustment of status applications would rise over 178%. We must ask 
questions about the need for such large increases.
    It is also important for this Subcommittee to gain an understanding 
of how the agency has been spending the monies it has received, both 
from fees and from direct appropriations, over the past few years. Only 
by understanding how the agency has previously invested its resources 
can we fairly judge the promises it makes in its proposed fee 
regulation.
    We must get answers to questions about the agency's future plans. 
We must ask that the agency provide us with its plan to transform its 
technology and business processes.
    We must begin to explore the best means by which CIS ought to be 
funded. We know that the Immigration and Nationality Act permits, but 
does not require, the agency to fund its costs through user fees. Only 
by understanding the nature of the agency's operations can we make 
informed judgments about the best available means to ensure the agency 
has the funding it needs to perform its critical mission.
    I look forward to hearing from the witness, Dr. Emilio Gonzalez, 
Director of CIS, today. I look forward to gaining a fuller 
understanding of the agency's current practices, its future plans and 
how it made its decision to raise the fees.

    Mr. King. Thank you, Madam Chair. I want to congratulate 
you for receiving the gavel and starting off this, our first 
hearing of the Subcommittee on Immigration, Citizenship, 
Refugees, Border Security, and International Law. I promise to 
memorize that title before this is over. [Laughter.]
    I am looking forward to this process, and I very much 
appreciate the tone and the professionalism that you bring.
    I am also looking forward to the hearing here today to 
discuss the proposed rules and for the fee increases with 
Director Gonzalez.
    Federal law requires that U.S. Citizenship and Immigration 
Services operate as a fee-based agency. The Chief Financial 
Officers Act of 1990 also requires that USCIS review its fee 
schedule every 2 years to ensure that it reflects the costs 
incurred by the agency. I would go above and beyond this by 
encouraging timely cost projections every year.
    USCIS conducted its last comprehensive fee review in 1998, 
so the current fees are based on 1998 cost projections, with 
some adjustments. Agency operating costs have risen 
significantly since 1998, and while USCIS raised some fees in 
recent years, those increases were not nearly enough to cover 
today's operating costs, which will be about $1.752 billion for 
fiscal year 2007.
    USCIS recently conducted its first comprehensive fee review 
since 1998. The rule proposed by USCIS on February 1 is a 
result of that review.
    I commend Director Gonzalez for trying to ensure that 
American taxpayers are not forced to pay the costs of foreign 
nationals getting immigration benefits such as an adjustment of 
immigration status, employment authorization or replacement of 
a green card.
    The proposed increases do not seem excessive. For instance, 
under the new fee structure, it would cost a person $595 to 
apply for naturalization, or $320 to petition for a non-
immigrant worker. These fees are small in contrast to the 
benefits of American citizenship or legal work status in the 
United States. If I might quote the Ranking Member of the full 
Committee, ``American citizenship is priceless.''
    The fees take into account those immigrants who are least 
likely to be able to pay. For instance, victims of persecution 
will not have to pay fees to apply for asylum, and victims of 
trafficking will not have to pay fees to apply for T-visas.
    USCIS experts will receive 4.7 million immigrant benefit 
applications anticipated for 2008 and 2009. It will cost the 
agency $2.329 billion to have the staff to adjudicate the 
petitions, conduct background checks on applicants, and pay the 
other costs to process all of those applications.
    Some of the proposed new fees will pay for the enhanced 
security and integrity of the immigration system. It is an 
especially important goal. I am pleased to see that these fees 
will fund 170 additional fraud detection and national security 
agents to oversee fraud investigations and the processing of 
applications that have national security concerns.
    It is not unprecedented for criminals and terrorists to try 
and enter the United States through legal channels. Mahmoud Abu 
Halima, a terrorist who blew up the World Trade Center in 1993, 
received amnesty through the 1986 immigration bill. 
Furthermore, 9/11 hijackers came into the United States on 
student and visitor visas. As we have tragically learned, 
thorough background checks are especially critical to 
immigration processing.
    The balance of the money will go toward modernizing the 
technology and business structure of USCIS and improving the 
delivery of services, including a 20 percent average decrease 
in the time for application processing by the end of fiscal 
year 2009.
    These are laudable goals, but only if the national security 
goal is met first. I emphasize that: only if the national 
security goal is met first. I know that some have condemned the 
proposed fee increase and called it unfair to the immigrants 
who have to pay the fees. Some of you have called on the 
Administration to find other ways to fund the changes needed at 
USCIS. But unfortunately, these groups fail to acknowledge that 
it is right for the people who receive the benefits to pay for 
them.
    In other words, the immigrants who will enjoy the priceless 
benefits of living and working in America should have to pay 
for the costs of coming here. After all, the fees are less than 
the average costs of being illegally smuggled into the United 
States--roughly $2,500. American taxpayers should not be 
burdened with paying other people's immigration costs.
    The agency responsible for processing the benefit 
applications should charge the amount required to recoup its 
costs, so taxpayers are not let footing the bill. If the 
proposed fees do do that, then they are justified.
    Dr. Gonzalez, I look forward to hearing your testimony.
    Thank you, Madam Chair, and I yield back.
    [The prepared statement of Mr. King follows:]

  Prepared Statement of the Honorable Steve King, a Representative in 
 Congress from the State of Iowa, and Ranking Member, Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and International 
                                  Law

    I thank the Chairwoman for holding this hearing. I am pleased for 
the opportunity to discuss the proposed rule for fee increases with 
Director Gonzalez. This is the first of what I hope will be many 
insightful hearings in the Subcommittee on Immigration, Citizenship, 
Refugees, Border Security, and International Law. I am looking forward 
to working with Chairwoman Lofgren.
    Federal law requires that U.S. Citizenship and Immigration Services 
(USCIS) operate as a fee-based agency.
    The Chief Financial Officers Act of 1990 also requires that USCIS 
review its fee schedule every two years to ensure that it reflects the 
costs incurred by the agency. (31 U.S.C. 901-03). I would go above and 
beyond this by encouraging timely cost projections every year.
    USCIS conducted its last comprehensive fee review in 1998, so the 
current fees are based on 1998 costs projections. Agency operating 
costs have risen significantly since 1998. While USCIS raised some fees 
in recent years, those increases were not nearly enough to cover 
today's operating costs, which will be $1.752 billion for FY 2007. 
USCIS recently conducted its first comprehensive fee review since 1998. 
The rule proposed by USCIS on February 1st is the result of that 
review.
    I commend Director Gonzalez for trying to ensure that American 
taxpayers are not forced to pay the costs of foreign nationals getting 
immigration benefits, such as adjustment of immigration status, 
employment authorization or a replacement green card.
    The proposed increases do not seem excessive. For instance, under 
the new fee structure, it will cost a person $595 to apply for 
naturalization or $320 to petition for a nonimmigrant worker. These 
fees are small in contrast to the benefits of American citizenship or 
legal work status in the United States.
    The fees take account of those immigrants who are least likely to 
be able to pay. For instance, victims of persecution will not have to 
pay fees to apply for asylum, and victims of trafficking will not have 
to pay fees to apply for T visas.
    USCIS expects to receive 4.7 million immigration benefit 
applications in FY 2008-2009. It will cost the agency $2.329 billion to 
have the staff to adjudicate the petitions, conduct background checks 
on applicants and pay the other costs to process all of those 
applications.
    Some of the proposed new fees will pay for the ``enhanced security 
and integrity of the immigration system,'' which is an especially 
important goal. I am pleased to see that these fees will fund 170 
additional Fraud Detection and National Security agents to oversee 
fraud investigations and the processing of applications that have 
national security concerns.
    It is not unprecedented for criminals and terrorists to try to 
enter the United States through legal channels. Mahmud Abouhalima, a 
terrorist who blew up the World Trade Center in 1993 received amnesty 
through the 1986 immigration bill. Furthermore, 9/11 hijackers came 
into the United States on student and visitor visas. As we've 
tragically learned, thorough background checks are especially critical 
to immigration processing.
    The balance of the money will go toward modernizing the technology 
and business structure of USCIS and improving the delivery of 
services--including a 20 percent average decrease in the time for 
application processing by the end of FY 2009. These are laudable goals, 
but only if the national security goal is met first.
    I know that some have condemned the proposed fee increase and 
called it unfair to the immigrants who have to pay the fees. Some have 
even called on the Administration to find other ways to fund the 
changes needed at USCIS.
    Unfortunately, those groups fail to acknowledge that it is right 
for the people who receive the benefits to pay for them. In other 
words, the immigrants who will enjoy the priceless benefits of living 
and working in America, should have to pay for the costs of coming 
here. After all, the fees are less than the costs of being illegally 
smuggled into the United States: $2,500. American taxpayers should not 
be burdened with paying other people's immigration costs.
    The agency responsible for processing the benefit applications 
should charge the amount required to recoup its costs so taxpayers 
aren't left footing the bill. If the proposed fees do that, then they 
are justified.
    Director Gonzalez, I look forward to your testimony.

    Ms. Lofgren. Thank you, Mr. King.
    At this point, we are honored to have both the Chairman and 
Ranking Member of the full Committee. So I would like to ask 
Mr. Conyers if he would like to make an opening statement.
    Mr. Conyers. Madam Chairman, I would like to make a few 
comments that will not take 5 minutes. I thank you, and of 
course congratulate you as you become Chair, after spending a 
considerable number of years on the Committee and outstanding 
work on at least several Committees. I am very pleased to join 
you and the Ranking Member and the new Members to the Judiciary 
Committee who are joining you on the Subcommittee.
    I only wanted to commend you for cautioning us to be on our 
best behavior at your first hearing.
    So, Dr. Gonzalez, you will be amazed at the courtesy and 
politeness to which you will be treated in this first hearing.
    The idea that an 80 percent increase in the application 
fees is reasonable and necessary is, to me, comparable to the 
incredible factor of massive tax reductions for the most 
fortunate in our society. What is being done in terms of the 
discussion of fees with reference to immigration is determining 
what we should charge and how much more we should charge for 
some of the poorest among us to become citizens.
    Many in the immigrant community see the increase for what 
it is: increasing the costs of the American dream; telling 
those least fortunate among us that they probably need not 
apply.
    John Trasvina, the head of the Mexican American Legal 
Defense Fund, MALDEF, said that ``the Administration's proposed 
fee increases will only erect a barrier to the American dream 
of citizenship.'' We have other comments, particularly from the 
Asian American Justice Center.
    But to me, Members of the Committee, I will be waiting 
carefully to find the evidence that the immigrant community 
citizens and applicants are receiving fair value for their 
money. Fees have been going up across the years. Services have 
not been substantially improving.
    So this is an excellent way for this very important 
Committee of the Judiciary to begin its considerations of these 
and other related immigration topics in the course of the 110th 
Congress.
    I thank you, Madam Chairman.
    The prepared statement of Mr. Conyers follows:]

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
in Congress from the State of Michigan, and Chairman, Committee on the 
                               Judiciary

    I thank the Director for being here today to answer questions we 
have about the substantial proposed immigration fee increase.
    I am particularly concerned about the effect this has on legal 
immigrants trying to express their patriotism and commitment to this 
country by applying for citizenship.
    I have reviewed the fee increase for naturalization applications--
an 80% increase, rising from $330 to $595. The total cost of filing a 
naturalization application would be $675 after including the $80 
biometric fee.
    I have always thought this Congress was interested in legal 
immigration and integration of immigrants by becoming full members of 
American society through citizenship. This substantial fee increase 
belies that goal.
    The President of the Mexican American Legal Defense Fund has noted, 
``The Administration's proposed fee increases will only erect a barrier 
to the American dream of citizenship. . . .''
    I also understand that Congress has repeatedly appropriated 
discretionary funds to the US Citizenship and Immigration Services 
(CIS) to specifically deal with backlogs and infrastructure and 
technology improvements, problems that are again addressed in the 
justification for this fee increase. Congress has also gone along with 
various increases in the past, all premised on the CIS or legacy INS 
theory that such monies were necessary to solve persistent and long-
enduring problems at the agency.
    Yet, with this substantial fee increase, we are being told again 
that this money is necessary to solve the same problems that were 
supposed to be solved with previous monies.
    The Asian American Justice Center has rightly observed that ``the 
naturalization fee has gone from $90 to $400 in the last 15 years and 
will increase yet again to $675 under today's proposal. At the same 
time, immigrants and their families have faced continuing backlogs and 
delays in the processing of their applications and diminishing customer 
service.''
    Furthermore, CIS concedes that it has been using funds from the 
Premium Processing Fees to fund operating costs beyond those permitted 
by law. The law specifically states that Premium Processing fees must 
be used solely to cover the costs of adjudicating Premium Process 
Service cases and for information technology infrastructure 
improvements. Perhaps if the agency had used those funds as required by 
law we wouldn't have the existing problems at CIS.
    Given past failures of the agency to correct serious problems that 
should have been fixed years ago, I am quite concerned about the equity 
of charging future CIS customers for mistakes made by the agency in the 
last decade.
    With such a history, how is this Congress supposed to believe the 
latest justification for another fee increase?

