* Bill sets up point system for skills, education, jobs
* Asians likely to benefit, Latin America seen losing out
* Some say visa shortage could encourage illegal immigrants
By Rachelle Younglai
WASHINGTON, May 5 (Reuters) - U.S. immigration authorities would give preference to better-educated and trained visa-seekers who can contribute to the American economy under a less-noticed provision of the immigration bill in the U.S. Congress.
The bi-partisan bill in the U.S. Senate would rewrite the half-century-old standards that control legal immigration to favor skills over family ties.
The winners of this proposed "merit-based" system, experts say, would be primarily from Asia, particularly from India, China and the Philippines, whose citizens are more likely to have attended college or have on-the-job training in skilled occupations such as engineering and technology. The losers are likely to be Mexicans and Central Americans.
The new system, long advocated by economists and politicians who believe the main purpose of immigration laws should be to serve economic growth, would replace one geared mainly to reuniting families.
As an example, an engineering graduate from India would have a better chance of immigrating to the United States than the grandmother of a naturalized U.S. citizen who does not speak English.
The best known provisions of the Senate bill would provide a path to legal status for roughly 11 million undocumented immigrants currently living in the United States, reinforce U.S. borders to control the flow of future illegal immigrants, and establish a new system for temporary "guest workers" to meet the needs of employers seeking lower-skilled workers.
So far, those are the most controversial elements of the bill, which is scheduled for consideration next week in the Senate Judiciary Committee, the first step in a prolonged debate in the Senate and the U.S. House of Representatives.
The merit-based approach may provoke a fight as well.
Currently, most foreigners can only get a green card - which allows them to stay and work in the United States - if an immediate family member or company sponsors them. Cubans and refugees are admitted under different programs.
The bill proposed by four Democrats and four Republicans would make it harder for the siblings and adult children of U.S. citizens to get permanent residence visas, or green cards. The legislation would also eliminate "diversity" green cards, which has helped Africans immigrate to the United States.
But the bill would create another way to get a green card, where immigrants would be awarded the most points based on their level of education, employment experience, entrepreneurship in business, English language proficiency and family ties.
"Our immigration system has been holding us back," said Lanae Erickson Hatalsky, social policy director with the centrist Third Way think tank. "It has not been set up to make U.S. economic growth our priority and this is a huge step in that direction."
Foreigners would be awarded 15 points for a doctorate degree and another 10 points if they had a full-time job in the United States, according to the bill. They could also score two points for every year they were lawfully employed in the United States and another 10 points for speaking and writing English fluently.
Merit-based visas would go first to applicants with the highest number of points.
"People are going to rack up a lot of points through education and employment," said Jen Smyers, associate director for immigration and refugee policy with humanitarian group Church World Service. "What does that mean for someone who needs their sibling to be here because they are facing trauma? What does it mean for a woman in Iran who does not have education opportunities?"
Church World Service, the AFL-CIO union and other groups are urging senators not to reduce family reunification visas.
If enacted, the bill would align the United States with countries like Canada and Australia that use a points system to attract skilled, educated workers.
The Republican administration of George W. Bush seized on the idea of using immigration as an economic policy tool. But it failed in 2007 to pass a broad immigration bill that would have provided a path to citizenship for illegal immigrants and would have shifted the bulk of future immigrants to a points system.
At the time, President Barack Obama, who was then a freshman Democratic senator, said it did not "reflect how much Americans value the family ties that bind people to their brothers and sisters or to their parents."
Obama has so far praised the Senate bill and has not taken a position on the merit-based system.
The last time the U.S. immigration system was changed substantially was in 1986. The legislation legalized the three-to-five million illegal immigrants in the country, the majority from Mexico. But it failed to create new avenues for foreigners to come to United States legally.
One concern about the new approach is that the country could find itself unintentionally leaving gaps in low-skilled jobs.
By 2020, the U.S. economy will need at least three million additional workers to care for the elderly, do construction jobs, and prepare food, among other lower-skilled jobs, according to data from the Department of Labor.
As the U.S. population ages, demand for home health and personal care aides is expected to increase considerably, the department said in its occupational outlook.
"The number of authorized migration slots doesn't come close to meeting the needs of the economy," said Michael Clemens, an economist and senior fellow with the Center for Global Development think tank. "Employers will once again be forced to resort to black-market employment to fuel the economy."
The new system could also favor men over women.
"The point system favors people who have had access to education and work in the formal labor sector," said an analysis by the National Immigration Law Center. "Many women - who are often caregivers and caretakers for family members - and low-wage workers will have difficulty qualifying for a visa."
It is difficult to gauge at this stage the extent to which the merit-based system might complicate passage of the bill.
Industry and organized labor have so far focused most of their attention on guest-worker provisions and increases under the bill in allocations of so-called non-immigrant H-1B visas for specialty occupations. (Reporting by Rachelle Younglai; Editing by Fred Barbash and Claudia Parsons)