The problem lies in the sheer numbers. Let's assume, to keep things simple, that just half of all H-1B workers are going to apply for a Green Card. In the year 2000, the quota was 195,000. Half of them makes approximately 100,000 applicants for a green card. But that's not enough! Many of them are married and have children - and family members take up a slot in the green card quota, too (they don't take up a slot in the H-1B quota). Let's say that on average, there is just one additional family member coming along. So approximately 200,000 people actually need a green card. Alas - the worldwide employment-based quota is only 140,000. 60,000 people "spill over" into the next year. In 2001, the H-1B quota was the same - but 60,000 Green Cards were already used up by people who applied in 2000. So now 120,000 people have to spill into the next year.
In the past, this was not a problem. Dept. of Labor and INS were both so slow that only a few of the 200,000 or so annually people in the queue actually got to the point where they'd get a Green Card. Alas, both agencies made great strides in improving the processing times, releasing a deluge of applications all at once.
This is a simplified example (neglecting the country quotas and the individual employment-based categories). The actual numbers may not be accurate, either, since they are based on guesswork. But the general problem remains.
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