Do not agree on intra-US penalties. Hiring someone from across the river shouldn't bring penalties. The objective is to keep jobs in the country, not necessarily in the township.
I do agree, however, that any tax incentives, not just labor related should be forfeit if it can be shown that hiring foreign has been done at the expense of local workforce. I'm not a big fan of the "deals" that are made in the government...as they always end up benefiting politicos more than their constituency. Most local and state tax codes need major overhaul anyway...alot of these issues are key drivers to outsourcing in the first place.
The H1B program should be as painful as possible. It should involve process costs far in excess of hiring local and retraining. There are lots and lots of people in the US that need only to be retrained. There should be also be no benefits forgiven for hiring H1B, they should be compensated on par with industry average, provided benefits equally.
In all, though, I think the largest issue is internal. We simply make it too easy to give up on our own. We don't fund training and educational programs sufficiently to bring our workforce up to the standard being set. We also don't spend enough time worrying about the disastrous effects of our urban school systems churning out folks without the basic skills needed to even pump gas.