    Ms. Lofgren. Thank you, Chairman Conyers.
    And now I would like to recognize the Ranking Member of the 
full Committee, Mr. Smith.
    Mr. Smith. Thank you, Madam Chair.
    First of all, I would like to congratulate you on chairing 
your first hearing as Chairman of the Immigration Subcommittee. 
That is a great distinction, and you are an able Chairman, 
given your background and expertise. I know that this hearing, 
as well as all future hearings, are going to be very 
productive.
    I would also like to thank Director Gonzalez for testifying 
today, and say to Director Gonzalez, while I have to leave 
shortly and will not be able to stay for the questions, I did 
read your testimony and do appreciate your perspective.
    Madam Chair, I would also like to say that in thinking 
about the proposed fee to become a legal permanent resident or 
get your green card, I have to say my perspective is that that 
has to be the best deal in America. To think that for a few 
hundred dollars, one can become a legal permanent resident and 
then, 5 years later, a citizen has to be one of the greatest 
values in the world.
    I subscribe to the feeling that the greatest honor our 
country can bestow on anyone is that of U.S. citizen. Years 
ago, Teddy Roosevelt, when he was president, said, ``The 
highest office anybody could ever hold was citizen.'' That is 
the kind of deference I give that particular office and that 
particular status.
    So it is an honor. It comes with many benefits. It comes 
with many responsibilities. But again, for a few hundred 
dollars to have those opportunities and to have those benefits 
is truly a great value.
    I also think it is appropriate that an individual pay for 
the cost of processing the benefits and the title and the 
status that they are getting. Rather than burden the taxpayer 
with those costs, it is appropriate that those who receive the 
benefits pay those costs. I don't think we are going to have 
too many complaints about the funds involved.
    There are, in fact, millions of people around the world who 
would dearly love to come to the United States legally, who 
would love to become legal, permanent residents, and 
subsequently citizens. There are millions of people around the 
world who would pay thousands of dollars just for that 
opportunity.
    So again, I want to put in perspective and keep in 
perspective the money that we are talking about, the costs of 
the application that we are talking about, because truly, the 
cost is small compared to the priceless honor that one acquires 
when one is in this country as a legal permanent resident or a 
citizen.
    Madam Chair, thank you for the opportunity to make some 
brief opening statements, and congratulations again to you on 
chairing this hearing.
    Ms. Lofgren. Thank you, Mr. Smith.
    In the interest of proceeding to our witness and mindful of 
our busy schedules, I would ask that other Members submit their 
statements for the record. Since we are in recess next week, I 
would ask that Members submit any opening statement by the 
close of business next Wednesday.
    Without objection, all opening statements will be placed in 
the record.
    [The prepared statement of Mr. Gutierrez follows:]

Prepared Statement of the Honorable Luis V. Gutierrez, a Representative 
                 in Congress from the State of Illinois

    Chairwoman Lofgren and Ranking Member King, thank you for calling 
this hearing on an issue that is of utmost importance and concern to me 
and my constituents. I would also like to thank our witness, Dr. 
Gonzalez, for his time and willingness to share with us further 
information on U.S. Citizenship and Immigration Services' (USCIS) 
proposal to increase fees for immigration petitions.
    As a member of Congress who provides extensive district services to 
assist immigrants and prospective citizens to navigate the complex 
process of legal immigration, I fear that an average 66% increase in 
immigration fees will price good, hard working, legal immigrants out of 
their opportunity to obtain benefits for which they qualify and have 
earned. Citizenship should not be auctioned for sale to the highest 
bidder, and it should not be bestowed on someone based on his or her 
income.
    Immigrants are prepared to pay the cost of processing the 
applications they submit to USCIS and for courteous, timely and 
efficient services. However, the cost must be a fair price, and not 
burden the applicants of the future with budget shortfalls and agency 
inefficiencies of the past.
    Clearly, the USCIS proposal would require petitioners to pay costs 
above and beyond those of processing their actual applications. It is 
unacceptable to charge immigrants additional fees for expenses 
unrelated to application processing, such as litigation costs, reducing 
the backlog of previous applications, or rolling out new technologies 
that USCIS should have implemented long ago. We must find an 
alternative solution to the agency's funding shortfalls and future 
needs, and Congress can and must help.
    Section 286(m) of the Immigration and Nationality Act permits USCIS 
to recover the full costs of processing applications. The statute also 
allows USCIS to request appropriations of Congress. I am perplexed as 
to why the Administration is requesting a mere $30 million for Fiscal 
Year 2008, when USCIS received approximately $180 million in Fiscal 
Year 2007, $115 million in 2006, $160 million in 2005 and $236 million 
in 2004. Given that USCIS has requested and received appropriations in 
the past, why not engage us, the Congress, in trying to find the right 
balance between fees and appropriations that will not place 
insurmountable financial hurdles in the path of tax-paying immigrants 
and prospective citizens?
    I hope this hearing sheds some light on these questions and 
provides us with an opportunity to explore alternative solutions to 
secure funding for USCIS. I look forward to the witness' testimony. 
Thank you, Madam Chairwoman.

    [The prepared statement of Ms. Jackson Lee follows:]

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
           Representative in Congress from the State of Texas

    This subject of this hearing is the U.S. Citizenship and 
Immigration Services' (USCIS) proposal to raise immigration benefit 
application fees. On January 31, US Citizenship and Immigration 
Services (USCIS) proposed increased fees for immigration benefits. 
Under the proposed increase, the cost for naturalization would rise 80 
percent from $330 to $595 for adult applicants and from $255 to $460 
for children, the fee for lawful permanent residence would rise 178 
percent from $325 to $905, and the fee for fingerprinting would rise 14 
percent from $70 to $80. The public has until April 2, 2007, to file 
written comments. The changes will take effect in June 2007, at the 
earliest.
    In 1988, Congress authorized the establishment of a benefit 
applications user fee account to facilitate the use of application fees 
to fund benefit processing operations, which resulted in a shift of the 
burden for funding benefit processing operations onto the applicants. 
This includes the agency's overhead and law enforcement activities such 
as investigations and security checks. The applicants also bear the 
cost of processing the applications of other applicants who do not have 
to pay an application fee.
    USCIS waives application fees for various classes of applicants, 
such as applicants who cannot afford the fee, applicants filing for 
asylum, and members of the United States Armed Forces filing for 
naturalization. USCIS's proposal would add waivers for applications 
filed by victims of human trafficking and applicants seeking an 
immigrant classification under the Violence Against Women Act.
    According to USCIS, the increased fee revenues would be used for 
improving processing times and for completing the transition from paper 
to electronic processes. USCIS projects that with the increased fees, 
it would be able to reduce average processing times by 20 percent by 
the end of FY 2009. It also plans to use the increased fees to more 
effectively address national security concerns, better prevent and 
detect fraud, and invest in technology that transforms processing 
methods, thereby increasing the agency's efficiency and effectiveness.
    Immigration benefits have great value. It is not inherently 
unreasonable to require applicants to bear the cost of processing their 
applications. I think it is unreasonable, however, to require them to 
pay for the processing of applications filed by other applicants as 
well. I also think it is unreasonable to require them to pay for the 
costs of modernizing the system for processing benefits applications
    Under this system, USCIS has to collect fees at a level that will 
ensure recovery of the full costs of processing the benefits 
applications. The fees also must cover the cost of the infrastructure 
that USCIS must develop and maintain to support case processing and the 
administration of the nation's immigration laws.
    This fee-based funding system affects every facet of USCIS 
operations, including the ability to implement new program and 
processing initiatives; begin information technology and other 
modernization efforts; and plan for the future. USCIS must calculate 
its budget by multiplying current fees by projected application volume 
and then conform the budget to those numbers. This results in a budget 
that is based on projected revenues rather than consideration of 
anticipated needs and costs.
    The USCIS Ombudsman, Prakash Khatri, has been working on 
alternative funding systems, and he has made some good suggestions. For 
instance, he has suggested that Congress consider a revolving fund 
account or other appropriated funding source for USCIS. A revolving 
fund could be used to defray current costs and be replenished from 
future fees.
    We will need such a funding system to make it possible for USCIS to 
cover the start up costs of a legalization program that could involve 
10 or more million applications. To be able to process such a large 
increase in applications, USCIS will have to hire and train additional 
personnel, buy or rent additional office equipment, and lease 
additional office space.

    Ms. Lofgren. Without objection, the Chair will be 
authorized to declare a recess of the hearing at any point.
    We have a distinguished witness, Dr. Emilio Gonzalez, with 
us this afternoon to help us consider this important issue.
    Before we proceed any further, I want to make an inquiry.
    Dr. Gonzalez, you have a distinguished career in our 
military, so do you prefer to be called ``Colonel'' or 
``Doctor'' Gonzalez?
    Mr. Gonzalez. You can call me anything you want. 
[Laughter.]
    Ms. Lofgren. Well, since it says ``Dr. Gonzalez'' on your 
name tag, I will introduce you as Dr. Gonzalez, Director of the 
U.S. Citizenship and Immigration Services.
    Prior to his confirmation as Director in December of 2005, 
Dr. Gonzalez served as the Director of Western Hemispheric 
Affairs at the National Security Council and completed a 
distinguished 26-year service in the U.S. Army.
    Dr. Gonzalez earned his bachelor's degree from the 
University of South Florida in Tampa and got his master's 
degrees from Tulane and the U.S. Naval War College and a 
doctorate in international relations from the University of 
Miami.
    Dr. Gonzalez, your written statement will be made part of 
the record in its entirety. I would ask that you now summarize 
your testimony in 5 minutes or less. To help you stay within 
the time, there is a timing light at your table. When 1 minute 
remains, the light will switch from green to yellow, and then 
red when the 5 minutes are up.
    Dr. Gonzalez, we welcome you. Please begin.

TESTIMONY OF THE HONORABLE EMILIO T. GONZALEZ, Ph.D., DIRECTOR, 
   U.S. CITIZENSHIP AND IMMIGRATION SERVICES, DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Gonzalez. Thank you. And good afternoon, Madam Chair, 
Ranking Member King, Members of the Committee. My name is 
Emilio Gonzalez, and I am the Director of United States 
Citizenship and Immigration Services.
    I am accompanied today by USCIS's Chief Financial Officer, 
Mr. Rendell Jones, and our Associate Director for Domestic 
Operations, Mr. Michael Aytes.
    I appreciate the opportunity to testify today regarding 
USCIS's proposal to adjust the immigration benefit application 
and petition fee schedule.
    I believe that we all share the same interest when it comes 
to the future of our immigration service. We all want a quick 
and secure flow of legal labor across our borders. We all want 
an easy way to verify the status of workers. We prefer the 
speed and convenience of an electronic and Internet application 
processing system, as opposed to filing paper-based 
applications through the mail.
    We don't want application backlogs, and we want to avoid 
the unnecessary red tape and redundancies that slow down our 
systems. That is why we have proactively taken steps today to 
make sure that we will have the personnel and procedures in 
place for the potential operational realities of tomorrow.
    Consistent with the President's fiscal year 2007 budget and 
a 2004 GAO report on the existing fee structure, USCIS has 
completed a new, comprehensive fee review that will adjust 
application and petition fees to guarantee full cost recovery 
and allow USCIS to strengthen the security and integrity of our 
immigration service, provide customer service and modernize 
business operations for the 21st century.
    Specifically, the new fee structure will enable USCIS to 
improve the integrity of our immigration system by increasing 
fraud prevention and detection efforts and expanding national 
security enhancements; by reducing the processing times by 20 
percent by the end of fiscal year 2009; by addressing 
performance gaps identified by the Government Accountability 
Office, the DHS Inspector General, and the USCIS Ombudsman; to 
upgrade facilities and provide better training to ensure a 
skilled workforce; to automate business operations, modernize 
information technology infrastructure and reduce unacceptable 
paper-based processes.
    While these initiatives are characterized as enhancements 
to our current resources and operations, they are also critical 
investments necessary to meet our current mission requirements. 
We are adjusting our application process to ensure that USCIS 
not only makes up for lost revenue, but so that we can also 
build an immigration service for the 21st century. The new fees 
represent the comprehensive cost of what it takes to keep this 
agency not only afloat but moving forward.
    It is important to note that this fee increase is necessary 
regardless of whether comprehensive immigration legislation is 
passed. Law and policy have long called for the costs of 
providing immigration benefits to be borne by those applying 
for them, and for the most part, should not be funded by the 
U.S. taxpayer. The increased revenue generated by this rule 
will support enhanced security and refine USCIS business 
processes to strengthen our ability to perform our mission and 
continue to deliver a quality product to every applicant.
    I understand that these fees will have human consequences. 
Since becoming USCIS Director, I quickly learned that 
everything we do in this agency affects people, which is one of 
the main reasons that I so enjoy being its Director, because 
the work that we do at USCIS can make a positive impact on the 
daily lives of countless individuals. What we do every single 
day is concrete, far-reaching and, by no means, abstract.
    As a naturalized American myself, I naturally view the fee 
proposal through the prism of an immigrant. At the same time, 
as Director, I am mindful of my sworn duty to maintain the 
integrity of our immigration service. Therefore, my goal and 
heartfelt obligation is to make sure that USCIS has the 
resources required to provide immigrants with the high quality 
professional assistance they expect and deserve.
    We recognize that the proposed fees will increase costs for 
those seeking to become citizens or sponsor workers. However, 
the USCIS isn't trying to make money or turn a profit. Instead, 
we are trying to create a fair way to make sure we cover our 
costs from those who utilize our services and not to pass the 
bill on to the American taxpayer.
    These new application prices are necessary to enhance and 
improve our service, making it easier and quicker to process 
applications, all without compromising national security. In a 
short time, immigrants will see a more vibrant, technologically 
savvy, transparent and professional and speedy immigration 
agency.
    I look forward to your questions this afternoon, and thank 
you.
    Madam Chair, with your approval and before the questioning 
process, I would like to invite my colleagues, Mr. Michael 
Aytes, Associate Director for Domestic Operations, and Mr. 
Rendell Jones, the USCIS Chief Financial Officer, to join me.
    Ms. Lofgren. We would welcome them as resources to you in 
answering questions that the Committee may have.
    Mr. Gonzalez. Thank you, Madam Chair.
    [The prepared statement of Mr. Gonzalez follows:]

