WASHINGTON – Congress is letting employers hire another 20,000 foreign high-tech workers under a special visa program after businesses reached the annual ceiling on the first day of the government’s fiscal year.

Businesses are limited to hiring no more than 65,000 workers annually through the H1-B visa program. They reached that figure in one day, Oct. 1, and immediately began complaining they would lose talented university graduates and potential employees to competitors overseas.

In response, as part of the $388 billion spending bill passed over the weekend and awaiting President Bush’s signature, Congress is exempting from the limit 20,000 foreign students with master’s degrees and higher from U.S. universities.

“This is a critical talent pool that American taxpayers have helped to educate,” said Sandra Boyd, who chairs the Compete America coalition that lobbied for the exemptions. “It’s counterproductive to educate these students and then force them abroad to compete against us.”

The coalition includes companies such as Microsoft, Texas Instruments, Hewlett-Packard and Motorola.

For example, of the 424 students who earned master’s degrees in engineering at the University of Texas at Austin last year, 228 were foreign students; of the 135 who earned doctorates in engineering, 81 were foreigners, Boyd said.

Dan Kane, a spokesman for the Homeland Security Department’s Citizenship and Immigration Service, said the exemptions for foreign students will be applicable this year. Rep. Lamar Smith, R-Texas, and Sen. Saxby Chambliss, R-Ga., led the effort to include them in the spending bill.

Kane said his agency will release details on how employers can apply for visas made available after Bush signs the bill, he said.

The popular H1-B visas are granted to foreigners in specialty professions such as architecture, engineering, medicine, biotechnology and computer programming. Under the program, employers must pay foreign workers the prevailing wage for their job fields and show that qualified U.S. workers are not being passed over.

Unions and other critics say the program allows businesses to fill jobs with cheaper foreign labor. Those who use the program say they can’t find enough Americans with the necessary math, science and engineering skills.

In addition, Congress doubled H1-B visa application fees from $1,000 to $2,000. Small businesses with fewer than 25 employees pay fees totaling $1,250 for each application. The legislation also expands the authority of the Department of Labor to investigate employers.

On a separate visa issue, Congress tightened rules for using L-1 visas, which allow companies to transfer employees from overseas offices to U.S. offices, while paying the employees their home country wages. Lawmakers had been suspicious that abuse in the program was putting Americans out of work.