A controversial visa program that allows U.S. companies to hire foreign IT workers and other professionals has reached its cap for 2006 applications, a month and a half before the U.S. government's 2006 fiscal year begins.

The U.S. Citizenship and Immigration Services (USCIS) announced Friday that the 65,000-person cap on H1-B visas has been reached for 2006, and the agency would not process any applications received after Wednesday.

U.S. companies use H1-B visas to employ professionals with specialized skills, including computer engineers, teachers and nurses. Compete America, a coalition of more than 200 corporations, universities, research institutions and trade associations, said the USCIS announcement shows more H1-B visas are needed. After the U.S. government's 2003 fiscal year, in which 195,000 H1-B visas were allowed, the U.S. Congress let the H1-B cap fall back to its pre-dot-com-boom level of 65,000 applications.

The 2005 cap was reached on October 1, 2004, the first day of the U.S. government's 2005 fiscal year. Friday's USCIS announcement "indicates acceleration in the demand for highly educated foreign professionals who play an important role in keeping the U.S. economy growing and U.S. jobs in America," Compete America said in a press release.

Compete America doesn't advocate a fixed-number increase in H1-Bs, but instead a year-by-year approach, said Eric Thomas, a spokesman for the group. If the 65,000 cap is reached in the first quarter of the fiscal year, Congress should allow 20 percent more visas for the rest of the year, and continue with the higher cap in the next fiscal year, he said.

The Information Technology Association of America (ITAA), an IT trade group, also called for more H1-B visas. "We believe a significant increase is required to meet America's need for specialized skills and keep companies -- and as a result jobs for U.S. workers -- growing at a steady pace," said Bob Cohen, senior vice president at ITAA. "Other countries are realizing that talent does not recognize geographic borders or country of origin. If we want to be competitive on the world stage, our policymakers need to understand that too and raise the H-1B cap."

But other groups, including the Institute of Electrical and Electronics Engineers-USA (IEEE-USA), have accused the H1-B visa program of taking jobs away from U.S. IT workers. U.S. IT and electrotechnology professionals saw a 1.5 percent decrease in their salaries in 2003, the first decrease since IEEE-USA began surveying members in 1972, the group said in December. IEEE-USA blamed H1-B visas, outsourcing, and other factors for the salary decrease.

In addition, the overall number of people employed in computer-related occupations in the U.S. dropped by about 9,000 people from the first to second quarter of 2004, according to IEEE-USA. The 2.96 million computer-related jobs in the U.S. in the second quarter of 2004 compared to an average of 2.98 million during 2003, the group said.

Thomas disagreed that H1-B visas are hurting U.S. wages. "The wage charge is really a smokescreen," he said. "The government requires that H-1B employees be paid prevailing U.S. wages for their profession."

Having the 2006 H1-B cap reached is positive step for U.S. IT workers, IEEE-USA spokesman Chris McManes said. "This is really good news, because it opens up job opportunities for U.S. students," he said. "Hopefully, it means that U.S. employers will want to hire their home-grown U.S. students."

While the H1-B cap has been reached early in the past two years, McManes noted that a 20,000-person exemption, created by Congress in November 2004 for foreign students earning advanced degrees from U.S. universities, has not filled up. About 10,000 such application slots are still available for fiscal year 2005, which ends Sept. 30, and about 12,000 slots remain for fiscal year 2006, according to USCIS.

"If the demand was so great, so overwhelming, you'd figure that 20,000 would be gobbled up just like that," McManes said.