         Prepared Statement of the Honorable Emilio T. Gonzalez



                               ATTACHMENT



    Ms. Lofgren. As we ask our questions of Dr. Gonzalez, I 
will recognize Members in the order of their seniority on the 
Subcommittee, alternating between majority and minority, 
provided that the Member is present when his or her turn 
arrives. Members who are not present when their turn begins, 
will be recognized before a new round of questioning would 
begin. I will reserve the right to accommodate Members who are 
unavoidably late or in a conflict situation with another 
obligation.
    I will begin by recognizing myself for 5 minutes.
    Dr. Gonzalez, under the proposed fee schedule, the preamble 
to the rule says, ``Premium processing revenues will be fully 
isolated from other revenues and devoted to the extra services 
provided to premium processing customers and to broader 
investments in a new technology and business process 
platform.''
    It looks to me, from the rule, that USCIS has identified a 
new technology and business process platform, but I don't have 
a report on this. I haven't asked for one yet, but I wonder, do 
you have a concept or plan to transform your technology and 
business process platform? If so, can you tell us what that 
would be? And can you provide us with a copy?
    Mr. Gonzalez. Thank you, Madam Chair.
    We do have a business process plan. In fact, we have even 
established a transformation office within USCIS because, as we 
looked across the board, we realized that we need enhancements 
everywhere. We need enhancements in I.T. We need enhancements 
in security and fraud detection, enhancements in infrastructure 
and training and personnel.
    We can get you what it is specifically that you are looking 
for, whether it is our spend plan, whether it is our concept of 
operations, our transformation. I am not sure----
    Ms. Lofgren. I am interested, I mean broadly, where are you 
going to spend the money, whether it comes from fees or as 
appropriations, as it has for the past two Congresses. What is 
the plan to improve business processes? What is the technology 
plan?
    I would like to review that in some detail with you, and 
perhaps even bring in some of our friends from the academic 
community to advise not just the Committee but also the 
department and critique it and make sure that it is the best 
possible plan.
    Mr. Gonzalez. Since I brought with me my subject-matter 
experts on the entire fee structure, I would defer to Mr. 
Aytes, my Associate Director for Domestic Operations.
    Mr. Aytes. Madam Chair, we would welcome that. In fact, the 
GAO is now looking at that issue with us. They have been doing 
some interviews. We have been working closely with the 
Department in developing the technology.
    Ms. Lofgren. Very good. Then we will look forward to 
getting those details.
    Let me ask, a new fee for an adjustment-of-status 
application would be $985 for each applicant 14 years of age or 
older and $805 for each applicant under age 14. So for a family 
of four with a 15-year-old and an 11-year-old, the total filing 
fee for adjustment of status would be $3,760.
    For a family with a primary wage-earner making 
approximately $12.41 an hour--and I choose that because it puts 
them at 125 percent of poverty, which allows them to be 
sponsored and issued an affidavit of support--it would take 
approximately 303 hours or 7.6 weeks of work to earn the fee 
for the family to adjust their status.
    That seems, to me, awfully high. I am wondering if you have 
considered the impact that a fee at that level would have on a 
normal hard-working family and whether it would be really too 
burdensome.
    I know in 1998, there was a fee schedule looked at, and not 
the full fee was imposed because of the impact on working 
immigrants. Did you look at that?
    Mr. Gonzalez. Madam Chair, this is why this is part of the 
dialogue that we have not only with Members of Congress but 
also with all our stakeholders and our constituents in the 
field.
    I would say that the $905 figure deserves some explanation. 
Although from $300 to $900 looks like it is an exorbitant 
increase, one of the things that we factored into this new 
price was the interim benefits that were being charged 
separately before.
    In our study--which I might add, our fee review took 8 
months to complete--we found that an average applicant came 
into one of our offices for additional work authorizations at 
least twice, and that they came in also to ask for other 
interim benefits such as travel documentation.
    Currently, we are charging an average applicant about $800. 
So the net increase is really from $800 to $905.
    Ms. Lofgren. But, if I could--and I am going to live by the 
rules on the time--but not every applicant has an extension, 
and not every applicant--you know, the 15-year-old doesn't need 
a work issue. With the biometric fee, it is $985, not just 
$905. So as I understand the rule, this family that I have 
described would also not be eligible for a waiver.
    I just want to raise this issue. I know that you care about 
this, but we are dealing with the rule and how we might make 
this work for the Government, as well as the immigrant.
    Mr. Gonzalez. Yes, ma'am. I care about it deeply, which is 
one of the reasons that I mentioned in my opening statement 
that I so enjoy my job. I am not only the head of immigration, 
but I also see myself as an advocate for our immigrant 
communities. I understand that everything has a cost and that 
everything has an effect.
    Our goal is not, by any means, to create a situation where 
an immigrant simply cannot afford to apply. But at the same 
time, I want that person to expect and deserve the very best 
level of service, so that when you do have to pay an increase, 
you can go into a facility, not have the waits, not have the 
long lines, not have the shoddy buildings.
    There is a tit-for-tat here. It isn't as though we are 
increasing our fees and that the person paying them will see 
nothing in return.
    But I recognize your comment, and yes, ma'am, this is part 
of our comment period. We have been getting many comments. We 
are going to review them and make adjustments as necessary 
before we move out.
    Ms. Lofgren. Thank you very much.
    My time has expired. I would now like to recognize the 
Ranking Member, Mr. King.
    Mr. King. Thank you, Madam Chair.
    Director Gonzalez, I thank you for your testimony.
    As I look over the fee schedule, the first question I want 
to ask is, are there fees out there that you are asking on this 
adjustment that are actually lower than your cost to produce 
those benefits?
    Mr. Gonzalez. There are some benefits that we are actually 
not charging for and continuing not to charge for, and there 
are some benefits that we charge for now that we have zeroed 
out. We don't charge a fee for asylum-seekers. We don't charge 
a fee for refugees. That is a matter of management. That is a 
decision I made to continue that.
    We also don't charge to naturalize our U.S. men and women 
in uniform. We have naturalized, under the President's 
executive order, about 28,000 men and women in uniform around 
the world, and we don't charge for those services.
    We have also zeroed out under this fee rule the T-visa, 
which is for victims of people who have been trafficked, and we 
have also zeroed out the Violence Against Women Act 
beneficiaries.
    So, yes, we have actually taken some steps to zero out some 
fees.
    Mr. King. Okay. I see a fee here, I have a list of costs 
that I think you have produced. I am looking at Form I-360 that 
shows a proposed fee of $375 and a cost of $2,408. Would 
someone want to speak to that particular fee?
    Mr. Gonzalez. The increase?
    Mr. King. Well, the cost being so much greater than the 
proposed fee. The published cost is $2,408, and the proposed 
fee is $375, moving it up from $190.
    Mr. Gonzalez. Rendell?
    Mr. Jones. Congressman King, the I-360 is one of the forms. 
There are a couple of exceptions that we talk about at the end 
of the rule.
    The basic premise is, the more time it takes to adjudicate 
an application, the more it costs. The more our costs, the more 
applicants have to pay.
    But for the forms like the I-360, and a couple of others--
there are about four or five of them--where the volumes are 
pretty low----
    Mr. King. Could you define the I-360, please?
    Mr. Jones. I am reading from the form list here. The I-360 
is a petition for Amerasian widow, widower or special 
immigrant.
    Mr. King. Okay.
    Mr. Jones. There are a couple of those, and the estimated 
volume for those is a little less than 5,000 a year. So it is 
pretty small compared to our overall fee-paying volume of 4.7 
million.
    But what we have done in those few exceptions, is we have 
held the increase to what the average increase is. So you are 
correct that what we show as the cost is higher than what we 
are doing as to average increase, but there are about four or 
five exceptions.
    Mr. King. Thank you.
    Then I direct my follow-up question to the Director, then. 
Keeping that in mind, is that a reflection of compassion on a 
classification of applicant that might be significantly 
hardshipped by the higher fee?
    Mr. Gonzalez. Correct. And also the volume is low enough so 
that we could afford to do that without necessarily skewing any 
further the total fee structure.
    Mr. King. If there were going to be an initiative to 
rearrange some of these fees and still produce the funding 
stream that you need to meet the goals that you have laid out 
in your testimony, do you see much room to maneuver that? How 
difficult was it to lay this out?
    Mr. Gonzalez. Sir, the maneuver room, it is hard because 
you have to have critical mass, so that if you start adjusting 
fees on some benefit categories, and it just so happens that 
the numbers of filings are maybe minuscule compared to the 
total filings. You know, you could charge some people $10,000 
for a benefit, but the number of filings are so low that it 
won't affect the bottom line of what we need to take this 
agency to where we want it to be.
    Mr. King. Thank you.
    As I look down through this list of fee schedules, I 
identified four that the cost is greater than the fee. The 
balance of them appear that the listed cost is less than the 
proposed fee. It is what I would expect, but also I would think 
if we would do the math on this sheet, we would come up with 
the increase that you have testified to.
    Can you tell me what will happen with the margin that is 
above your cost to produce the benefits? What will happen to 
that capital?
    Mr. Gonzalez. Go ahead.
    Mr. Jones. It is shifted to the other applicants. So if it 
is costing us more for the I-360 than we are charging, then 
other applicants are bearing that marginal cost for each 
additional unit.
    Mr. King. Would it be true if I were to put the costs and 
the proposed fees on a spread sheet and multiply the numbers of 
the projected applicants across there, does that balance sheet 
come out to zero? Or does it produce some capital for, say, 
infrastructure improvement and technology improvement?
    Mr. Jones. You mean over and above what we say our costs 
are?
    Mr. King. Correct.
    Mr. Jones. It equals our costs.
    Mr. King. It equals your costs?
    Mr. Jones. Yes.
    Mr. King. Then where will you get the resources to upgrade 
your technology?
    Mr. Jones. There are a couple of things. Implicit in the 
price for those applications are resources to help with our 
existing technology, but we have also, as the Chairwoman has 
mentioned in her statement, isolated the premium processing 
revenue to be able to devote that to our business 
transformation program.
    Mr. King. Thank you.
    I yield back.
    Ms. Lofgren. Thank you.
    I would like to recognize now the Chairman of the full 
Committee, Mr. Conyers.
    Mr. Conyers. Thank you, ma'am.
    What we are saying now is that the Statue of Liberty lifts 
her lamp beside the golden door, to welcome those who would 
love to come here. And with the other, she roots around in the 
immigrants pockets, while plucking out bills. Not an appealing 
image.
    I am trying to find out, Madam Chair, whether this agency 
is distinctive in the Federal system for being dependent on the 
fees it collects to do business.
    Because the worst-case scenario--and this is my question: 
What if you don't get this increase, gentlemen?
    To be honest with you--and you have been working this area 
longer than me, but it doesn't look like there is going to be 
an eager rush to support these massive increases. What do you 
do then?
    Mr. Gonzalez. Sir, Mr. Chairman, I will be honest with you. 
If we don't get this fee increase, if we don't get this 
revenue, we are simply not going to be able to keep up with our 
workload.
    Mr. Conyers. But you are not already. I mean, look, we 
know--and I am not blaming you, because I have been warned by 
the Subcommittee Chair, it is not your fault. This thing has 
been in disarray for years, sir.
    So if that is all that is going to happen, you mean things 
will stay the same as they are.
    Mr. Gonzalez. Sir, with all due respect, we have made some, 
I think, sincere, genuine and very positive improvements over 
the last several years.
    Right up front, we eliminated a backlog that stood at 
nearly 4 million files. We have increased our processing. We 
have new business models. We have stood up national security 
infrastructure. We are a more secure and we are a more 
customer-savvy organization than we were years ago.
    I will grant you that this is not the agency that I would 
like to see. This is an agency that is in transition. This is 
an agency that needs to be better than it is now. We have 
addressed the past deficiencies with the limited resources that 
were allocated to us under old cost models.
    My point is that immigration, quite frankly, is a growth 
industry. You are right. Our applications are increasing, but 
you know what? Our organization is static. Our personnel is 
static. We have increasing demands on our budget.
    If we do not get the revenue that we seek--and I will be 
very honest with you, sir--if we don't get all of the revenue 
that we seek, we won't be able to keep up our workload. We are 
going to see humongous backlogs. We are going to be suffering, 
from a national security perspective. And we are going to be 
back to where we were 5 or 10 years ago.
    My proposal, our proposal as an agency, is to be able to 
take this agency to where it needs to be prospectively. We are 
trying to address the gaps that everybody knows are out there.
    Mr. Conyers. Okay. I just left the Chairman of the Budget 
Committee and Appropriations Committee. We don't do the 
appropriations authorizations here. We just listen to the case 
and make recommendations that go to the Committees.
    But you would be one of the few people that come to the 
Congress to say, if you don't get what you demand, you are out 
of business, and that you have to get it all. I want to be the 
first to send my condolences to you, because in the state that 
we are in fiscally, it is hard for me to imagine anybody that 
is going to get what they want.
    We have Katrina victims out there. We have the public 
education system billions short. We have a budget 
recommendation where there have been cuts, and programs not 
just cut but eliminated.
    So if you are here to tell us it has to be all or nothing 
at all, I will be the first to send you whatever kind of cards 
they sell in a drugstore for this kind of activity--not a 
Valentine's Day card. [Laughter.]
    Mr. Gonzalez. If I may, it isn't an all-or-nothing 
approach, but it is incumbent upon me, as the Director of the 
agency, to put forward what our resource requirements are.
    To answer the first part of your question, we are 99 
percent fee-based. As a result, we have to generate the income 
to keep the agency not only afloat but moving forward.
    It isn't my coming here to say I have to have everything or 
else, but I do need to be honest with you and sensitize you to 
the fact that, as an agency that has not been the most 
efficient in the past, those inefficiencies could very well 
come back to us sooner rather than later if we are not afforded 
the opportunity to recover the full cost of doing business.
    Ms. Lofgren. Thank you.
    I would now recognize the gentleman from California, Mr. 
Lungren, for 5 minutes.
    Mr. Lungren. Thank you very much, Madam Chairman.
    Thank you, Dr. Gonzalez, for appearing before us and for 
