Historically our legal immigration system mainly existed to provide blue collar labor, although that was a past America where 70% of our jobs were in manufacturing so there was a real heavy demand for 19 century peasant workers and thus we had mass immigration until the turn of the 20th century.
After 1924 we adopted a quota system, based on national origin and 2% of any nation's existing population in the 1890 census. The main goal of that law was to maintain the ethnic composition of the country, as WASPs (basically Protestants of English/Germanic origin) were feeling like they were being ethnically replaced by Catholics, the Irish, Italians, and Eastern Europeans (prior to the 1924 law we took over 2 million immigrants annually) after the 1924 immigration law which limited immigration to a hard cap 150,000 a year we took well under 100k immigrants a year until the immigration reform in 1952 (increased to 270,000), and 1965 (which removed the national origins quotas, but reduced overall cap to 170,000).
So in theory, we are supposed to accept 170,000 legal immigrants a year. However the 1965 immigration law has a loophole that allows family members to chain migrate and those numbers don't fall under this "legal immigration cap", so the majority of our legal immigration is from a loophole in the law, and we accept over a 1 million legal immigrants a year due to this loophole. Illegal immigration is estimated at about 1.5 million a year. So currently we take about 15 times as many immigrants as people were led to believe when they passed the 1965 law...
Really we need overhaul our immigration laws, don't let people bring in everyone they are related to because that just promotes the creation of ethnic enclaves rather than promoting an assimilationist ethic. We should have a larger cap on legal immigration, say 300,000, but completely close off family migration except immediate nuclear family--wife and children only. And then enforce our laws on the Mexican border. Unfortunately, both parties want waves of cheap labor/votes so instead we have a country that will probably just collapse from overused social services before the close of the century.
I am not sure why you are calling it a loophole. It was purposefully designed that way. US immigration policy is based on family reunification. The mass immigration was just an unintended consequence of clueless politicians(much like the current unaccompanied minor problem is the unintended consequence of a law that had "good intentions").
Also you are off on how things work.
Only certain relatives can come over on an immigrants original petition(spouse/children). If they don't come over on the original petition they end up becoming a F2 preference, which can take years to be issued. Only US citizens can petition to have immediate relatives come over immediately. Immediate in this case being unmarried children under 21, spouses and parents. Other relatives(siblings and married children/children over 21_ fall under other F preference categories. All F categories have caps. That said people falling under immediate family of US citizens are not capped.
I am also not sure where you pulled the 170k figure from. Current caps are: Work Preference Visas = 140-160k(it fluctuates); Family Preference Visas = ~226k(it fluctuates, for which half are F2 preferences for spouses/children of LPRs). Then you have diversity visas(a random visa lottery) in the ~40k range, and special visas which are capped an insignificant level. Of course again US Citizen immediate relatives(spouses, parents, minor children) have no caps. So our current statutory visa limits are already well beyond your 300k limit even before we get to immediate relatives of US citizens and 75% of immediate relatives are spouses/children.
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