Americans would "be shocked to know that most of the H-1B visas are not going to companies like yours—they're going to these outsourcing companies," Durbin said.
Microsoft and other major tech companies have lobbied Congress for years to increase the number of H-1B visas available to highly-skilled and educated foreign workers. Tech companies have argued that they have thousands of open job positions, but cannot fill them due to a lack of U.S. job applicants with the requisite skills needed to fill these technical positions.
"We are not able to fill all the jobs that we are creating," Smith told the committee during his opening statements.
The new immigration proposal would increase the annual cap of H-1B visas to 135,000 from the current cap of 85,000.
Durbin said when he sat at the negotiating table with the other members of the Gang of Eight, he stressed that he would support increasing the number of H-1Bs available to highly-skilled workers "only if we offer the [available] job to an American first, at a reasonable wage, so [companies] have a change to fill that position, and if they can't, we bring in that talent."
In a back and forth exchange with Smith, Durbin asked if Microsoft believed its first responsibility is to hire an American worker.
Smith answered in the affirmative, but added that he wanted to "qualify" his answer "in one respect." If the top student in a Ph.D. program at a U.S. university that "is clearly the pioneer in her field" hails from China, "I want us to hire her," he said.
Durbin lauded a measure included in the Immigration Innovation Act introduced earlier this year that proposed to increase the fee that employers paid for H-1B visa applications. The additional money from that fee would go towards improving science, tech, math and engineering programs in the U.S. That measure was proposed by Microsoft last year.
"I think this notion of more homegrown American talent is something we all should applaud, and if that means charging a higher fee to bring in a foreign H-1B worker so we can create scholarship opportunities for American students to become tomorrow's engineers, I think that's what America want us to do," Durbin said.
During his testimony, Microsoft's Smith added that the new Senate bill makes important reforms to the H-1B program, such as increasing the annual visa cap and improving portability measures so H-1B workers can switch employers. Still, he noted that Microsoft has "some lingering concerns" about the current language in the bill in regards to the H-1B program.
But a couple other witnesses on the panel said the new Senate bill should include additional oversight and enforcement measures for H-1Bs.
Ron Hira, an associate professor at the Rochester Institute of Technology and a critic of the H-1B program, said the safeguards included in the Senate proposal "move in a positive direction, but the bill falls far short." He said Gang of Eight's proposal should include measures in a bill by Grassley and Sen. Sherrod BrownSherrod BrownThe Hill’s Whip List: Where Dems stand on Trump’s Supreme Court nominee Senators war over Wall Street during hearing for Trump's SEC pick Sanders to oppose Gorsuch's nomination MORE (D-Ohio) that intends to reduce the fraud and abuse within the H-1B program.
Hira argued that there should be a "good faith" requirement in the new Senate bill to ensure companies make a "good faith" effort to hire an American worker before applying to hire a foreign worker. He called the H-1B program "deeply flawed" and argued that several of the top 10 companies that receive H-1B visas have no intention to secure green cards for their workers.
Neeraj Gupta, CEO of Systems in Motion, said the U.S. is the largest market for offshore vendors and the majority of H-1B and L visas are used by these companies, largely to lower their operating costs. He noted that these IT services companies use the visas differently than other U.S. tech companies like Google and Microsoft do.
"The majority of the visas end up being used for the wrong purpose," Gupta said.