the work that you do and for your volunteering to take on a 
tough task.
    I might just say, the comments of the gentleman from 
Michigan, the Chairman, made your case. He suggested that you 
are not going to get any money anywhere else. He suggested that 
the budget is so tight, you can't look for another dollar going 
to your agency. So it sounds to me like you have come up with 
the proposal to make your operation work.
    I started on the Subcommittee in 1979, and recall--well, 
let me just ask you. In the 1980's, as I recall, when you went 
to one of the INS offices for service, you were directed to 
people who had their files in shoeboxes. Do you still have that 
filing system?
    Mr. Gonzalez. Sir, I hope not, but, no, we do not. 
Nevertheless, we are still a paper-based agency, by and large.
    Mr. Lungren. But in the 1980's, I recall particularly--I 
used to represent a district in southern California--people had 
to show up starting at 4 in the morning to try and get in line, 
and the line would go around the Federal office building in Los 
Angeles at least once, if not twice.
    Is that still the case?
    Mr. Gonzalez. No, sir. Those lines are gone. We have gone 
to something called InfoPass, where people can actually go 
online and request an appointment at a certain hour, and they 
are seen. So the lines have virtually disappeared.
    But we also accommodate folks that need to come in, that 
don't have an appointment, as walk-ins. It may take a little 
longer to be seen, but we don't have those wrap-around-the-
corner lines.
    Mr. Lungren. In the 1980's, as part of the delegation from 
southern California, we were informed by the INS that we got 1 
day that they would look at the cases for our constituents, and 
that was the 1 day they worked on cases from anybody from our 
district.
    Is that still the way that you operate?
    Mr. Gonzalez. Sir, our district officers work any number of 
cases, usually 12 to 15 cases a day. So it is a full workload.
    Mr. Lungren. For most of at least the last quarter of the 
last century, if not the last half of the last century, you 
folks were considered the backwater, that is the INS, of 
service within the Federal agencies and departments. Are you 
still considered that?
    Mr. Gonzalez. Sir, I would hope not. I consider us to be in 
the forefront, quite frankly, of the Department of Homeland 
Security.
    We have a role to play in Homeland Security, and there is a 
reason why USCIS is in Homeland Security. We not only have a 
service mission, but we also have a national security mission.
    A lot of the things that we are asking for in our fee 
review reflect that fact, and we want to expand on that to make 
sure that we are equal partners, not only within the Department 
of Homeland Security, but throughout the U.S. Government, in 
national security.
    Mr. Lungren. Have the improvements since the 1980's cost 
money?
    Mr. Gonzalez. Yes, sir.
    Mr. Lungren. Are you where you need to be?
    Mr. Gonzalez. Negative, sir.
    Mr. Lungren. Is your technology where it needs to be?
    Mr. Gonzalez. Not at all, sir.
    Mr. Lungren. Are you going to be able to handle the 
increases that we are talking about in terms of workload, even 
without any changes in the law?
    Mr. Gonzalez. Sir, we are seeing those increases now, and 
we are handling them but not without difficulty.
    Mr. Lungren. What if we were to have a temporary worker 
program or program that did some kind of adjustment for people 
who have been here for a substantial period of time, which many 
people are talking about in terms of immigration reform? Can 
you handle that with the budget that you have? Or is the budget 
that you have based on the fees that you charge at the present 
time?
    Mr. Gonzalez. The budget that we have now is for the work 
that we have now. The budget that we are requesting is for the 
work that we are continuing to see increase. Any kind of a 
guest worker program, if enacted by Congress, would be funded 
separately from user fees.
    Mr. Lungren. Based on the fees that you have now, could you 
operate with the fees that you have now with the workload that 
you are anticipating?
    Mr. Gonzalez. No, sir.
    Mr. Lungren. I just hope Members of the Committee will 
recall the dire straits that the predecessor agency, the dire 
straits they were in for many, many years, and the terrible, 
terrible service given to people who were in this country on a 
legal basis, attempting to adjust their status, and all the 
interim benefits or services they would have. It was a 
disgrace. It was an absolute disgrace.
    So we may promise the promise at no cost, but we never made 
good on the promise. It didn't matter how many Members of 
Congress, Democrat and Republican--it didn't matter whether it 
was a Democrat or a Republican administration, we never got the 
kind of service that we wanted for our constituents. I would 
hope that, as we reflect on this, we reflect on how we get the 
kinds of monies into this system that are necessary.
    Maybe I am old-fashioned, but I do believe one of the marks 
of responsibility is having people pay for what they get. In 
this particular area, I think we have to do it.
    It reminds me of when we had the legalization program under 
Simpson-Mazzoli. I was the Republican co-sponsor of that. We 
thought that most of the people who were going to partake in 
that could never trust the INS, and the INS wouldn't be 
involved in the program, and the fees were going to be too high 
and so forth. And it ended up we had the most successful 
legalization program in history.
    So we have good people in your operation, but I hope that 
we will give you the money that is necessary, and I hope we 
would understand the tremendous benefits that you give to 
people when you can actually do it, as opposed to a promise 
that is never kept.
    Thank you.
    Ms. Lofgren. Thank you, Mr. Lungren.
    Now, I would turn to our newest Member of the Committee, 
Mr. Gutierrez of Illinois, for 5 minutes.
    Mr. Gutierrez. Thank you very much. I want to say how 
delighted I am to join you, Madam Chairwoman, in the 
Subcommittee. I would like to thank you and Mr. Conyers for the 
help in securing the seat. I have been here 14 years in this 
Congress, and I can't be happier or more delighted than to join 
you here this afternoon.
    Welcome, Mr. Gonzalez.
    Mr. Gonzalez. Thank you, sir.
    Mr. Gutierrez. I would like to deal with two specific areas 
with you, in my 5 minutes.
    Dr. Gonzalez, on page 4894 of the proposed rule in the 
preamble, the agency states, ``Congressional requirement that 
your agency be self-funded from fees exists.''
    Are you required by law to recover all of the costs of the 
agency through fees? Or does it have the authority and 
discretion to develop a budget based on a sensible, fair and 
realistic balance of fees and appropriations?
    Mr. Gonzalez. Sir, I will answer that, and then I will pass 
it to my CFO.
    Mr. Gutierrez. I only have 5 minutes. I would really just 
like your answer.
    Mr. Gonzalez. We have received appropriations in the past. 
Those appropriations have been targeted for specific projects 
and programs. The most recent large appropriation we got 
expired in September. We are authorized to recover the costs.
    Mr. Gutierrez. I am sorry, because I only have 5 minutes, 
isn't it true that you are not required by law to have a fully 
fee-based operating agency and that you indeed may come to the 
Congress of the United States, and that you have in the past 
come to the Congress of the United States, to ask for money in 
order to operate your agency?
    Mr. Gonzalez. I believe the INA states that we are 
authorized to recover the full cost of doing----
    Mr. Gutierrez. Let me go to, then, section 286 of the 
Immigration Nationality Act, section M. It says, ``The fees for 
providing adjudication in naturalization service may be set at 
a level that will ensure recovery. Such fees may also be set at 
a level that will recover any additional costs associated with 
the administration of fees collected.''
    I have been here only 14 years, but one thing about this 
Congress, it understands the difference between ``must'' and 
``may.''
    Indeed, Mr. Gonzalez, isn't it true that in 1999, you 
received in funds from the Congress of the United States $552 
million; in 2000, $535 million; 2002, $632 million; 2003, $709 
million? As a matter of fact, last year you received $182 
million.
    Yet this year when you come before us, when you have these 
unprecedented fee increases, you are only asking for $30 
million, when indeed, over the last 10 years, you have received 
over $4 billion.
    So I guess you can ask for funds. Indeed, you have asked 
for funds in the past. Is that not true?
    Mr. Gonzalez. This agency has received appropriations. 
Since I have been here, I have not asked for an appropriation.
    Mr. Gutierrez. Okay, since you have been there, but you 
have during the last 10 years received over $4 billion, and you 
are asking for $30 million this year. Is that not true?
    Mr. Gonzalez. Yes.
    Mr. Gutierrez. You are asking. So you see, I just want to 
be absolutely clear, because I think it is extremely helpful to 
all of us to understand that you are not exclusively a fee-
based agency, that, indeed, you can come here.
    You said earlier that ``pass the bill on to the American 
taxpayers.''
    Mr. Gonzalez, how many legal permanent residents of the 
United States are there?
    Mr. Gonzalez. I believe the number is approximately 8 
million.
    Mr. Gutierrez. Approximately 8 million. Are all of them 
eligible to become citizens today?
    Mr. Gonzalez. Yes, sir.
    Mr. Gutierrez. Eight million. Do you consider them American 
taxpayers?
    Mr. Gonzalez. Yes, sir.
    Mr. Gutierrez. Okay. That is my point. They are American 
taxpayers. We are trying to distinguish between American 
taxpayers, all of us here, and all of the millions and millions 
of people that you have under your jurisdiction that are going 
to apply for American citizenship. Indeed, they are American 
taxpayers. So the distinction is that there is no distinction 
between them.
    I would just like to ask you, you know, I will share with 
you, as an American taxpayer, I bet that I represent the 
feelings and the views of the Members of this Committee on both 
sides of the aisle when I say the following.
    When a Cuban refugee arrives here, an asylee arrives here 
in the United States, I am happy to use my tax dollars when he 
flees a communistic society to come to the land of freedom. I 
am ready to pay tax dollars for that.
    Those 28,000 men in our armed forces? I am happy to use 
American tax dollars so that they don't have to, because they 
are in harm's way defending our freedom.
    Dr. Gonzalez, I think it is a good idea, and that these 
immigrants, many of them poor, not be burdened. Let's share it. 
Let's share it, because, indeed, they have no responsibility 
over that one issue.
    Thank you. I am sorry.
    Ms. Lofgren. That is all right.
    The gentleman's time has expired. I don't have a heavy hand 
on the gavel, but we would ask people to stay within their 5 
minutes.
    I would now recognize Mr. Gohmert of Texas for 5 minutes.
    Mr. Gohmert. Thank you, Madam Chair. I do appreciate the 
Chair having this hearing, and hopefully it will be the start 
of many more.
    With regard to the fees, I don't know what everybody else 
has been hearing here on the panel, but, Dr. Gonzalez, thanks 
for being here, but there is just so much frustration in the 
application process.
    The feeling that so many have is that they have to hire an 
attorney, they have to hire somebody to help them because it is 
just too cumbersome and, gee, it takes so long as it is, maybe 
if they pay $1,000 or $3,000 to a lawyer, maybe it will help 
them get through the process quicker.
    So I am having people that are trying to help family 
members come in, people that are trying to change their status 
who are here legally, all these folks contacting me in my 
office. And they are saying, ``Look, we wouldn't mind paying a 
higher fee, but we would like some action. We would rather pay 
that money to CIS than to have to pay a lawyer or somebody that 
is practicing law without a license,'' which is happening a 
great deal, or others acting like they are helping, some that 
don't know what they are doing other than taking people's money 
who feel desperate.
    So I am not as concerned about the amount of the increase 
if it could preclude the need to go hire additional help.
    I am also quite concerned, my office tells me that they 
have been advised by the Dallas CIS office that they have 
decided to cut the hours that they will accept calls from 
Members of Congress or their staffs, which is a little bit 
interesting for me. I guess we are getting pretty arrogant when 
we get to that point.
    And also, I don't have trouble making the fees high enough 
to where this agency self-funds, with the exception of those 
who come in that absolutely cannot help themselves, but we do 
want to help. So I am not as concerned with the fees as I am 
with what happens once the fees are there in place.
    My friend, the Chairman of the Committee, has pointed out 
that we are already not keeping up, and this is a concern I 
have. What does happen with the money if we give you all of 
these increases? And some of them, on a percentage basis, are 
pretty dramatic. Going from $200 to $440 is not all that much 
in the scheme of things if you are paying $1,000 to $3,000 to a 
lawyer. But what happens to that money?
    Anecdotally, I have one family that notified me--and I got 
involved last month--they have been trying to have their 
brother get into this country legally since, I believe, it is 
1996. After years of trying to push, he was finally notified in 
late 2001 that his application had been lost and he needed to 
reapply.
    He reapplied, and now that has been transferred from the 
Texas office to California. California says, ``Good news. We 
are working faster than the Texas office''--this was last 
month--``and we are now up to processing applications from June 
of 2001. So gosh, we may get to you in the next year.''
    That is not good news. I would hope that certainly we could 
do better.
    I am one of those that has been pushing for border 
security, but that has to go hand-in-hand with an immigration 
service that works, that processes these things.
    I was delighted to hear that we have made great 
improvements with regard to the security aspect. I know 
previously we have had problems with adjudicators who did not 
have the proper security clearance. Hopefully, money will go to 
help those adjudicate more quickly and access the files they 
need to access.
    But I would be curious to know what is going to happen with 
this money if you get everything that you are requesting? What 
assurance do we have that these applications are going to be 
handled quicker than 6 years?
    Mr. Gonzalez. Thank you, sir, for your questions. I will 
answer them all, not necessarily in order.
    With regards to the hours being cut in Dallas----
    Mr. Gohmert. We will deal with that, but I am more curious 
about----
    Mr. Gonzalez. I have my legislative director right behind 
me, so I am sure we will deal with that by the end of the day 
today.
    With regard to the issue of people having to hire attorneys 
and so forth, what we have included in this fee proposal are 
manageable metrics where we lay out what we are going to do 
with the money, how it will actually be seen by the applicant, 
how the processing times will improve not just in 2009, where 
we expect at least a 20 percent improvement across the board, 
but also some improvements in 2008, where we expect also 
quicker processing times for about one-third of our 
applications.
    This fee increase is targeted at those areas that are going 
to make us be able to do just what you just said: process 
things faster; process things in an I.T.-centric way; process 
them with efficiency, transparency, so people don't feel like 
they have waited for so long that they have to spend $3,000, 
$4,000, $5,000 on an attorney for an application that only cost 
$100.
    We took that into account because, quite frankly, those are 
some of the comments that we have heard.
    I will be honest with you, sir, I travel a lot. And every 
chance I go somewhere, I meet with not only members of the 
immigration lawyer communities but I also meet with immigrant 
advocates and NGOs and CBOs. A lot of them tell me, quite 
frankly--and I was surprised, to be honest--``We don't mind 
paying higher fees as long as we know where our application is, 
