You're referring to the provisonal waiver program which will allow (once USCIS begins accepting applications on march 4) you to apply for a waiver of unlawful presence in the us (showing extreme hardship to a us citizen spouse). You should be aware that you will still have to leave the country to finish processing and receive your visa, but at least you will know whether your waiver is approved before you decide to go.
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Such law just came out and will enter into effect on March 04, 2013. Go back to your lawyer for him to advice on the next steps.
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Because your husband entered illegally he cannot adjust his status here in the United States even though he has been granted deferred action. As stated by my colleagues he would still have to leave the United States (with the accompanying waiver) to adjust. There maybe other applications available to him but that needs to be discussed with an experienced immigration attorney.
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The new law will allow you to apply for the waiver while in the U.S., but your husband will still have to go to his interview abroad. I recommend that you start gathering any and all documentation that proves hardship to you, and visit your lawyer again.
On March 4 a new law will go into effect that will allow your husband to apply for a provisional waiver of ineligibility for illegal presence without first leaving the United States. The new law only covers waivers of ineligibility for illegal presence. If your husband has any other grounds of inadmissibility that are waiveable he will have to file his waiver application after he leaves the United States. An attorney should be able to get the necessary information from you that ne needs to advise you.
This response does not create an attorney client relationship and is for informational purposes only. Before acting on this information you should discuss your problem with an immigration attorney.
Given that he has deferred action and work authorization, and you have the baby, I recommend you consult with an experienced immigration attorney to determine if he qualifies for the waiver from within the U.S. There are factors that would allow him to get deferred action but that would still affect the waiver, such as prior immigration history. Considering there finally may be some movement in Congress, you might want to wait longer. He is allowed to be here and to work here, so there isn't a huge rush, right? I'd get this evaluated properly. If he qualifies to do the new waiver process in the U.S., then that would be great. If he has some other issue, it should be thoroughly explored with an experienced immigration lawyer to determine if you want to go ahead or wait some more.
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