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If you remove the path from H1-B to residency, you reduce the incentive for a lot of people to go through the H1-B hell to begin with.

Speaking personally, my Dad put me in a university in Canada instead of USA since the path to permanent immigration was so much smoother.

They've been limited in what changes to H1-b they can make without legislative support, so they will take any other option to make H1-b less desirable and harder.

Correct.