as long as we know it will be done in a predictable amount of 
time, and as long as we can get information about the status of 
it anytime we want.''
    Ms. Lofgren. Dr. Gonzalez?
    Mr. Gonzalez. Yes, ma'am?
    Ms. Lofgren. The time has expired. We are going to have a 
second round, I hope.
    Mr. Gohmert. I have to shoot out, but, Madam Chair, thank 
you for having the hearing. I would encourage us to raise the 
fees, but then, as I think you are going to be willing to do, 
have lots of oversight to make sure it gets spent wisely. Thank 
you.
    Ms. Lofgren. Thank you.
    I would now like to recognize the gentlelady from Texas, 
Ms. Jackson Lee, for 5 minutes.
    Ms. Jackson Lee. Thank you very much. I thank the 
Chairperson and the Ranking Member for this hearing.
    Dr. Gonzalez, as you well know, this Committee is about to 
venture on to a journey of reviewing and, I hope, overhauling 
the immigration system of America, with the idea of 
comprehensive immigration reform.
    It is my understanding that the Administration is 
supportive or interested in a comprehensive immigration reform 
approach to the system.
    Mr. Gonzalez. If I understand the question, are you saying 
that does the Administration approve our fee increase?
    Ms. Jackson Lee. I didn't use the word ``fee'' at all. I 
said, is the Administration interested in comprehensive 
immigration reform?
    Mr. Gonzalez. Absolutely.
    Ms. Jackson Lee. So as I look at the fees, the 
Administration is looking forward or forward-thinking as it 
relates to the potential increase, possibly, in applications 
and processes that may be put in place that may expand the 
types of individuals that will be able to apply for 
legalization or the expanded legal process, for example, more 
children, more families of individuals who have been waiting in 
line.
    The Administration is sort of looking forward that this may 
happen?
    Mr. Gonzalez. The Administration is exploring options to 
work with Congress on comprehensive reform, yes.
    Ms. Jackson Lee. But they are expecting the potential of an 
explosion in business?
    Mr. Gonzalez. Well, ``explosion,'' I think, would be a 
stretch. We see an increase and surge in business today, 
without comprehensive immigration reform.
    Ms. Jackson Lee. Well, then with comprehensive immigration 
reform, the term is accurate, ``explosion,'' a surge, then. Do 
you expect a surge?
    Mr. Gonzalez. Yes, ma'am.
    Ms. Jackson Lee. With that in mind, has the Administration 
then thought of the necessity of a revenue stream for a system 
that has the potential to grow? A revenue stream that would 
come from an appropriations process versus a fee process?
    Mr. Gonzalez. For the type of business that we do, I am 
still convinced that the best model for us is a fee-based 
process. A fee-based process allows us to adjust our workload, 
depending on these surges that you and I just talked about.
    My concern would be that any type of an appropriation would 
be a static amount which would not address the surges that we 
are seeing now. We want to be able to surge resource-wise as we 
surge with applicants.
    Ms. Jackson Lee. Let me give you an example of, I think, 
the challenges that we face with a total fee-based process. 
Just simply for individuals that are trying to status their 
children, and they are in the legal process, it moves from $255 
to $460. Typically, someone might have more than one child. So 
in essence, it is almost half, a 50 percent increase. It is not 
exactly a 50 percent increase.
    And so, the question becomes whether or not the actual 
system itself can handle an exponential increase in fees, 
because what this tends to mean is every series of years we 
will increase the fees--50 percent, 75 percent, 100 percent.
    So my question to you, would it not be feasible to assess 
how much additional money you would need to get ready for 
processing the millions of individuals that are already in the 
legal system as we speak, or possibly that you might be able to 
respond to the surge?
    Could you predict readily the kind of dollars you might 
need? In your argument, you would rather base it on the fee 
base, but the fee-based system may be uneven. It might not even 
meet your needs because you don't have an assessment of how 
many.
    Do you think this is the most accurate? Or do you think you 
could predict or project what kind of money you would need?
    Mr. Gonzalez. With the fee-based model, what it would do is 
it would give us the resources right as the application is 
coming in. So if our intake grows by 15 percent, we are going 
to be resourced for that, as opposed to if we have static 
funding or we make projections that maybe don't come to 
fruition, then we are looking at backlogs and inefficiencies 
and so forth.
    But with the fee-base that we propose, and which I still 
think works as the best model for an organization which 
essentially does services----
    Ms. Jackson Lee. If I may, Dr. Gonzalez, because my time is 
short. It does not take into consideration, however--your fee-
based system only takes into consideration the needs of the 
Government. It does not take into consideration the needs of 
the individuals applying nor the resources that you need to 
pre-train personnel to get them prepared to respond to this 
surge.
    So maybe it should be a combination of fees and revenue. I 
would like very much for you to consider that.
    Mr. Gonzalez. Yes, ma'am. Thank you very much.
    Ms. Jackson Lee. Thank you.
    Ms. Lofgren. Thank you.
    I would now turn to my colleague from California, Ms. 
Waters.
    Ms. Waters. Thank you very much, Madam Chairwoman.
    I am pleased to be on this Subcommittee and intend to spend 
a lot of time here. I am from California, and I have two 
individuals in my office who are dedicated to immigration 
problems, requests and assistance full-time.
    We know a lot about your agency. I am afraid I don't share 
the same description of your agency that you have put forth 
here today. We find that we are constantly trying to straighten 
out problems that were caused by the agency, by people who are 
processing who do not appear to know the law.
    And so, I am anxious, too, for some improvement in this 
agency.
    However, Madam Chair, I would like to just say that, along 
the thinking of Congresswoman Jackson Lee, I am simply not 
prepared to entertain any increase in fees unless and until we 
do comprehensive immigration reform. And then I think it makes 
good sense, better sense, to understand where we are.
    But since I know that you are going to continue to pursue 
this idea of having all of the services paid for through fees, 
have you considered that a large part of immigration reform may 
be a guest worker program?
    What about the employers who benefit from the immigrants 
who will be performing the work? Have you thought about asking 
them to share in this cost in any way?
    Mr. Gonzalez. Yes, ma'am. I would like to differentiate 
between a guest worker program, which for us would be another 
program that we would be doing, as opposed to what we are 
asking for today, which is to make our agency whole.
    Whether we have a guest worker program or not, what we are 
asking for today is to make our agency whole and to make it a 
professional agency so that you don't have the problems that 
you just told me about.
    Ms. Waters. Excuse me, but you do do employment 
authorization today?
    Mr. Gonzalez. We do, ma'am.
    Ms. Waters. And you do advance parole--two things that you 
said will benefit the applicant if you increase the fees. Is 
that right?
    Mr. Gonzalez. What we are saying is we will roll in the 
fee.
    Ms. Waters. I know what you are saying, but you talk about 
the benefit to the applicant----
    Mr. Gonzalez. Yes, ma'am.
    Ms. Waters [continuing]. If you increase the fees. I, kind 
of, beg to differ with you. I have worked on too many problems 
of people who are subject to the 3-to-10-year bar, prevented 
from re-entering the United States, despite the fact they have 
this advance parole approval. You don't even tell them, and you 
give them the approval, and then they can't get back in.
    So let me just put a pin in that, because I want to see how 
you respond to the idea that perhaps the beneficiaries of those 
who come to work somehow share in the costs in some way.
    Mr. Gonzalez. If I understand your question correctly, you 
are saying we should pass some of these increases to the 
businesses that benefit from the workers. Is that correct?
    Ms. Waters. I haven't said that you should. I am asking you 
have you thought about it.
    Mr. Gonzalez. Yes, ma'am, we have.
    Ms. Waters. And what have you done about it?
    Mr. Gonzalez. What we have concluded--and I will ask my 
colleague, Mr. Jones, to expand on it--quite frankly, the 
revenue is not there. Even if we increase those business-based 
petitions exponentially, it would not give us the revenue that 
we would need to move forward in the way we would want.
    Ms. Waters. Would a combination of that and some lesser 
increase give you the revenue that you would need? Of course it 
could. I mean, this is rhetorical. It is just a matter of how 
you assign additional fees to each. I mean, of course it could 
be.
    But go ahead. I want to hear what you have to say.
    Mr. Jones. It certainly could be something we would look 
at, but businesses now who petition for workers to come into 
the country also pay fees.
    Ms. Waters. Are you asking for an increase? Because the 
people who are now applicants also pay fees. You are asking 
them for an increase.
    Mr. Jones. Yes, ma'am.
    Ms. Waters. So you are asking for an increase on the 
business side?
    Mr. Jones. Yes, ma'am.
    Ms. Waters. How much?
    Mr. Jones. It varies by form type.
    Mr. Gonzalez. In fact, one of the most substantial 
increases is a business-related one. Do you have it there?
    Mr. Aytes. There are two primary forms that are used by the 
employer community. That is the I-129, which will be changed 
from $190 to $320; and the immigrant petition for an alien 
worker, which is an I-140. That will increase from $195 to 
$475. Those are where the employer is sponsoring the 
importation of the worker.
    Ms. Waters. So would you tell me what the mix is? What 
number are you trying to achieve? How much total increase to 
support your agency? I want to understand the balance between 
the request for increase, both on the applicant and on the 
business community.
    Mr. Aytes. In a very general sense, we are trying to charge 
each applicant, whether they be an employer or an individual, 
the cost of processing that application, not transfer in costs 
from one party to another, as a matter of equity, with the 
limited exception that the Director spoke of of fee waivers and 
a few applications where we have limited the increase.
    Ms. Waters. May I stop you for a second? Exactly how much 
money are you trying to raise in order to have a completely 
supported agency by fees?
    Mr. Jones. The change in prices results in $1.079 billion 
change in fees.
    Ms. Waters. And how much of that is assigned to the 
applicant and how much is assigned to the business community?
    Mr. Jones. I don't have it broken that way, but I could get 
that for you.
    Ms. Lofgren. The gentlelady's time has expired.
    If you could provide that information to the Committee, I 
hope we will have a second round.
    Thank you, Ms. Waters.
    Mr. Delahunt of Massachusetts is recognized for 5 minutes.
    Mr. Delahunt. Yes, thank you, Madam Chair.
    Has there ever been a study in terms of the benefit of 
expeditious processing, what it would translate into savings to 
the American taxpayer?
    Mr. Gonzalez. I am not aware of that, sir, no.
    Mr. Delahunt. Okay. It is kind of a cost-benefit analysis. 
In other words, a change in adjustment providing more 
employment opportunities, et cetera. You know, what does that 
really mean?
    In other words, there is a credit side and a debit side, I 
presume. Has there ever been any kind of a calculus trying to 
come up with a figure? In other words, well, I think that 
speaks for itself.
    I just want to note that the Ombudsman has done that study. 
Are you familiar with that?
    Mr. Aytes. We are familiar with the Ombudsman's study and 
his work, sir.
    Mr. Delahunt. Okay. Is there a number associated with that?
    Mr. Aytes. I don't have that number in front of me. His 
calculations talk about the extent to which processing could be 
modified and accelerated in a way, with some offsetting 
processing costs, not the impact on the general economy as a 
result of processing being done faster. He suggested some 
alternative models for how we could handle certain types of 
applications more quickly.
    Mr. Delahunt. Okay. Also, I think it was you--I don't know 
whether it was Mr. Jones or Mr. Gonzalez that talked about that 
this is being done in an effort now, despite the fact we just 
learned through the questioning of our colleague, Mr. 
Gutierrez, that over a period of time, I forget how many years, 
there was a $4 billion appropriation by Congress.
    In terms of equity--I forget which one of you used that--to 
recoup the cost of the processing, has there ever been any 
consideration given to another equitable formula which would be 
predicated on an ability to pay?
    I think there is data showing that some 36 percent of 
applicants have a household income of less than $25,000.
    Mr. Gonzalez. Sir, those who are unable to pay can apply 
for a waiver. In fact, last year we issued about 56,000 waivers 
of individuals that could show need.
    Mr. Delahunt. Out of how many requests?
    Mr. Aytes. We approved about 85 percent of the requests 
that we received.
    Mr. Delahunt. I am sorry?
    Mr. Aytes. We approved about 85 percent of the requests 
received.
    Mr. Delahunt. Out of the total pool, what does that 
represent, in terms of the number of applicants?
    Mr. Aytes. Far less than one-tenth of 1 percent.
    Mr. Delahunt. See, that is my problem. If you have 36 
percent of applicants that have household income of less than 
$25,000, we are talking numbers that are beyond their capacity 
to pay.
    I guess what I am suggesting is, has there been any 
consideration given to a fee system predicated on ability to 
pay? A sliding scale, if you will?
    Mr. Jones. When we first published the rule, we had members 
of the press, and we also talked to the CBOs, and both of those 
groups have raised that. We have talked about it internally. 
What we discussed, some of the operational challenges of that, 
it is basically then you are adjudicating twice on every 
application.
    You are going to have to adjudicate and determine whether 
or not this person, who is making this application, is in fact 
eligible for this reduction in price, because they provided you 
evidence that their income is what they say it is. And then you 
are going to have to adjudicate the underlying application or 
petition.
    Mr. Delahunt. Is it that much of an obstacle in terms of if 
somebody filed an income tax return, for example, okay? You 
know, and predicated on that, you have numbers to deal with.
    I mean, maybe there is something there that I am not 
factoring into the equation, but it doesn't sound like you used 
the term ``adjudication,'' I don't see somebody coming in with 
robes on and listening to testimony and issuing interlocutory 
decrees and orders. This is a computer spitting out a 
determination predicated on presumably a valid 1040.
    Mr. Jones. I apologize for being----
    Mr. Delahunt. No, I don't mean, you know----
    Mr. Jones. But in essence, part of the issue you would have 
is also the incidence of fraud and is the return that they 
provided you in fact a valid filed return.
    Mr. Delahunt. I understand, but, you know, when we are 
talking about fraud, we have a lot more serious problems than 
just misstating income on a 1040. My point is, somebody is 
earning a salary, who is the CEO of a German subsidiary, and 
has a net income of $2 million a year, I don't mind whacking 
him. I mean, we could beef that up pretty well if they--I yield 
to the Chairman.
    Ms. Lofgren. The gentleman's time has expired. We thank you 
for that.
    Mr. Gonzalez. Sir, your point is well-taken, and we will 
take it into account in our comments. I understand what you are 
asking.
    Ms. Lofgren. Thank you, Dr. Gonzalez.
    Now I would yield to the gentleman from Alabama, Mr. Davis, 
for 5 minutes.
    Mr. Davis. Thank you, Madam Chairwoman.
    I guess this is, kind of, a little bit perplexing to me, 
Dr. Gonzalez, gentlemen, about this whole line of questions is 
most of the points that Mr. Delahunt made are very good points. 
They are also, frankly, obvious points that you all do not seem 
to have thought a whole lot about until he questioned you about 
that. That is a little bit of a concern to me.
    Obviously, some people who apply for citizenship are very 
well-heeled economically. Some of them are dirt poor and are 
trying to find a country where they can feed their family. It 
doesn't take a genius to figure that out.
    So I would just start with the observation that I frankly 
don't understand why the agency seems to struggle to deal with 
the policy ramifications of a hardship exception.
    And then let me try to pin this to numbers a little bit. If 
I am reading this data from the Committee, the total filing fee 
for a family of four is around $3,760. Is that right?
    Mr. Aytes. For which application, sir?
    Mr. Davis. For a family of four, two parents, a 15-year-
old, an 11-year-old, filing fee for applications is around 
$3,760. Is that about right?
    Mr. Aytes. For certain applications, it may well be.
    Mr. Davis. What is the median income of people who make 
these applications?
    Mr. Aytes. Again, it varies by type of application.
    Mr. Davis. Well, somewhere, someone threw out the number 
$25,000. Where did that number come from?
    Well, let me take someone who is earning $25,000 a year--
$3,760 is a big chunk of money, frankly, to put this in very 
real terms. Most of us, I think, make $165,000 a year. If you 
asked any of us on this Committee to cut you a check for 
$3,760, I think we would think it was a pretty big chunk of 
money. So once again, there seems to be some disconnect here.
    What do you consider to be wage eligibility? You say you 
make a determination whether someone is able to pay. What 
amount of money do you consider someone to be making to be able 
to pay this fee?
    Mr. Aytes. Again, it varies by application. It really 
becomes a general public policy question of do you charge 
different individuals----
    Mr. Davis. No, that is not the question. The question is, 
if someone files a waiver, what is the income cutoff?
    Mr. Aytes. We usually look at the poverty level, 125 
percent above, if I recall correctly.
    Mr. Davis. Which is what number?
    Mr. Aytes. I don't have that number in front of me, sir.
    Mr. Davis. The poverty level, I guess, for a family of four 
today is around $25,000, isn't it?
    Mr. Aytes. It may well be.
    Mr. Davis. Let me ask you a fairly basic question. Most of 
the people who engage this immigration argument, most of the 
people on this Committee who like to argue about these things, 
they usually like to say immigration is a good thing; it is 
illegal immigration that we worry about. And a lot of the 
people who engage this issue like to say we want to do 
everything we can to get people incentives to play by the 
rules.
    Proposition one: If you have a very low-income family that 
is interested in finding a country where they have a better 
chance to feed their family, they are very, very poor folks. 
And you charge them a fee of around $3,760, are you not giving 
them an incentive to break the rules and to use the illegal 
route?
    Mr. Aytes. We don't believe so.
    Mr. Davis. Really?
    Mr. Aytes. Indeed, we do not, because the issue is if we do 
not fully recover the cost of the application, the charge, what 
it means is we create backlogs.
    Mr. Davis. Wait a minute. You are giving me an 
administrative reason that explains why you want the fees. I 
get all the bureaucratic reasons why you want more money. What 
I am trying to get at is, when you charge very poor people a 
fee, don't you provide them an incentive to do an end-around 
and to try to come here illegally?
    I don't think I am that smart. I don't think that that is 
that tough a question.
    Mr. Aytes. I think some people might reach that conclusion.
    Mr. Davis. And is that a good thing to do? I mean, 
shouldn't we be trying to fashion a system that doesn't create 
those kinds of incentives? Because legal immigration is a good 
thing. You all agree with that, right?
    Mr. Gonzalez. We only deal in legal----
    Mr. Davis. You only deal in legal immigration, and it is a 
good thing, right? Very poor people trying to come here for 
economic improvement, who are playing by the rules and filling 
out an application, that is a good thing, right? Yes or no
    And you all nod your head ``yes.'' If it is a good thing, 
shouldn't we be incentivizing them to play by the rules by 
carving out a hardship exception?
    Because I know it may be news to you gentlemen, but a very 
poor family that is trying to make choices about how they are 
going to feed their little children may not always make the 
same ethical calculus that you and I would make.
    So again, I would yield back my time, but it is just 
amazing to me that we are having an argument about whether or 
not there should be a hardship exception, when a lot of the 
people we are talking about who are applying are very poor 
people, and we are a country that is loaded with waivers of 
fees and hardship exceptions. You get a fee waiver if you fill 
out a gym application.
    Mr. Gonzalez. Sir, our rule allows for fee waivers, and we 
will entertain fee waives, and we fully expect that they will 
be larger----
    Mr. Davis. But not for very many people, apparently, Dr. 
Gonzalez.
    Mr. Gonzalez. Sir, that is an issue of an individual filing 
for that waiver. We expect----
    Mr. Davis. You said most of them who file don't get it, and 
you said that the income threshold apparently is one where a 
lot of poor people still don't get it.
    Mr. Gonzalez. Eighty-five percent of them who file do 
receive a waiver.
    Mr. Davis. Do receive them.
    Ms. Lofgren. The gentleman's time has expired.
    I now would like to recognize a new member of our 
Committee, Mr. Ellison of Minnesota, for 5 minutes.
    Mr. Ellison. Thank you, Madam Chair.
    One of the good things about going last is that most people 
will ask your questions. [Laughter.]
    Just to be clear, as I understood your point earlier, Dr. 
Gonzalez, about 56,000 people apply for a waiver. Is that 
right?
    Mr. Gonzalez. Yes, sir, last year, are the figures that we 
have.
    Mr. Ellison. And about 85 percent of those received a 
waiver?
    Mr. Gonzalez. Yes, sir.
    Mr. Ellison. Was that a complete waiver or just a partial 
waiver?
    Mr. Aytes. That was a full waiver of the fees that they 
charge, in addition to the waivers that we give on a class 
basis by not charging for an application, like asylum.
    Mr. Ellison. Okay. So that 85 percent includes asylum 
applicants?
    Mr. Aytes. No, that is where they have applied on an 
individual basis, asking ``waive my fee when you charge others 
for the same service.''
    Mr. Ellison. All right. What percentage does that 56,000 
represent of the total number of applications?
    Mr. Aytes. Far less than one-tenth of 1 percent.
    Mr. Ellison. One-tenth of 1 percent.
    Mr. Aytes. It is relative to 4.7 million applications that 
we project we will receive next year.
    Mr. Ellison. Okay. Now, I have a list here of fees. It is a 
schedule. Is this familiar to you gentlemen?
    I am assuming that every family member has to pay the fee. 
It is not one fee for a whole family. It is one fee per person. 
Am I right?
    Mr. Aytes. Typically, there are some applications where 
family members are included.
    Mr. Ellison. So, for example, what is the average 
application fee when you total up for a family? I mean, do you 
have a number as to how much average expenditure is for a 
family who is applying to come in under one of our----
    Mr. Aytes. It really varies by the service that they are 
requesting, sir.
    Mr. Ellison. Yes, but, I mean, you have an average. You 
could average these fees up and come up with what the average 
fee is.
    Mr. Aytes. Well, the fee to sponsor a relative is going to 
be $355. If that relative is overseas, they will have to apply 
for an immigrant visa, and they will have the cost of 
relocating their family to the United States. So this is one 
part of that total cost to them of immigrating.
    Mr. Ellison. When I say ``expenditure,'' what I mean is fee 
expenditure, not total cost to the family.
    Mr. Aytes. The fee on the relative, if the relative is 
overseas, would be $355 for our processing of their sponsorship 
petition.
    Mr. Ellison. How big are families that typically have to 
immigrate? Do you have an idea about how big the families are? 
Do they tend to be three family members or four?
    Mr. Aytes. They vary in size, sir.
    Mr. Ellison. Of course they do, but, I mean, you must know 
how big the average family is.
    Mr. Aytes. Off the top of my head, I couldn't tell you. It 
varies widely, based on family relationships.
    Mr. Ellison. So you don't know whether----
    Mr. Aytes. We have----
    Mr. Ellison [continuing]. Members of the family, you don't 
know that?
    Mr. Aytes. Not off the top of my head, sir, no.
    Mr. Ellison. Dr. Gonzalez?
    Mr. Gonzalez. No, sir.
    Mr. Ellison. All right. I guess what I am trying to get is 
what sort of financial impact are families that are trying to 
immigrate legally, what are they really going to be faced with? 
How are the fee increases really going to impact them?
    Let me ask this: Could you describe the application for a 
fee waiver? What sort of standards are applied in that case?
    Mr. Aytes. We are usually looking at things like poverty 
level and their income. We are also looking at fee waivers at 
whether or not prospectively in this rule that whether or not 
it is consistent with the service that they are applying for. 
If a father is filing to petition for his wife and his 
children, under the law he has to sign an affidavit of support 
committing to support them financially, if the need arises.
    And so a fee waiver, arguing that he is unable to pay the 
fee for a petition, brings into question his ability to support 
them financially once they arrive.
    Mr. Ellison. So application for a fee waiver could actually 
have a negative impact on their application to immigrate?
    Mr. Aytes. No, it would usually just be a question of the 
fee waiver itself, prospectively under this rule.
    Mr. Ellison. Okay. That is interesting. So what impact on 
your immigration application would saying that you are indigent 
have? Would it diminish your changes to have your application 
granted?
    Mr. Gonzalez. Since 85 percent or 86 percent are approved, 
so I would argue no.
    Mr. Ellison. Right. But I am going back to the gentleman's 
point about if you say that you are indigent, that might 
reflect poorly on your application. Is that right?
    Mr. Aytes. No, that is not correct. We would look at your 
request for a fee waiver in that light. We do not look at your 
economic situation with respect to the petition itself.
    Mr. Gonzalez. There would be an inconsistency. If you have 
to verify that you can support a family, why would you then 
want a waiver on the fee?
    Ms. Lofgren. The gentleman's time has expired. But we will 
have a second round of questions.
    Mr. Ellison. Could I at least get the last question?
    Ms. Lofgren. Since you are the newest member, yes.
    Mr. Ellison. Thank you. [Laughter.]
    So, for example, I am still not clear on the point you are 
making. You could have a job you expect to get to support your 
family, but don't have the money now to pay the fee. So I am 
trying to understand what you mean.
    Mr. Gonzalez. You have to file an affidavit which states 
that if you are bringing in a family member, that they will not 
be a public charge; that you will be able to provide for them. 
So it would be inconsistent if you file that affidavit, and at 
the same time ask for a waiver because you can't afford the 
application itself. That is what we are trying to address.
    Ms. Lofgren. I think this has been a very helpful exchange 
for me. As I was listening here, right now, if you have an 
income that is 125 percent of poverty, you can issue an 
affidavit of support.
    But the fee waiver really, that 125 percent threshold for a 
fee waiver is related to a much lower fee. So we may want to 
take a look at what is the threshold for the waiver with 
greatly increased fees as part of this whole issue.
    I want to talk also about something that has not been 
discussed, which is--and the other thing, if I understand it, 
the I-485 does not have a waiver provision at all under this 
new rule. I think that is something we might consider--since 
that is a very high fee for a family of four. I mean, it could 
go for a family of four, it would be $5,000, with the 
biometrics. That is a chunk out of anybody's monthly budget. It 
would be out of mine, and we Members of Congress earn more than 
125 percent of poverty.
    So I think when we need a waiver, that shouldn't be 
excluded.
    Mr. Gonzalez. That is a good point, Madam Chair, and we 
will certainly consider that.
    Ms. Lofgren. I want to talk about citizenship as well, 
because if you are a legal permanent resident, you don't have 
to become a citizen.
    Mr. Gonzalez. No, ma'am.
    Ms. Lofgren. But if you want to become a citizen and you 
want to become fully American, we want you to do that. That is 
the beauty and the genius of America, is that people come from 
other countries to become Americans with us.
    The doubling of that fee does concern me in that it might 
deter some, especially people who are working people, who are 
going to be just as good Americans as entrepreneurs, from 
taking that step that they might want to do.
    So I really think we need to take a hard look at the impact 
of deterring what we want, which is assimilation of people who 
want to be patriotic Americans with us.
    I want to also--and I have gotten some feedback. People are 
very interested in how the money is going to be spent. I will 
tell you, I want the agency to modernize. I know that you do, 
as well. We want to create an efficient system.
    I am trying to figure out the budget issues. The premium 
processing fee, which is $1,000, if memory serves me right, was 
to be used to provide premium process services to business 
customers and also ``to make infrastructure improvements in the 
adjudication and customer service processes under the INA.''
    Now, in the rule you say that the premium processing monies 
for regular operations has been used for regular operations, 
not connected to either of the things in the statue. And I am 
not being pejorative about this; I am just quoting the rule.
    So I am trying to figure, we had an appropriation of $115 
million in 2006, basically for infrastructure improvement and 
backlog reduction; $182 million in 2007 for that same purpose. 
And now we have requested $30 million, which I think is 
primarily for a Basic Pilot.
    The question is, if we had to use the premium processing 
funds just for basic operations and we still have this need for 
the infrastructure upgrade and maybe even backlog reduction, 
are we out of the woods on what Congress wanted to do with 
these special appropriations? Or don't we just need to do--
maybe we need to do some of these fees.
    I am not saying otherwise, but don't we need to look at the 
national interest, as we did in the last two Congresses, to 
achieve what Congress wanted to do. What happened to the money? 
I am not even saying it was the wrong thing, but how did this 
happen so that we ended up in this situation?
    Mr. Jones. There are couple of things I would say in 
response to your questions.
    First, the statute does read as you say it did for premium 
processing and the use of those funds. We have used them for 
some improvements. But the distinction we are making in this 
rule is we have used them for some improvements to our existing 
systems.
    I will give you an example. Right now, the main system we 
use to track our cases, is called Claims III, you would think 
is some big national system that you can look at.
    Ms. Lofgren. I don't.
    Mr. Jones. Well, some people might, but it is not. It is a 
series of about seven regional systems that sort of feeds 
into----
    Ms. Lofgren. So you just messed with your antiquated 
system. You haven't upgraded to a new system.
    Mr. Jones [continuing]. As opposed to totally revamping 
what some people call the ``forklift'' approach, reach in, take 
out the old stuff, throw that away and replace it with a new 
infrastructure. We haven't been able to do that because of a 
problem in the base price structure.
    The second thing about the appropriations that we have 
gotten. In 2006, for example, most of the resources were for 
backlog reduction. We did have a small piece of appropriated 
resource for what we call our digitization program, which is 
digitizing alien files, A-files. In 2007, most of the resources 
are really for the expanded basic pilot.
    Ms. Lofgren. So it wasn't for the----
    Mr. Jones. Correct. It is not for sort of ongoing 
operations. That is what the $30 million in 2008 is for.
    Ms. Lofgren. My time has expired, but I think, based on 
comments--and unfortunately the Ranking Member had a meeting 
with a Cabinet Secretary that he couldn't skip, so certainly we 
understand that.
    But I think there is some interest in understanding on the 
part of the whole Committee where the money is going and where 
we are, and what mix of appropriations and fees would be 
appropriate to get us where we need to go.
    At this point, I would recognize Mr. Gutierrez for 5 
minutes.
    Mr. Gutierrez. Thank you very much.
    I would like to just go a little bit into another part.
    Dr. Gonzalez, is it not true that by statute, anybody that 
is in the backlog are those who have made application to your 
department, that have not been acted on successfully after 6 
months?
    Mr. Gonzalez. That is what we consider a backlog, correct.
    Mr. Gutierrez. So how many applications are there in the 
backlog, considering that definition? Because I read another 
definition that you and your staff put together, that is 
different than the Federal statute on backlogs.
    Mr. Gonzalez. The backlog that we own right now, that is, 
it is ours and we can actually do something about it. I have a 
corrected number. I believe it was 65,000.
    Mr. Gutierrez. So there aren't a million applications over 
in your department that have not been acted on past the 6 
months?
    Mr. Gonzalez. There are other applications that have not 
been acted on, but for reasons external to our department.
    Mr. Gutierrez. Okay. I guess, just following my line of 
questioning before, because you came before us and said, ``We 
are a fee-driven agency,'' and yet we found $4 billion your 
agency has received through authorizations of the Congress of 
the United States during the last 10 years.
    Mr. Gonzalez. For specific projects, correct.
    Mr. Gutierrez. Okay, for specific projects. And indeed, 
this year you are asking for $30 million in excess. So you are 
asking for money to run your agency that is not fee-driven.
    So now that we have cleared up that part, because I think 
it is very important if we are going to do our work and we are 
going to help you, because I know that the members of this 
Committee want you to be successful, and for your agency to be 
successful, we need to clear that up.
    I want to just clear up the backlog. Using the definition 
of those that have applied for a service, and that have not 
received a successful completion after 6 months, we have agree 
that that is basically the statute, how many people have made 
an application to your agency that are in the backlog? 
Notwithstanding the exclusions that you make subsequent, but 
using that statute.
    Mr. Gonzalez. That is a fair question.
    Mr. Aytes. It is a fair question. If you count those folks 
where we have gone back to them and asked for more information, 
or where a statute says that they will not be able to immigrate 
for some years into the future, we would have 1.1 million, 
according to that calculation.
    Mr. Gutierrez. Okay. And that would be the calculation 
using the statute, as defined by Federal statute, by the 
Congress of the United States, that 6 months or more.
    And the reason I think I believe, Dr. Gonzalez, that it is 
valid for you to explain why the way we have federally 
described what is a backlog might be different than what you 
want to come before the Committee in terms of a backlog. I 
really do understand that.
    But I think if we hear it is 65,000, when indeed it is over 
one million, then we need to know that, because that really 
gives us the true scope of the issue that you are confronting.
    Let me just put it to you this way, if you are having 
trouble with the FBI--that is, you do not control the FBI 
fingerprinting check; it is outside, externally, so you exclude 
them from your backlog--I think we need to know that so that we 
can deal with the FBI.
    Mr. Gonzalez. Just to give you some categories--and, by the 
way, the 6 months is not statutory. It is what the President 
has asked us to do and is what we have imposed on ourselves.
    But as far as what you called the ``gross'' backlog--and 
that is a fair question--there are immigrant petitions for 
countries that are over-subscribed. So if you are from a 
particular country, you could be waiting 10, 15, 16 years to 
immigrate to the United States.
    Mr. Gutierrez. And because my time is running out, I just 
want to suggest to you, if you could give us--as the President 
of the United States who you work for, has described the 
backlog as being anything after 6 months--if you could just 
give us, I think it would be extremely good for our Committee 
to know how many people have made a petition for a relative in 
a country where visas do not exist. I would like to know that, 
because those are part of the backlog, according to the 
President of the United States.
    [The material requested by Mr. Gutierrez was provided but 
is not reprinted here. The material is on file and available at 
the Subcommittee.]
    Mr. Gutierrez. I want to know FBI fingerprinting, where the 
delay is there so that we can address that. Names, I know that 
names, because I don't know if you have, but I have showed up 
at the airport and I have to show extra I.D.s because of my 
name.
    Mr. Gonzalez. Me, too.
    Mr. Gutierrez. You, too. So we get into this name thing. I 
would like to know who those people are so that we could 
address that.
    And lastly, I just want to close with this. Earlier it was 
said that this is a good deal because a coyote charges $2,500 
and you guys only charge less than $1,000. Right? It is a good 
deal relative to what a coyote charges.
    I just want to say, Mr. Gonzalez, and maybe you could 
respond if you wish, that those kinds of analogies are just, A, 
not relevant and really do a disservice. Because I am a Member 
of the Financial Services Committee, and if a constituent of 
mine came and said, ``The bank charged me this extraordinary 
exorbitant interest,'' I wouldn't say back to them, ``Well, you 
know, a loan shark from the mob would have charged you more.'' 
I don't think that would have been an excuse.
    So if you could just comment on coyote versus what you 
charge. Do you really want to be compared to coyotes?
    Mr. Gonzalez. Sir, I will get to your first point. We 
provide Congress with quarterly reports on all of those 
categories that you mentioned. I will make sure that you get a 
full list of all the packets we have provided.
    I don't know any coyotes and I don't know what they charge, 
so I would be remiss if----
    Ms. Lofgren. We don't either.
    Mr. Gutierrez. We don't either, but the gentleman from Iowa 
seems to know. [Laughter.]
    Mr. Gonzalez. But I will tell you, sir--and again, I am 
sorry if I am over my time, but I do meet with people in the 
communities, and I have been heartened by the fact that even 
people that don't like the size of the fee increase will come 
up to me and say, ``I understand why you are doing it. We 
understand. What we want is service. What we want is 
transparency. We want somebody to answer the phone and talk to 
me about the status of my application.''
    So in that regard, I do think that what we provide is of 
great value.
    Ms. Lofgren. The gentleman's time has expired.
    Mr. Gonzalez. Pardon me, ma'am.
    Ms. Lofgren. That is all right. We have a second round.
    Mr. Davis of Alabama for 5 minutes.
    Mr. Davis. Two points, Dr. Gonzalez. I hadn't planned to 
make the first one, but your comments led me there.
    Yes, I understand your point that people say, ``I am 
willing to pay more to get better service.'' Most Government 
agencies, we kind of assume that good service is a function of 
what they do and not a function of what we pay. So I am not 
sure that is a good analogy either.
    But I want to go back to this point again, because there is 
something about your numbers that does not add up to me. Did 
you represent earlier that only one-tenth of 1 percent of the 
applicants receive a hardship waiver?
    Mr. Gonzalez. No.
    Mr. Davis. Okay. Tell me what the one-tenth of 1 percent 
represents?
    Mr. Gonzalez. The total number of waivers submitted, as 
opposed to the total number of application benefits submitted.
    Mr. Davis. All right. What is not adding up to me, if your 
threshold level for a waiver if 125 percent of poverty, are you 
representing that that small a fraction of people who apply are 
in the 125 percent of poverty category?
    Mr. Aytes. What we are representing is that is the number 
of applications that we receive for a fee waiver.
    Mr. Davis. This is what that suggests to me, that there are 
probably a large pool of applicants who are eligible for a fee 
waiver, who are never making the application. Does that sound 
reasonable to you? Otherwise, you have an incredibly well-
heeled group of people who are seeking to come to this country, 
and I don't think that is the case.
    Mr. Gonzalez. Sir, our waiver policies are very public. 
People know about them.
    Mr. Davis. But do you get my point, Dr. Gonzalez?
    Mr. Gonzalez. I get your point completely, and we are 
prepared for an increase in waiver requests under our new fee 
structure.
    Mr. Davis. Again, this is the point that I am making to 
you. If I am understanding you correctly, and tell me if I am 
not understanding you, a very small number of people make an 
application for a hardship waiver. Is that accurate?
    Mr. Gonzalez. That would be accurate, yes.
    Mr. Davis. And that is around what percentage again, who 
even make the application?
    Mr. Gonzalez. Less than one-tenth----
    Mr. Davis. Less than one-tenth. And the application 
threshold is 125 percent of poverty. Is that right?
    Mr. Gonzalez. Correct.
    Mr. Davis. Surely you are not representing to me that only 
one-tenth of 1 percent of the 1 million-plus people are in that 
zone of 125 percent of poverty? You are not suggesting that 
this is that well-heeled a group. It couldn't be.
    Mr. Gonzalez. That is not our intention, no.
    Mr. Davis. Of course not. So there obviously is a 
significant problem with people who are eligible for hardships, 
not knowing about it.
    And that takes us back to Mr. Gutierrez's point and the 
point of others. If you have a fee-based system, it is 
requiring some people to pay who can't do it. It also appears 
it is requiring some people to pay who are hardship-eligible 
but simply don't take advantage of it.
    So given that those kinds of inequities appear to be woven 
into the system, that appears to be a very powerful public 
policy argument for moving away from a fee-based system. That 
is the point that a lot of us are making.
    The second point, and this is the last point that I will 
make today, is Mr. Delahunt's point is eminently sensible. Any 
fee-based system ought to be based on how much money you are 
making. If you are well-heeled, you ought to be paying a good 
fee. If you are not, you shouldn't be.
    And it shouldn't be a function of whether you filled out a 
hardship waiver. You know, that would be like saying that, 
``Well, we are going to tax very poor people, but we will give 
them a big deduction.'' No, you don't tax them in the first 
place most of the time. So there is a basic equity issue.
    And once again, that we are having an argument about this 
seems a little bit counterintuitive, given the emphasis that 
the President places on the value of legal immigration. Mr. 
Conyers touched on this earlier.
    It would be a wonderful point for the President to say, 
``We value people who play by the rules so much that if they 
are hard-working and struggling and not making a lot of money, 
we are not going to charge them anything. We will treat that as 
a service that their Government provides, because that is a 
value in its own right.''
    And I yield back my time.
    Ms. Lofgren. The gentleman from Minnesota, Mr. Ellison, for 
5 minutes.
    Mr. Ellison. Dr. Gonzalez, could you talk about the 
availability of (o-m)?
    Mr. Gonzalez. I can't talk about the availability for every 
applicant, but a large universe of our application pool goes 
through CBOs, NGOs. We provide information on waivers. I mean, 
the waiver information is out there.
    Now, are we making public service announcements? No. But 
the information is there. And, again, we fully expect a greater 
number of people to avail themselves to that waiver policy.
    Mr. Ellison. Because I am so limited in time (o-m)?
    Mr. Gonzalez. Yes, sir. Yes, it is.
    Mr. Ellison. (o-m)?
    Mr. Gonzalez. Our Web site right now is in English. We are 
in the process right now of updating our Web site in multiple 
languages. We just launched a new Web site this past October 
which is much better than our old one, and we are slowly 
building into it, but we expect to have different language 
fairly soon.
    Mr. Ellison. Okay. And also, you know, Congressman 
Gutierrez made an excellent point about the coyotes phenomenon, 
but you would agree, I mean, coyotes, they subject people to 
danger. We don't want to incentivize people to go to that 
illegal route, because it is dangerous. The people are 
exploited. It is against the law.
    Could you talk about how where you are, that it would be a 
bad idea to sort of create incentives so that people would not 
go through an illegal system?
    Mr. Gonzalez. Sir, as I mentioned before, this agency only 
deals with legal immigrations. We don't deal with coyotes. We 
don't have a border security function. It is clearly an issue 
for other agencies to address. But I will tell you that 
anecdotally and empirically, we have looked back at previous 
fee increases.
    What we have found is that there really isn't a major 
change. That is to say, you know, there might be a dip once 
that increase takes up, but then as it goes on, there is not a 
significant decrease in filings across the board when we have 
had this in the past.
    Mr. Ellison. That is a good point, Doctor. Let me ask you 
this: Have you ever had an increase this big before? I mean, I 
think the average is like a 66 percent increase across all the 
fee levels.
    Mr. Gonzalez. Back in the 1990's, the increase was actually 
higher than this.
    Mr. Ellison. I think your assistant knows more, Mr. 
Gonzalez.
    Mr. Jones. It was 76 percent, the last time there was a 
major fee study done for these activities, in 1998 by INS.
    Mr. Ellison. Thank you.
    Ms. Lofgren. Does the gentleman yield back?
    Mr. Ellison. Yes.
    Ms. Lofgren. I would like to thank you, Dr. Gonzalez, and 
your team for your testimony and for answering our many 
questions. Members may have additional questions for you, which 
we will forward and ask that you answer as promptly as you can, 
to be made part of the record.
    Given the upcoming recess and, without objection, the 
hearing record will remain open until the close of business 
next Wednesday, February 21, for submission of any additional 
materials.
    I think our hearing today has illuminated some of the 
potential problems with such large increases in immigration 
fees. We intend to give this proposal a careful look before it 
goes forward.
    I also think we have an opportunity to collaborate, to make 
sure that we have the resources necessary so that the agency 
can improve, as we all want, and yet we avoid unnecessary 
damage in ways that we don't want.
    So I am pleased that you spent so much time with us. I look 
forward to working with you as a partner in making sure that 
this whole function of immigration works well. I am confident 
that we will be successful in that effort.
    So thank you, Dr. Gonzalez.
    Mr. Gonzalez. Madam Chair, thank you very much.
    Just as our comment period, our ongoing dialogue with our 
stakeholders and applicants, we look forward to an ongoing 
dialogue with you and this Committee so that we can achieve 
what we all want, which is an Immigration Service that we can 
all be proud of.
    Thank you very much.
    Ms. Lofgren. Thank you very much.
    The hearing is adjourned.
    [Whereupon, at 4:12 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of the Honorable Barney Frank, a Representative in 
                Congress from the State of Massachusetts

    The recently proposed rule change at the Department of Homeland 
Security's Citizenship and Immigration Services (USCIS) should be 
rejected. Particularly unjustifiable is the fee increase for the I-485, 
the Application to Register or Adjust Status. The current fee of $325 
dollars will, under the Proposed Rule, be increased to $905.00, 
bringing the total fee for this form to $985.00 after inclusion of 
fingerprinting costs, which are borne by the applicant.
    The I-485 increase according to USCIS is justified to eliminate the 
interim benefits forms (I-765 employment and I-131 parole). USCIS 
claims that on average due to delays applicants apply for two 
employment cards, which cost $180 each, and an advance parole document, 
which costs $170 while an applicant waits for the processing of the I-
485. In my district this is rarely the case. Advanced parole is rarely 
applied for because most applicants have already accrued more than six 
months of illegal presence in the United States so that if they leave, 
even with advanced parole, they would trigger the bar to reentry for at 
least three years if not ten. Additionally the second employment card 
in the Boston region is only necessary for the I-485 applications that 
are stuck in the name/date of birth clearance with the FBI. Otherwise, 
the I-485 adjustments are taking on average less than six months for 
the Boston office. The second employment card processing time is taking 
more time than the immigrant visa interview.
    The proposed fee increases push the total cost of permanent 
residency--excluding the often unavoidable expense of attorney's fees--
to nearly $2,000. This places an undue burden on those immigrants 
seeking permanent status, who are often already in difficult financial 
circumstances.
    The justification given by the USCIS for this proposed increase is 
that the additional revenue is necessary to reduce processing delays, 
strengthen security and fraud prevention and investigation efforts, and 
to clear the extensive backlog of applications. This rationale, 
however, contains very serious flaws.
    In September of 2006, the USCIS announced the elimination of its 
backlog in naturalization applications. Although these efforts on the 
part of the USCIS are admirable, they only tell part of the story. The 
USCIS determines its backlog by counting only those applications that 
are ready for USCIS adjudication. However, all permanent resident and 
naturalization applications are subject to FBI review. Because those 
applications awaiting this review are not yet ready for adjudication, 
they are determined by the USCIS to be out of its control, and 
therefore are not reflected in its estimation of backlogged cases. 
Cases such as these are in no way rare. It would seem, therefore, 
somewhat disingenuous to call for a fee increase to support the 
elimination of a backlog which is largely--and by its own admission--
out of the control of the USCIS.
    Furthermore, in 2006, the USCIS received appropriated funds to 
address and eliminate its backlog. USCIS should spend these funds 
efficiently and not put very difficult financial obstacles in the way 
of immigrants who are complying with the law. Immigrants seeking to 
become fully legal members of our society are not undesirables and we 
should not be discouraging them from doing so.

  Letter to the Honorable Zoe Lofgren from the Honorable Joe Baca, a 
  Representative in Congress from the State of California, and Chair, 
                     Congressional Hispanic Caucus



   Letter to the Honorable Luis Gutierrez from the Honorable Emilio 
Gonzalez, Director, United States Citizenship and Immigration Services, 
                    Department of Homeland Security



   Chart outlining the Proposed Fee Increases of Employment Based v. 
    Family Based fees, submitted by the Honorable Emilio Gonzalez, 
     Director, United States Citizenship and Immigration Services, 
                    Department of Homeland Security


 United States Citizenship and Immigration Services Responses to Post-
  Hearing Questions posed by Chairwoman Zoe Lofgren and the Honorable 
                             Keith Ellison



                                 
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